How Do You Pass the Bankruptcy Means Test?

The means test is used to determine whether you qualify to file a chapter 7 bankruptcy. This policy ensures that people do not abuse filing a chapter 7 bankruptcy. It also ensures that only those who do not have enough income to pay their creditors can file chapter 7. The calculation used for determining whether your income is below median income is called the means test. To qualify for a chapter 7 bankruptcy your income cannot exceed the median income for your household size. 

This is done by looking at your earned gross income for the past 6 months. All sources of income are calculated, this can include wages, child support, business income, etc. Certain sources of income are excluded from the means test. Social security and veteran’s disability benefits are not included in the calculation. 

Each state has its own set median income about based on household size. As of April 2025, in Minnesota, for a household of 1 the amount is $74,083, a household of two $94,966, a household of three $123,343, and a household of 4 $144,953. If your household size is any larger than 4, you will add $11,100 for each additional person.

If your income falls below the income amounts for your state, you will qualify for a chapter 7 bankruptcy. If your income is above median income, you will have to file a chapter 13 bankruptcy. There are calculators and resources online for doing the means test. However, these are often misleading and inaccurate. In addition, median income often changes, so you may find inaccurate numbers. It is best to speak with a bankruptcy attorney to determine if you pass the means test. They will guide you through the process and advise you of your options. 

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If you are dealing with an overwhelming debt problem, it is important to discuss your options with a bankruptcy attorney. If you have questions about bankruptcy and would like to do a free consultation to go over your options, visit www.lifebacklaw.com to speak with an attorney. You will be glad you did!