The Bankruptcy Means Test: A Plain-English Guide
What Is the Means Test?
The means test is a financial eligibility screen added to the Bankruptcy Code in 2005. Its purpose: make sure people who can afford to repay at least some of their debts don’t get a free pass in Chapter 7.
Here’s the bottom line: if your income is low enough, you pass automatically. If your income is higher, you go through a calculation that weighs your income against your allowed expenses. If that calculation shows you have money left over each month, you may be required to file Chapter 13 instead — a three-to-five year repayment plan rather than an immediate discharge.
Most people pass the means test. Let’s walk through it.
Step 1: Do You Even Need to Take the Means Test?
You may be off the hook entirely. Skip the full means test if any of the following apply:
- Your income is below your state’s median for your household size. Check the current figures at justice.gov/ust/means-testing. For example, as of April 1, 2026, the median income for a California family of four is $139,071. If your income (from Schedule I) is below that number, you’re done — you pass.
- Your debts are primarily business debts, meaning more than 50% of what you owe was incurred running a business, not personal spending.
- You served in qualifying homeland defense activities (see Form 122A-Supp).
If either of the last two apply, fill out Form 122A-Supp and you’re exempt from the full calculation.
Step 2: Gather Your Forms
If you do need to complete the full means test, download these forms from the U.S. Bankruptcy Court website:
- Schedule I — your monthly income
- Schedule J — your monthly expenses
- Form B122A-1 — the means test income screen
- Form B122A-2 — the full means test calculation
Print them out and read the instructions before you start.
Step 3: Calculate Your Income (Schedule I)
Schedule I captures everything you bring in each month:
- Employment income (wages, salary — use your pay stub for gross income, deductions, and net pay)
- If you and your spouse are both filing, fill out both columns
- Other income: rental income, alimony, child support, government assistance
For irregular income, estimate your annual total and divide by 12.
Step 4: Calculate Your Expenses (Schedule J)
Schedule J covers your actual monthly living expenses — housing, food, transportation, utilities, insurance, childcare, and so on.
For expenses that don’t come monthly (medical bills, school supplies), add up what you typically spend in a year and divide by 12.
Step 5: The Means Test Calculation (Form B122A-2)
This is the detailed part. The form uses government-set “allowable” expense amounts rather than your actual spending in most categories — so follow it carefully.
Questions 6–7 (Food, Clothing, Health Care) These use IRS National Standards. Find them at justice.gov/ust/means-testing → paragraph 2 (National Standards). Enter the amount for your family size.
Questions 8–9 (Housing and Utilities) These use IRS Local Standards, which vary by location. On the same website, go to paragraph 4, select your state, and click “Go.” Enter the local standard for housing.
Note on question 9: Enter the local standard in box 9a. In box 9b, enter your actual mortgage payment from Schedule J. Subtract 9b from 9a and enter the result in 9c. If your mortgage payment exceeds the local standard, enter 0 in 9c.
Question 13 (Vehicle Expenses) Same process — use the Local Standards for transportation to get the allowed amount (box 13a), then calculate your net vehicle expense (box 13c).
Questions 14–23 Fill these in following the instructions on the form.
Box 24 Add up all IRS-allowed expenses from questions 6–23 and enter the total.
Questions 25–31 (Additional Deductions) If any of these apply to you, add them up and enter the total in box 32.
Questions 33–35
- Box 33: Complete and total all items (33a through 33e)
- Question 34: Past-due payments on secured debts (mortgage, car)
- Question 35: Past-due priority debts (taxes, student loans, support obligations)
Questions 38–39 (The Final Calculation)
- Line 38: Add the totals from lines 24, 32, and 37
- Line 39: Add the totals from lines 4, 32, and 37 — this is your Total Deductions
- Line 39a: Enter the amount from line 4 (your monthly income)
- Line 39b: Enter the amount from line 38
- Line 39c: Subtract 39b from 39a
- Line 39d: Multiply 39c by 60
Line 40 gives you your result. Follow the instructions to determine whether you pass.
What If You Don’t Pass?
Don’t give up yet. The means test includes a special circumstances provision that allows you to claim higher-than-average expenses if you have a legitimate reason. Common examples:
- Serious medical condition requiring ongoing treatment
- A child with special needs and related education expenses
- Other documented, unavoidable costs that exceed the standard allowances
If any of these apply to your situation, make sure you work through that section before concluding you’re ineligible for Chapter 7.
Bottom Line
The means test is tedious, but it’s manageable — especially if your income is near or below the median for your state. If you’re unsure where you fall, or if your situation is complicated, don’t guess. A single error can mean the difference between Chapter 7 and three to five years in a Chapter 13 plan.
Email me at martha@bankruptcysage.com for a free consultation. I’ll help you figure out exactly where you stand.