Bankruptcy Means Test Calculator

Introduction

The bankruptcy means test is designed to answer a practical question: does your recent income and your allowed monthly expenses suggest that you can wipe out unsecured debt in Chapter 7, or would a repayment plan under Chapter 13 be more likely? That question sounds simple, but the legal test is built from several moving parts. The law looks backward over the last six calendar months of gross income, calculates an average called current monthly income, annualizes that number, and then compares it to a state median figure for a household of your size. If your annualized income is below that median, Chapter 7 is often presumptively available. If it is above the median, the analysis continues with standardized deductions and other allowed expenses to estimate how much disposable income could be paid to creditors over five years.

This calculator turns that framework into a quick educational model. You enter six months of income, a state median income figure for your household size, and several major deduction categories that commonly appear in a simplified means test discussion: national standard expenses, housing and utilities, transportation, secured debt payments, and priority debts such as child support. The result does not file a case, replace Form 122A, or substitute for legal advice, but it does help you see why two people with the same salary can get very different outcomes. Timing matters, household size matters, and classification matters. A regular paycheck can count as current monthly income, a housing allowance may reduce disposable income, and some items that feel financially important may not be treated the same way in the test.

Just as important, the means test is not really measuring whether you had a good or bad month. It is trying to smooth out short-term fluctuations. That is why a large bonus, a layoff, seasonal work, or a recent pay cut can dramatically affect the result depending on which six months are inside the filing window. Someone whose income has recently fallen may look more eligible for Chapter 7 if they wait until higher-income months drop out of the six-month average. Someone expecting a large bonus may want to understand how that extra income could change the annualized number. This calculator is useful precisely because it makes those what-if scenarios easy to compare before you sit down with an attorney.

How to Use This Calculator

Start with household size. In most consumer cases, that means counting yourself, your spouse if applicable, and the dependents who are genuinely part of the economic household. The number matters because state median income thresholds rise as household size grows. After that, enter your gross income for each of the last six months. Gross income generally means the amount before taxes and payroll deductions, not the amount that hit your bank account. If your earnings change from month to month, resist the temptation to average them yourself. Enter the actual amount for each month so the calculator mirrors the six-month snapshot used in the real test.

Next, enter the current state median annual income figure for a household of your size. This calculator does not pull the number automatically because the official tables change periodically. That manual input is intentional: it lets you model filing in different places or at different times while keeping control over the exact threshold you are comparing against. If you are not sure what number to use, review the current U.S. Trustee means testing tables before relying on the estimate. Once the median is entered, add the simplified deduction categories. These are not just household budget guesses. In the real means test, many deductions are derived from national and local standards rather than your exact cash spending, although some actual expenses also matter.

The final input is total unsecured debt. That figure matters because the law does not only look at raw disposable income. In the middle range, the projected sixty-month disposable income is also compared to unsecured debt to see whether it equals at least twenty-five percent of what is owed. In plain language, a person with modest projected repayment ability and very large unsecured debt may still have a stronger Chapter 7 argument than a person with the same repayment ability but much lower unsecured debt. After you click the button, the page will display a narrative explanation and a summary table.

• Household size: used for context and to help you compare against the right median income table.
• Months 1 through 6: gross income for each of the last six months, not a self-calculated average.
• State median annual income: the benchmark that decides whether the expense portion of the test becomes important.
• Expense allowances: simplified inputs for common deduction categories that reduce disposable income.
• Total unsecured debt: used for the twenty-five percent comparison in borderline cases.

When you interpret the result, remember the sequence. First ask whether annualized current monthly income is below the state median. If it is, that often points toward Chapter 7 without needing a full disposable-income fight. If it is above the median, look carefully at the calculated monthly disposable income and the projected sixty-month amount. A negative or very small result generally supports Chapter 7. A larger result can suggest Chapter 13, especially when it would repay a meaningful portion of unsecured debt. The recommendation text on this page is written in plain language so you can take the output into a consultation and ask sharper follow-up questions.

Formula

The core math behind this estimator has three steps. First, it averages six months of gross income to produce current monthly income, often abbreviated as CMI. Second, it subtracts the entered expense allowances and debt-payment categories to estimate monthly disposable income. Third, it projects that disposable income across sixty months, because a five-year Chapter 13 plan is the benchmark built into the means test. The calculator also annualizes CMI and compares it to the state median figure you supplied.

