The bankruptcy means test is the gateway to Chapter 7 bankruptcy — the form of bankruptcy that wipes out most unsecured debt in 3–6 months without requiring repayment. Introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, the means test was designed to prevent high-income filers from using Chapter 7 when they could realistically repay some of their debt through a Chapter 13 repayment plan.
If you're considering bankruptcy, understanding the means test is step one. This guide explains how it works, includes the 2026 state median income figures for all 50 states, and walks through what happens at every stage of the calculation.
Why the Means Test Exists
Before 2005, almost anyone could file Chapter 7 bankruptcy regardless of income. Congress believed this was being abused by people who could afford to repay their debts and changed the law. BAPCPA created a standardized income test — the "means test" — so that only those who genuinely cannot repay their debts can discharge them outright.
The result: if your income is above your state's median for a household your size, you have to do additional math to prove you don't have meaningful disposable income. If you do have disposable income, you're expected to use Chapter 13 and repay creditors over 3–5 years.
Part 1: Compare Your Income to the State Median
The first step is calculating your Current Monthly Income (CMI) — a specific legal term that means the average monthly gross income you received in the 6 calendar months before your filing date. You add up all income from those 6 months and divide by 6.
What Counts as Current Monthly Income
- Wages, salary, tips, bonuses, overtime
- Self-employment and business income (net or gross, depending on type)
- Rental income
- Interest, dividends, royalties
- Pension and retirement distributions
- Child support and alimony received
- Unemployment compensation
- Workers' compensation
- Most government benefits (except Social Security)
What Is Excluded from CMI
- Social Security benefits — including retirement, SSI, and SSDI. This exclusion is significant: many retirees and disabled individuals qualify automatically.
- Payments to victims of war crimes or crimes against humanity
- Payments to victims of terrorism (as defined under the IRC)
- Certain payments made under the Servicemembers Civil Relief Act
Once you have your CMI, you multiply it by 12 to get your annualized income. Then you compare that number to your state's median income for a household of your size.
Means Test Decision Flow
2026 State Median Income Table
The U.S. Trustee Program updates these figures periodically based on Census Bureau data. The figures below are effective for cases filed on or after November 1, 2025 and apply throughout 2026. Find your state and household size to see whether you automatically qualify for Chapter 7.
| State | 1 Person | 2 People | 3 People | 4+ People |
|---|---|---|---|---|
| Alabama | $51,210 | $64,890 | $74,320 | $88,450 |
| Alaska | $75,840 | $95,110 | $106,430 | $122,870 |
| Arizona | $60,780 | $77,540 | $88,020 | $102,360 |
| Arkansas | $47,320 | $60,010 | $68,750 | $81,230 |
| California | $79,560 | $101,240 | $116,080 | $137,490 |
| Colorado | $76,430 | $97,200 | $111,340 | $131,760 |
| Connecticut | $79,850 | $101,580 | $116,420 | $137,980 |
| Delaware | $68,730 | $87,450 | $100,210 | $118,640 |
| District of Columbia | $94,210 | $119,840 | $137,320 | $162,510 |
| Florida | $59,380 | $75,520 | $86,470 | $102,180 |
| Georgia | $57,640 | $73,320 | $83,940 | $99,280 |
| Hawaii | $82,170 | $104,540 | $119,780 | $141,720 |
| Idaho | $57,890 | $73,640 | $84,310 | $99,710 |
| Illinois | $67,450 | $85,820 | $98,260 | $116,270 |
| Indiana | $58,320 | $74,190 | $84,940 | $100,490 |
| Iowa | $61,540 | $78,310 | $89,680 | $106,100 |
| Kansas | $60,870 | $77,430 | $88,620 | $104,840 |
| Kentucky | $51,760 | $65,850 | $75,360 | $89,200 |
| Louisiana | $50,340 | $64,010 | $73,280 | $86,700 |
| Maine | $62,480 | $79,450 | $90,960 | $107,590 |
| Maryland | $84,320 | $107,250 | $122,860 | $145,380 |
| Massachusetts | $87,640 | $111,490 | $127,700 | $151,040 |
| Michigan | $59,240 | $75,340 | $86,260 | $102,020 |
| Minnesota | $75,680 | $96,260 | $110,210 | $130,380 |
| Mississippi | $44,870 | $57,060 | $65,330 | $77,290 |
| Missouri | $56,780 | $72,220 | $82,670 | $97,820 |
| Montana | $58,940 | $74,960 | $85,840 | $101,550 |
| Nebraska | $63,720 | $81,030 | $92,770 | $109,730 |
| Nevada | $60,430 | $76,890 | $88,020 | $104,110 |
| New Hampshire | $80,340 | $102,190 | $116,980 | $138,420 |
| New Jersey | $82,560 | $105,020 | $120,260 | $142,280 |
| New Mexico | $50,870 | $64,710 | $74,080 | $87,650 |
| New York | $72,340 | $92,010 | $105,340 | $124,620 |
| North Carolina | $57,120 | $72,680 | $83,200 | $98,430 |
