How Do I Pass the Chapter 7 Means Test?

What is the means test?

I decided that if I’m going to start helping people prepare and file a bankruptcy, I’d better see if I could figure out how to fill out the required forms and calculate the means test. I’m sure glad I did. It would be really embarrassing if I couldn’t figure it out. Well, it took me three tries, but I finally did it. Here’s some basic guidance.

First, if you don’t know what I’m talking about, the means test is something devised by an evil demon in an attempt to stop people from “abusing” the bankruptcy process. The idea is to stop people who have some disposable income available to pay something (even a little bit) to their creditors from discharging all their debts in a chapter 7 bankruptcy.

Once you take the means test, if it shows you have disposable income (more than is needed to pay your living expenses), you will have to file a chapter 13 (instead of a chapter 7). In a chapter 13, you must propose a plan to use that excess income to pay a portion of what you owe over 3 to 5 years. It’s a difficult process, to say the least, and the subject of a future post.

Step-by-step guide to means test

But back to the subject at hand. The means test. I’ll make it as simple as I can but you’ll have to spend some time plugging in your own information. First, you need to determine if your income exceeds your state’s median income. If it doesn’t, you do not need to complete the means test calculation. You’ll find your applicable income information at Go to the box that says “Data Required” for bankruptcy forms. Click on the “select options” button and select the top item (current date) and hit “go.” Under Section I – Census Bureau Data, click on “Median Family Income” and find the information for your state and family size. For example, for a family of four in California, the average median income is $134,146. If the income you list on your Schedule I (you’ll need to fill this form out as part of any bankruptcy filing) is less than the applicable listed income, you do not need to complete the means test. That’s good news for you.

You are also exempt from the means test if your debts are not primarily consumer (personal) debts. This exemption means that more than 50% of of your obligations were incurred in running a business. You are also exempt if you are or were engaged in “homeland defense” as set forth in Form 122A-Supp. If either applies, fill out Form 122A-Supp.

If you do need to take the means test, go to the Bankruptcy Court website ( and open the Forms section. Download and print out Schedule I (your income), Schedule J (your expenses), and forms B122A-1 and B122A-2. Together, these forms are the “means test.” Open the Instructions. The instructions for the means test start on page 33.

Start with Schedule I (your income). Read the instructions on the form and fill it out. If you and your spouse are both filing bankruptcy, fill out both columns. Part 1 sets out the information regarding your employment; Part 2 sets out your gross income, deductions, and net income (you should find this information on your pay stub). Once your entered your employment income, then list any other sources of income such as rental income, alimony or child support, and government assistance.

When you are done with income, fill out your monthly expenses on Schedule J. For periodic expenses, such as medical and dental, or school supplies for your kids, figure out how much you spend in a year, then divide the number by 12 and enter that for your monthly expense.

Means test calculation

Now comes the hard part – the means test itself (Form 122A-2). Follow the instructions very carefully. Except for your actual mortgage payment (if any), this form uses a national average for your expenses in questions 6-7 and a local standard amount for questions 8-9. You’ll note that the form doesn’t tell you where to find this information so here is the website: For questions 6-7, click on “National Standards” in paragraph 2 and find the information for “food, clothing and other items” and fill in the number for your family size. Do the same thing in paragraph 3 for health care expenses (note that there different sections on the form depending on your age).

For questions 8-9 on the Form, click on the box in paragraph 4, then click on your state and hit “go.” Fill in the applicable information for questions 8-9 on the Form. Note that you’ll take the information off the website and fill in the box for question 9a. For box 9b, use the mortgage (secured creditor) amount from Schedule J, then subtract it from the number in box 9a and enter the number in 9c (if 9b is less than 9a, enter 0). Continue filling out the form.

For question 13 (your car(s)), follow the same procedure to get the Local Standard costs (box 13(a)) and the net vehicle expense (box 13(c)). Proceed to the end of the form by filling in the answers for questions 14-23.

Total all of your IRS allowed expenses in questions 6-23 and enter that number in box 24. If you have any of the deductions allowed in questions 25-31, add them up and enter the number in box 32. Complete question 33 and enter the total in box 33e. Read and answer question 34 (this amount is the total of your past due payment on secured obligations such as your home or car). Next (question 35) is the amount of any past due payments on priority claims such as alimony or child support.

Ignore question 36 for the moment and go to number 38 and enter the totals from questions 24, 32 and 37. Next, go to question 39 and fill in the totals from lines 4, 32 and 37. Add those numbers and enter the total in the Total Deductions box. In Part 3, enter the amount on line 4 on line 39a, and the amount in line 38 on line 39b. Subtract line 39b from line 39a and enter it on line 39c. Multiply that amount times 60 and enter the amount on 39d. Answer the questions listed on line 40 to determine whether you have passed the “means test.”

I said I wasn’t going to walk you through filling out the forms, but that’s pretty much what I just did. If you follow the steps and find that I’ve missed something, please leave me a comment.

What’s next?

If you passed the means test, you can complete and file your chapter 7 case. What happens if you did not pass it will be covered in another blog post.

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