The recommendation logic on this page uses a simplified set of statutory threshold concepts. If annualized income is below the median you entered, the calculator states that Chapter 7 is presumptively available. If income is above the median, it uses the projected sixty-month disposable income to compare against a lower threshold of $9,075 and an upper threshold of $15,150. When the projected amount falls between those numbers, the calculator also looks at whether that amount is at least twenty-five percent of unsecured debt. This mirrors the structure of the real analysis, but it is still simplified. Real cases can include additional deductions, special circumstances, filing-status complications, and updated statutory numbers.

One subtle but important point is that disposable income is not the same as your everyday personal sense of whether you feel broke. The means test does not simply ask whether you have money left after paying whatever you usually spend. It asks whether the law allows specific deductions, some based on national standards, some based on local housing and transportation standards, and some based on actual obligations such as secured debts and priority debts. That distinction is why legal advice is often valuable. A person can feel cash-strapped yet still fail a means test, or feel stable yet qualify for Chapter 7 because the allowed deductions are strong and the six-month income average is low.

Example

Suppose you use the default values shown in the form. The six monthly income entries are all $4,500. Their total is $27,000, and dividing by six produces a current monthly income of $4,500. Annualized, that becomes $54,000. If the state median income field is set to $72,000, your annualized income is below the median. In that situation, the calculator will say that Chapter 7 is presumptively available unless other factors suggest abuse. Even before looking at the deduction side, the median comparison is already pointing you in that direction.

Now look at the expense side using the same example. The entered deductions are $2,300 for national standards, $1,500 for housing, $600 for transportation, $950 for secured debts, and $200 for priority debts. Together, those total $5,550. Subtracting $5,550 from the $4,500 current monthly income gives a monthly disposable income of negative $1,050. The calculator floors the projected sixty-month figure at zero rather than showing a negative repayment amount, because a negative figure simply means there is no projected pool of disposable income to repay unsecured creditors under this simplified model. That result strongly supports the idea that Chapter 7 may be more realistic than Chapter 13 in the example.

A second way to learn from the example is to imagine a small change in timing. If one of the six months had included a large bonus and the average monthly income increased enough to annualize above the state median, the median test would no longer provide an easy safe harbor. You would then care much more about the deduction categories and the sixty-month projection. That is why debtors often ask lawyers whether waiting one more month could change the outcome. The means test is not only about how much you earn; it is also about when you earned it and how the allowed deductions line up against that six-month window.

Limitations and Assumptions

This page is an educational estimator, not a substitute for a bankruptcy petition preparer, a lawyer, or the official means test forms. The largest limitation is simplification. Real means test calculations can include taxes, health insurance, involuntary payroll deductions, care for elderly or disabled family members, special circumstances, business expenses, marital adjustment issues, and other line items that are not separately modeled here. The calculator uses broad categories so you can understand the structure without needing to complete every official worksheet line by line.

The threshold numbers used for the low and high sixty-month comparisons are statutory benchmarks that adjust over time. State median income tables also change periodically, and local housing and transportation standards can vary by jurisdiction. That means the quality of your result depends heavily on using current figures. A stale median-income number or an outdated standards table can move a case from below-median to above-median or vice versa. If your numbers are close to any threshold, rely on current official data and professional review before making a filing decision.

Another limitation is that the means test is only one part of bankruptcy planning. Even if the math points toward Chapter 7, you still need to think about exemptions, whether you own non-exempt assets, whether any debts are non-dischargeable, whether a recent transfer might be challenged, and whether Chapter 13 offers strategic advantages such as curing mortgage arrears or protecting co-debtors. On the other hand, even if the means test points toward Chapter 13, there may still be arguments related to special circumstances or debt composition that deserve closer attention. The calculator gives you a starting structure for those conversations, not the final answer.

Finally, the calculator assumes that the categories entered are reasonably aligned with the legal concepts they represent. If you place ordinary unsecured credit-card payments into a deduction field that is meant for secured debts, your disposable income result will look better than it should. If you leave out a legitimate priority payment, your result will look worse than it should. In other words, classification is part of the exercise. That is why the mini-game below focuses on sorting common items into counted income, allowed deductions, and excluded amounts. It reinforces the idea that the means test is not just arithmetic. It is arithmetic built on legally defined categories.

Used well, this estimator can still be extremely helpful. It gives you a common language for a consultation, helps you gather the right documents, and shows how sensitive the outcome can be to changes in timing, household size, and deductions. If the result suggests Chapter 7, you can ask whether any case-specific issues might change that view. If the result suggests Chapter 13, you can ask what a plan payment might look like, how long the plan could last, and whether there are strategic reasons to wait or file sooner. Either way, you walk into the conversation better prepared.