Close

What is the means test in bankruptcy?

The means test in bankruptcy is basically a mathematical formula that is used to determine whether or not you qualify for a Chapter 7 bankruptcy. What they do is, they take the average of your last six months of income and determine if you're below or above the median income for the household size in your state.

If you are over that median income, you don't automatically qualify for chapter seven. We would need to do what's called a long form where we take your income and subtract allowable expenses and determine whether or not there is negative or positive income at the end of that calculation. If the income is negative, then you can still qualify for a Chapter 7. If it's positive then you won't qualify. You would have to look at filing a Chapter 13 reorganization.