This page was written, edited, reviewed & approved by Emil J. Fleysher following our comprehensive editorial guidelines. Emil J. Fleysher, the Founding Partner, has 15+ years of legal experience as a bankruptcy attorney. Our last modified date shows when this page was last reviewed.
Filing for Chapter 7 bankruptcy can offer real help when you're drowning in debt. But not everyone qualifies. The Chapter 7 Means Test is the first step to see if you meet the income limits.
Fleysher Law Bankruptcy and Debt Attorneys helps people understand if they qualify for liquidation bankruptcy under federal bankruptcy law. We guide you through the bankruptcy process, explain the means test, and review your full financial situation. Our team works with clients across Florida to help them get real bankruptcy relief.
Chapter 7 bankruptcy is a type of bankruptcy that helps people erase eligible debts through a court process. It’s also called liquidation bankruptcy because some property may be sold to pay creditors.
It helps people with limited income get a fresh start. Most consumer debts like credit cards, personal loans, and medical bills can be wiped out. Some debts, like tax debts or student loans, may be Non-Dischargeable Debts.
To qualify, you must meet the income guidelines or pass the means test. You must also follow the rules in the bankruptcy code and complete the required forms. The process includes filing a bankruptcy petition, attending the meeting of creditors, and waiting for your bankruptcy discharge.
In liquidation bankruptcy, the court appoints a bankruptcy trustee to review your case. If you own nonexempt property, it may be sold to pay creditors. However, most people keep what they own. Florida offers strong bankruptcy exemptions that protect your home, car, and other basics.
You must list all types of debts, income, and assets on your bankruptcy form. You’ll also show your monthly income, monthly expenses, and property. After your case is reviewed, the court may erase your debt and close the case. It’s a quick process compared to other bankruptcy chapters.
People with low or no disposable income often choose Chapter 7. This includes:
It's also common for business debtors to file if their company is shutting down.
Filing gives you Protection from Creditors, stops lawsuits, and ends collection efforts. You also get a chance to rebuild your finances faster.
| Benefits | Drawbacks |
|---|---|
| Quick debt relief | May lose nonexempt property |
| Stops foreclosure and lawsuits | Stays on credit reports for 10 years |
| No monthly payments | Not all debts are discharged |
| No long-term payment plan | Cannot file again for 8 years |
| Covers many consumer debts | May not help with secured debt |
The Chapter 7 Means Test decides if you qualify for bankruptcy under Chapter 7 based on income and expenses. The test compares your household income to the state median. If you're below it, you likely qualify. If you're above it, the test checks your disposable income after subtracting allowable expenses.
This test applies to most individual debtors filing for personal bankruptcy. It's designed to prevent abuse of chapter rules by people who can afford to repay. You must submit detailed info about your income over the past six calendar months, along with your living expenses, household expenses, and debt payment obligations.
If you pass, your case can move forward. If not, you may need to consider another debt relief option.
The means test exists to stop people from misusing Chapter 7 instead of repaying debts under Chapter 13. It's about fairness. The test looks at your monthly income and compares it to the median income in Florida for similar household sizes.
If your income is too high, you must show that actual expenses and secured debt payments leave you with little to no disposable income. If you still have too much left over, the court may assume the presumption of abuse. This means you don't qualify for liquidation bankruptcy and must look at other solutions.
Most people filing for Chapter 7 must take the means test. There are exceptions:
If you earn more than the income threshold, the full test is required. You must also submit detailed records and credit reports.
A qualified bankruptcy attorney can confirm whether you must take the test based on your income level and family size.
First, the court looks at how your income compares to the median income in Florida. This depends on how many people are in your household.
Florida sets the income requirement by household size. The larger your family size, the higher your allowed income.
As of the most recent numbers:
These numbers change often, so always check the latest updates. If your average income is lower, you likely pass the test.
The test includes almost all sources of income:
It looks at the past six calendar months, not just your recent paychecks. You'll need proof of all income sources. Your bankruptcy lawyer will help gather the correct paperwork and fill out the right forms.
If your household income is below the median income, you automatically pass the means test. You can move forward with your Chapter 7 bankruptcy filing. You still need to file the full set of forms and go through the regular bankruptcy process. But the court won't challenge your eligibility.
Even if you qualify, it’s smart to review other debt-relief options first. A knowledgeable bankruptcy attorney can help explain your choices.
If your income is above the median income, you must move to the second part of the test. This step looks at your actual expenses and debt payments.
You subtract allowable expenses like:
These are based on IRS standards. Some actual costs may differ but need court approval. Your goal is to show that little or no income is left after covering basic needs and obligations.
You can also subtract:
These reduce your disposable income and help you pass the test. If you’re struggling with debt payment, this part of the test may work in your favor.
After subtracting all expenses, the result is your disposable income. If it's low enough, you may still qualify for Chapter 7. If it's too high, the court may decide you must file under Chapter 13 instead.
This means repaying some debts through a repayment plan. An experienced bankruptcy lawyer can help you calculate this correctly and avoid mistakes.
If you don’t pass, you're not out of options. You may qualify for other forms of debt relief or adjust your numbers legally.
Many people who fail the test turn to Chapter 13. It lets you repay debt over time through a court-approved plan. You keep your property and make monthly payments based on your disposable income.
It also helps with secured debts like mortgages and car loans. It’s a longer process, but it may fit your situation better if your income is too high for Chapter 7.
Sometimes, mistakes or outdated numbers can cause test failure. You may:
A sudden drop in income or a new medical bill can make you eligible later. Timing matters. Work with a lawyer to review all numbers before giving up.
A qualified bankruptcy attorney can explain all your options. This includes:
You may still find relief, even without passing the test. A good lawyer makes all the difference.
Do all bankruptcy filers need to take the means test?
No. Some, like disabled veterans or business debtors, may be exempt.
Does unemployment count as income in the means test?
Yes. Unemployment income is included when calculating your income.
Can I retake the means test if my income changes?
Yes. A drop in income may help you qualify later.
Will passing the means test guarantee my debts are erased?
No. The court still reviews your case and confirms if debts are dischargeable.
Should I do the means test on my own?
It's better to work with a bankruptcy attorney to avoid errors and understand the law.
If you're considering filing for Chapter 7, don’t guess your eligibility. Let Fleysher Law Bankruptcy and Debt Attorneys guide you through the means test and help you file with confidence.
We explain the full bankruptcy process, review your monthly income, and compare it to the median income for your family size. We also help you understand all your debt relief options, from liquidation bankruptcy to other solutions.
Our goal is to get you the fresh start you deserve. Whether you’re dealing with credit card debt, medical bills, or business debts, we’re here to help. Call us today for a free case consultation with an experienced bankruptcy lawyer.
Emil specializes in consumer bankruptcy, debt settlement, and mortgage modification, offering a holistic approach to solving mortgage and debt problems. Emil listens to clients, understands their circumstances and goals, and helps them make the right choices by presenting all options and contingencies.
He is dedicated to helping South Floridians regain their financial freedom from overwhelming debt caused by high interest credit cards, bad mortgage loans, and uninsured medical expenses.
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