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- Section 707(b) supplies the legal framework
- Current monthly income is a defined lookback measure
- The second stage uses statutory deductions
- Official data are tied to the filing date
- A presumption can be rebutted by special circumstances
- Passing does not decide the whole Chapter 7 case
- Chapter 13 uses related forms for a different purpose
- The official forms create an auditable calculation
- Sources
Key Facts
- Federal level: The Chapter 7 bankruptcy means test implements the presumption-of-abuse rules in 11 U.S.C. § 707(b); it is not a general credit score or solvency test.
- Federal level: Official Form 122A-1 compares current monthly income with the applicable state and household-size median to determine whether the calculation continues.
- Federal level: Official Form 122A-2 applies statutory expense rules and calculates disposable income when the second stage is required.
- Federal level: Median-income and expense data are updated periodically, so the applicable dataset depends on the filing date.
- Federal level: Passing the means test does not itself guarantee Chapter 7 relief, and a presumption of abuse may be rebutted through the statutory special-circumstances process.
The bankruptcy means test is a federal screening calculation used primarily in consumer Chapter 7 cases. It asks whether a debtor’s income and allowed expenses create a presumption that granting Chapter 7 relief would be an abuse. The calculation uses defined terms and official data rather than a simple comparison of monthly bills with take-home pay.
The test is only one part of Chapter 7. Eligibility, complete disclosure, exemptions, prior cases, credit counseling, discharge objections, and other dismissal grounds remain separate.
Section 707(b) supplies the legal framework
Section 707(b) applies to a Chapter 7 case filed by an individual debtor whose debts are primarily consumer debts. It authorizes dismissal or, with consent, conversion when granting relief would be an abuse and provides the mechanical presumption commonly called the means test.
The statute also identifies situations in which the presumption does not arise, including specified disabled-veteran and military or homeland-defense circumstances. These are defined exceptions, not a broad exemption for every person with military service.
Current monthly income is a defined lookback measure
Current monthly income is defined in 11 U.S.C. § 101(10A). It generally uses the average monthly income received during the six full calendar months before the case begins, with statutory inclusions and exclusions. The definition can differ from current wages on the filing date and from taxable income.
Official Form 122A-1 gathers that income information and compares annualized current monthly income with the median for the applicable state and household size. When the form shows income below the applicable median, Form 122A-2 generally is not required. When it is above the median, the second calculation ordinarily follows unless an exclusion applies.
The second stage uses statutory deductions
Form 122A-2 starts from current monthly income and applies deductions recognized by § 707(b)(2). Some categories use National Standards or Local Standards derived from Internal Revenue Service collection data. Others depend on actual qualifying expenses or secured and priority debt calculations under the statute and form instructions.
This is why a personal budget and the means-test result can differ. The form may use standardized amounts for one category, actual amounts subject to legal limits for another, and no deduction for an expense that falls outside the statutory framework.
The final calculation compares monthly disposable income with statutory thresholds. Those dollar amounts are adjusted periodically under 11 U.S.C. § 104. A result using an old form or dataset can therefore be wrong even if the arithmetic is accurate.
Official data are tied to the filing date
The U.S. Trustee Program publishes median family income figures, National Standards, Local Standards, and related means-testing information. The effective-date table determines which dataset applies to a case filed on a particular date.
State and household size matter at the first stage. County or metropolitan-area information may matter for specified Local Standards. The use of geographically adjusted data does not turn the means test into state law; the test remains a federal Bankruptcy Code calculation.
A presumption can be rebutted by special circumstances
When the calculation creates a presumption of abuse, § 707(b)(2)(B) permits rebuttal by demonstrating special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative. The statute requires documentation, a detailed explanation, and a sworn statement, and the adjustment must be sufficient under the statutory calculation.
The statute gives serious medical condition and a call or order to active duty as examples, but the analysis remains tied to the evidence and statutory requirements. An example is not an automatic result.
Passing does not decide the whole Chapter 7 case
A case can avoid the means-test presumption and still face review under other provisions. Section 707(b)(3) directs the court, when the presumption does not arise or is rebutted, to consider bad faith and the totality of the debtor’s financial circumstances in determining abuse.
The means test also does not determine which property is exempt, whether a particular debt is dischargeable, or whether information in the schedules is complete. Those questions are governed by other Code provisions and case facts.
Chapter 13 uses related forms for a different purpose
Chapter 13 debtors use Official Forms 122C-1 and 122C-2 to address current monthly income, commitment period, and disposable income. The calculations share concepts and official datasets with Chapter 7, but they serve Chapter 13 plan requirements rather than the Chapter 7 presumption of abuse.
Calling every income calculation a “means test” can hide this distinction. Form 122A addresses Chapter 7; Form 122C addresses Chapter 13. The governing chapter and exact official form matter.
The official forms create an auditable calculation
The form sequence separates income, exclusions, household information, standardized deductions, actual qualifying expenses, secured-debt payments, priority claims, and the final statutory comparison. Supporting records allow reported entries to be checked against the defined measurement period and form instructions.
A broader explanation of Chapter 7 bankruptcy can place the calculation within the petition, trustee administration, exemptions, and discharge process. The means test is important, but it is not the entire case.