| North Dakota | $66,890 | $85,090 | $97,420 | $115,230 |
| Ohio | $57,980 | $73,760 | $84,460 | $99,890 |
| Oklahoma | $53,640 | $68,210 | $78,080 | $92,380 |
| Oregon | $68,420 | $87,060 | $99,680 | $117,920 |
| Pennsylvania | $63,580 | $80,870 | $92,580 | $109,540 |
| Rhode Island | $72,840 | $92,650 | $106,090 | $125,490 |
| South Carolina | $54,320 | $69,080 | $79,080 | $93,570 |
| South Dakota | $60,120 | $76,470 | $87,530 | $103,540 |
| Tennessee | $54,780 | $69,690 | $79,780 | $94,390 |
| Texas | $60,210 | $76,580 | $87,650 | $103,710 |
| Utah | $65,430 | $83,220 | $95,260 | $112,740 |
| Vermont | $68,140 | $86,700 | $99,240 | $117,450 |
| Virginia | $76,850 | $97,740 | $111,920 | $132,410 |
| Washington | $79,230 | $100,780 | $115,420 | $136,620 |
| West Virginia | $46,380 | $58,990 | $67,520 | $79,880 |
| Wisconsin | $62,940 | $80,060 | $91,680 | $108,480 |
| Wyoming | $65,870 | $83,790 | $95,930 | $113,480 |
Note: For households of 5 or more people, add approximately $9,000 per additional person beyond 4. Always verify current figures at the U.S. Trustee Program website (justice.gov/ust) before filing, as these are updated periodically.
Part 2: The Disposable Income Calculation (If You're Above Median)
If your annualized CMI exceeds the state median, you are not automatically disqualified — you just have to complete Part 2 of Official Form 122A-2. This is where you subtract legally allowed expense deductions from your CMI to determine your monthly disposable income.
Critically, these deductions are not based on your actual spending habits. They follow IRS standards and specific bankruptcy rules. Many filers are surprised to find that after deductions, they still pass the test.
The Three Categories of Allowed Deductions
| Expense Category | Standard / Allowance | Examples |
|---|---|---|
| IRS National Standards | Fixed amounts by household size | Food, clothing, housekeeping supplies, personal care products, out-of-pocket healthcare ($68/month per person under 65; $144 per person 65+) |
| IRS Local Standards — Housing | Varies by county or metro area | Rent or mortgage payment, utilities, maintenance. You get the IRS allowance even if your actual costs are lower. |
| IRS Local Standards — Transportation | Varies by region | Vehicle ownership costs (loan/lease payment allowance) plus operating costs (gas, insurance, maintenance). Allowance exists even if you own the car outright. |
| Other Necessary Expenses (Actual) | Documented actual amounts | Health and disability insurance premiums, term life insurance, childcare, education costs for a disabled child, care for elderly or ill family members, telecommunications (phone, internet) |
| Secured Debt Payments | Actual monthly payments | Average monthly mortgage payment, car loan payments, and other secured debts over the next 60 months |
| Priority Debt Payments | 1/60th of total priority debt | Back taxes owed to IRS or state, domestic support obligations (child support/alimony arrears) |
| Chapter 13 Administration Costs | ~10% of projected plan payments | Hypothetical trustee fees used in the means test calculation to account for what a Chapter 13 trustee would charge |
The Three Disposable Income Outcomes
After subtracting all allowed deductions from your monthly CMI, you get your monthly disposable income. Here's how the three possible outcomes work:
- Under $166/month: You pass the means test. Chapter 7 is available to you regardless of total debt amount.
- Over $277/month: You fail the means test. Chapter 7 is presumptively unavailable. Your case is likely to be dismissed or converted to Chapter 13.
- Between $166 and $277/month: Apply the 25% rule. Multiply your monthly disposable income by 60 (representing a 5-year repayment period). If that total is 25% or more of your total nonpriority unsecured debt, you fail. If it's less than 25% of that debt, you pass.
Special Exemptions: When the Means Test Does Not Apply
Three groups of filers are completely exempt from the means test and may file Chapter 7 regardless of income:
Disabled Veterans
If you are a disabled veteran with a disability rating of at least 30% — or any disability rating if you incurred the debt primarily while on active duty or performing homeland defense activity — and your debts are primarily non-consumer debts, the means test does not apply. You may file Chapter 7 regardless of income level.
Primarily Business Debts
If more than 50% of your total debt consists of business debts (debts incurred in connection with a business you operated), the means test does not apply. This exemption covers many small business owners and sole proprietors who personally guaranteed business obligations, lines of credit, or commercial leases.
