Chapter 7 Bankruptcy Means Test Information

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One of the most popular types of individual bankruptcy is Chapter 7 bankruptcy. This is not really a surprise, considering that a Chapter 7 bankruptcy ends with the cancellation of all your unsecured debts. However, to prevent outright abuse of the system, Congress implemented the “income test,” sometimes referred to as the means test. This means test was introduced when the bankruptcy law was amended in 2005.

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What is the means test?

When you begin the process of filing for bankruptcy, you will need to complete Bankruptcy Form 122. This form will take into account your income and determine whether or not you are eligible to file for Chapter 7 bankruptcy. income cap for chapter 7, you may qualify. Otherwise, there is a second part of the resource test.

In the means test, the size of your household matters. You can only earn a certain amount of money above the poverty line to be eligible for Chapter 7 bankruptcy, but that number increases with each dependent you have living in your home. So even if other members of your household are not filing for bankruptcy, it is best to include their income in the bankruptcy filing details. A bankruptcy attorney can help you ensure that you do not miscalculate the size of your household.

When calculating the means test for your Chapter 7 bankruptcy, you should note that the result of this calculation will compare your average household income to that of your state. The exact median household income used in the comparison is determined by Census Bureau data.

Where can I get the forms I need for a Chapter 7 resource test?

Need a copy of the resource test? Download a copy of the means test by going to the United States court website. It is easy to access and you can download, print or complete it electronically. You should also be able to get it from your local courthouse. However you access the document, be sure to fill it out completely before submitting it. It is also important to be completely transparent when submitting these documents. If it is determined that you lied or withheld information from the court, you risk having your case thrown out, or worse, fines and jail time. Being fully transparent gives you a better chance of completing your Chapter 7 bankruptcy process.

What is means-tested income?

Your main form of income is an obvious amount that you will need to enter for the means test. The test takes your gross revenue (income before taxes). In addition, Social Security retirement and disability income is often cannot be considered income. The form will ask you to determine your income for the 6 months preceding the Georgia Bankruptcy"}” data-sheets-userformat=”{"2":513,"3":{"1":0},"12":0}”>Georgia Bankruptcy filing. To best estimate your monthly income, the form recommends that you add the income you have made in the last 6 months and then divide it by 6. This will give you the most accurate average monthly income. Income must include your salary or wages, plus any tips, bonuses, overtime, and commissions you paid in addition to your salary. Be sure to include these extras as best you can.

You will also need to provide information about your spouse’s income, even if they are not declaring bankruptcy. The same information listed above will also be required for their earnings.

Here is an exhaustive list of the forms of income that must be declared during your means test:

  • Over time
  • Wages
  • Salaries
  • Bonuses
  • Annuity payments
  • Fees
  • 1099 Income
  • Dividends, royalties and interest
  • retirement income
  • pensions
  • Unemployment benefits
  • alimony
  • Pension
  • Your net operating income
  • Workers’ compensation benefits

Although you must report your Social Security income, it is fortunately not taken into account when determining eligibility for Chapter 7 bankruptcy.

It is important to keep in mind that passing the means test does not guarantee you a Chapter 7 bankruptcy approval. The courts will also consider the amount of your disposable income versus your expenses. If you have substantial disposable income (income not needed for monthly living expenses and minimum debt payments), and little debt or expenses, they may reject your case, forcing you to choose Chapter 13 Bankruptcy in place.

What happens if I don’t pass the resource test?

You can often take a bankruptcy means test calculator to help estimate Chapter 7 bankruptcy qualification. If you have not passed the Chapter 7 bankruptcy means test, then you will need to submit another form that assesses your disposable income. You can calculate your disposable income by deducting certain expenses from your monthly income. Your bankruptcy petition may be denied if your disposable income is above a certain amount. But if it is less than an amount specified by the bankruptcy court, you may still be eligible for certain bankruptcies.

Here are the expenses you can deduct when calculating your disposable income:

Deductible expenses

  • Childcare costs
  • Taxes on your income
  • Contributions made to charitable causes
  • Premiums paid for disability and sickness insurance
  • Mandatory levies, e.g. union dues, pension contributions, etc.

You may also be allowed to deduct certain normal expenses. However, when deducting living expenses, you will need to provide proof of the amount you are claiming.

Living expenses you can deduct include:

  • Money spent on clothes
  • Spending on housekeeping supplies
  • food cost
  • Transport
  • Out-of-pocket healthcare costs

With these deductions, you may be approved for Chapter 7 bankruptcy, depending on the stipulations of your local government. Again, be sure to be honest in your assessment of your expenses. Exaggerating your expenses can lead to further investigation into your case, which could result in dismissal, fines, or even jail time. You will be expected to be able to produce proof of the expenses you claim, so do not claim anything you have no way of proving.

What if I pass the resource test?

If you pass the means test, it’s likely (but not guaranteed) that you’ll be eligible to file for Chapter 7 bankruptcy. Once you’ve been approved, you’ll begin working with an attorney and a bankruptcy trustee. The trustee will begin liquidating your assets to pay off your existing debt. Once the assets eligible for liquidation have been sold, your creditors will be repaid to the fullest extent possible. Once this is complete, your remaining debt (often includes outstanding lawsuits for debt collection) will be paid and your file will be closed. While this is an incredibly brief overview of what the Chapter 7 bankruptcy process looks like, it does give you a good idea of ​​what to expect once you pass the exam. resources.


While bankruptcy can be daunting, it can also be one of the best tools to get you back on track and debt-free, setting you up for a better financial future. One of the first steps in Chapter 7 bankruptcy is the means test. Make sure the form you submit is complete and honest.

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