Means Test: How To Arrive At The Magic Number?

  • Means Test: How To Arrive At The Magic Number?

Means Test: How To Arrive At The Magic Number?

Call: 888-297-6203

A means test is a critical aspect of qualifying for Chapter 7 and there can be a lot of confusion and indecision made in the calculation. Many people think they qualify for the means test but end up disqualified while the others who can qualify for the means test might think they have not. It is often a misconception that the recent income will be considered for the calculation of net household income, however, it is not the case. The average income over a period of the last 6-8 months is considered the household income to begin with.

Similarly, when it comes to expenses, the minimalistic expenses which are necessary for survival are only allowed for. It is not very easy to understand the impact of unemployment and fluctuating expenses over the period of 6-8 months as the calculation impacts significantly on the net household income. As per stats hardly over 12% of bankruptcy filers managed to pass the means test. That truly means, there is a need for more awareness and knowledge before filing for bankruptcy. Log on to to brush up on your knowledge on the means test income and expense items.


It is important to collect as many documents and proofs for any income sources as well as qualified expenses. Both the aspects of a means test, income, and expenses need to be honestly provided from the past 6-8 months with honest and accurate documentation. After considering all the aspects, and documentation your bankruptcy attorney can match your disposable income with the state median and provide for whether you may qualify for Chapter 7 bankruptcy.

Means test impact

If you are finally able to qualify the means test after all the calculations, it’s a step ahead of the Chapter 7 bankruptcy. However, not qualifying for the means test is not the end of the road. There are two options to consider if you do not qualify for the means test:

  • The first is to hold off filing for bankruptcy for a few days or months if you had higher income in the early months (6-8 months back) and the income has taken a severe dip in recent times. If waiting for a month or so helps in severe dips in the household income, it is worth waiting for a month or so whatever suits your personal situation.
  • The second alternative is to file bankruptcy via Chapter 13. Chapter 13 bankruptcies are also beneficial depending on the circumstances. They create less damage to the credit score and a filer can restore most of his/her assets. So, it is not a bad option for sure.

There are many critical aspects and calculations going through this process. With the mental trauma and stress of debts, these might not be something a filer would like to do by themself. Fortunately in Los Angeles and Dallas, TX, you can just dial 888-297-6203 and get the best-personalized solution for your situation.