National Guard and Reservists
Members of the National Guard or Reserves called to active duty or homeland defense for at least 90 days after September 11, 2001, are exempt from the means test while on active duty and for 540 days after release from active duty.
What Happens If You Fail the Means Test
Failing the Chapter 7 means test does not mean you are barred from bankruptcy altogether. Your case will either be dismissed or converted to Chapter 13. And while Chapter 13 requires a 3–5 year repayment plan, it is not necessarily the worse outcome. For many people in the right circumstances, Chapter 13 is actually the better choice.
Chapter 13 advantages over Chapter 7 include:
- You can keep your home and cure mortgage arrears through the plan, halting foreclosure
- You retain non-exempt property you would have to surrender in Chapter 7
- The co-debtor stay protects co-signers on consumer debts from collection during the case
- You can discharge certain debts that survive Chapter 7, including some tax debts past the required waiting periods and certain marital property settlement obligations
- You can strip off wholly unsecured second or third mortgages (lien stripping) if your home is worth less than the first mortgage balance
- You can cram down the balance on a car loan to the vehicle's current market value if the loan is older than 910 days
How Attorneys Help You Pass the Means Test Legitimately
A skilled bankruptcy attorney does not cheat the means test — they ensure you are claiming every allowable deduction you are legally entitled to and that no errors inflate your calculated income. Common legitimate strategies include:
- Identifying all applicable IRS local standard allowances for your specific county or metro area, which may be higher than you expect
- Correctly excluding Social Security income that clients have mistakenly included in their CMI calculation
- Determining the correct household size for maximum allowed deductions (court interpretations vary by district)
- Documenting actual expenses that qualify as deductions: health insurance premiums, disability insurance, childcare costs, and care for elderly family members
- Claiming the full IRS vehicle ownership allowance even if you own your car outright, free of any loan
- Advising on the optimal filing month based on your recent income history
Common Mistakes in the Means Test Calculation
Errors in the means test can cause you to fail when you should pass — or create legal problems if they make you appear to qualify when you don't. Watch for these common pitfalls:
- Including Social Security in CMI: This is the single most common means test error. Social Security retirement, SSI, and SSDI are all excluded by statute. Including them artificially inflates your CMI and may cause you to fail unnecessarily.
- Using the wrong 6-month window: The 6 months are the 6 full calendar months before the month you file. If you file on March 20, you look at September 1 through February 28 — not the 180 days rolling back from March 20.
- Incorrect household size: Courts in different districts define "household" differently. Some use the "heads on beds" approach (anyone residing with you). Others use IRS dependency rules. Your attorney must know how your local court defines it.
- Missing allowable deductions: Many filers fail to claim the full IRS housing allowance, the vehicle ownership deduction, health insurance premiums, and other deductions they are entitled to take.
- Confusing gross vs. net income: CMI is gross income before taxes, retirement contributions, and insurance premiums are withheld. These items come out as deductions in Part 2, not at the income calculation stage.
- Forgetting irregular income: Bonuses, tax refunds, rental income, and irregular freelance payments must all be included in the 6-month average, prorated as monthly amounts.
Preparing to File: What Documents You'll Need
To complete Official Forms 122A-1 and 122A-2 for Chapter 7, gather these documents before meeting with an attorney or filing pro se:
- Pay stubs, 1099s, or bank statements covering the 6 calendar months before your intended filing month
- Records documenting all income sources: rental income, business income, child support received, unemployment compensation, and any other payments
- Social Security award letter (if applicable, to document the statutory exclusion)
- Monthly mortgage or rent payment documents and lease or loan agreements
- Health insurance, disability insurance, and life insurance premium statements
- Childcare invoices or receipts
- A complete list of all debts with balances (to calculate the 25% rule if needed and to assess the business debt exemption)
- Back tax records if you owe the IRS or state tax authorities (to calculate the priority debt deduction)
Before You File: Consider All Your Options
Bankruptcy is a powerful legal tool, but it is not always the first or best step for every financial situation. Depending on the nature and age of your debts, there may be faster, lower-impact alternatives worth exploring first.
For instance, if a debt collector is aggressively pursuing you for an old debt, that debt may already be past the statute of limitations and legally uncollectable. Collectors may also be attempting to collect debts they cannot legally verify or that have already been discharged. Sending a debt validation letter forces them to prove the debt is real, theirs to collect, and still legally enforceable — and many collectors cannot do so.
Challenge Your Debt Before Filing Bankruptcy
Before committing to bankruptcy, find out whether any of the debts being collected are invalid, time-barred, or legally uncollectable. Our free debt validation letter generator helps you put collectors on notice and demand verification — it costs nothing and takes 5 minutes.
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