Understanding the Bankruptcy Means Test

What Is the Means Test?

The means test (Official Form 122A) was introduced by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Its purpose: prevent high-income filers from using Chapter 7 liquidation when they could reasonably repay debts through Chapter 13.

Step 1: Below-Median Income, Automatic Pass

If your current monthly income (averaged over the past 6 months) is below the median income for your state and household size, you automatically pass the means test and may file Chapter 7. The U.S. Trustee Program publishes current state median income figures by household size.

Step 2: Above-Median, The Expense Calculation

If your income exceeds the state median, you must complete Part 2, subtracting allowed expenses from income to calculate "monthly disposable income." Allowed expenses follow IRS National and Local Standards (set amounts for housing, transportation, food, etc.) rather than your actual spending.

Step 3: The Disposable Income Test

If your remaining monthly disposable income multiplied by 60 (5 years) exceeds $15,150, or if it equals 25% or more of your nonpriority unsecured debt (and at least $9,075), the presumption of abuse arises. These are the current thresholds for cases filed April 1, 2025 through March 31, 2028; they adjust automatically every three years under 11 U.S.C. § 707(b)(2)(A)(i), so verify the current figures on the U.S. Trustee Program means-testing site before relying on them. This creates a strong pressure toward Chapter 13 instead.

What the Data Shows About Means Test Impact

Since BAPCPA's passage, researchers have documented a significant reduction in overall bankruptcy filings. Some economists estimate the means test discouraged 200,000–400,000 filings per year by making the process more complex and expensive, rather than actually routing high-income filers to Chapter 13. Many filers who formerly used Chapter 7 now don't file at all.

Special Exemptions

Disabled veterans whose debt arose primarily while on active duty or performing homeland defense activities are exempt from the means test. Businesses and non-individual debtors are also exempt.

Attorney Fees and the Means Test

One documented effect: the means test substantially increased attorney fees for Chapter 7 cases, since attorneys must now carefully review means test calculations for every client. Average attorney fees for Chapter 7 rose from roughly $700 pre-BAPCPA to $1,200–$1,800+ post-BAPCPA.

Practical Implications

The means test is mechanical, it follows a formula. But the inputs matter enormously: which deductions you claim, how you document expenses, and which income period the court examines. Legitimate expense deductions (mortgage, car payments, child support, taxes, medical costs) can reduce disposable income below the threshold. This is why bankruptcy attorneys are essential, the means test rewards precise documentation.

The geographic dimension also matters. Because the means test uses state-specific median income thresholds, the same household income that passes the means test in an expensive state like California may fail in a lower-cost state like Mississippi. Explore how filing patterns vary across districts on our state pages - the Chapter 7 vs. Chapter 13 ratio often reflects the means test's differential impact by region.

If you fail the means test and are directed toward Chapter 13, it is not necessarily a worse outcome. Chapter 13 protects your home from foreclosure, lets you catch up on secured debts, and still results in discharge of unsecured debts after completing the repayment plan. The choice between chapters involves trade-offs that a bankruptcy attorney can help you evaluate.

Key Takeaways

The means test is a mechanical gate, not a judgment. It determines which chapter of bankruptcy you can access based on income and expenses. Most individual filers pass the means test for Chapter 7, nationally, Chapter 7 accounts for roughly 60% of all consumer filings, indicating that the majority of filers meet the income threshold.

The means test does not determine whether bankruptcy is appropriate for your situation. That decision involves your total debt burden, asset exposure, income trajectory, and personal goals. The means test only tells you which doors are open. For a broader comparison of what each chapter offers, see our Chapter 7 vs. Chapter 13 guide.

Frequently asked questions

Where does this data come from?

Filing counts on this page come from the Administrative Office of the U.S. Courts (AOUSC) Judicial Caseload Statistics. Per-capita rates use Census Bureau population estimates. This portal does not publish BLS, HHS, or Department of Labor series as filing figures.

How often are figures updated?

Each series follows its own publication cadence. We refresh our database within 30 days of each upstream release. Specific update timestamps appear in the page footer where available; the methodology page documents the cadence per data series.

Can I use this data for my own analysis?

Yes. The underlying federal data is public domain. Our presentation, calculations, and editorial commentary are licensed for individual reference. For commercial republication or large-scale data extraction, contact us at the email listed on the contact page.

What if the figures here disagree with another source?

Different sources use different methodologies, definitions, geographic boundaries, and reference periods, disagreement is normal and informative. Our methodology page documents exactly which series and reference period we use for each metric, so you can reproduce or audit the figures against the upstream agency directly.

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