Q: How does the bankruptcy means test work?
A:
The bankruptcy means test is only one part of qualifying for a Chapter 7 case. The first step is convert your income from the past 6 full months to annual income and compare it with the IRS standards for similar household. If your income is less than the IRS standard you are considered below median income and you pass.
If your income is over, that does not necessarily mean you don't qualify to file a Chapter 7. The next step is to take a deeper look at your income, deductions, and secured expenses to see if you could make a meaningful Chapter 13 Plan Payment. If you can't make a meaningful plan payment, then you qualify to file Chapter 7 even though you did not pass the means test.
The means test calculations are not straightforward. Consult with a local bankruptcy attorney in your area to find out if you qualify to file a Chapter 7.
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