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The Bankruptcy Means Test and Limits are Not Fair. – Colette

“Dear Steve,

Family of 4, one income family with debt that we want to clear up

Filed chapter 13 Nov. 17th. We are a 4 person household with one person working. We have no problem paying our debt back but the monthly amount is so high that we are trying to figure out how to pay our monthly bills and eat. Due to this “means test” and everyting being template the test is unfair because our bills are so much higher than the test will alot for. Is there anything at all that we can do? We are paying $2500.00 per month rent and $3200.00 per month for chapter 13 and our lawyer is no real help whatsoever…….



Dear Colette,

Thanks for the question. I’m feeling like being blunt and honest today so here it goes.

The bankruptcy means testing sucks. It has always been crap and it will never be fair to anyone. After all, who is average?

The means test is not something your bankruptcy attorney wants to do. It was forced on the bankruptcy attorneys by creditors under the Bankruptcy Reform Act of 2005.

From what you’ve shared with me I would bet the issue here is that your life exceeds the means testing guidelines. You probably spend more collectively each month than the allowable tables permit. The tables for living expenses and housing are based on data and figures from the IRS guidelines.

If you want to see the current data used for the means test, you can find it online here. This is the data all bankruptcy attorneys must use and it breaks down expenses by where you live.

The allowances are almost laughable. For example, the allowed amount for out of pocket health care is $60 a month. That’s supposed to cover medical services, prescription drugs, and medical supplies (e.g. eyeglasses, contact lenses, etc.).

So where does this leave you? The most logical first step is to make the necessary life adjustments to reduce your housing, utility, transportation food, clothing, health care and other obligations to fit within the guidelines.

Generally, the reaction of most people is they can’t do that for one reason or another. I understand that. But it is what it is. And what it is, is a box the creditors built for you and lawmakers agreed to. The voting on that bill went like this:

18 – Yes
25 – No

55 – Yes
0 – No

“The bill was backed by the White House, the credit card industry, retailers, and financiers. The bill was opposed by consumer rights groups who said it was too harsh and did not take into account dire situations faced by those who face divorce, disease, job loss, and other crises.

“Banking, credit card, and retail” industries, supporters of the bill, gave more than $56 million to candidates and parties during the 2004 elections, most of it going to Republicans.”


If you can’t tell, I don’t have any love for BAPCPA 2005 and its means testing. To this day still blame the Bush White House and republican legislators for passing one of the most cruel bankruptcy amendments I’ve ever seen. All it did was punish consumers. And you are now living through that.

What I would suggest doing is to make an appointment with the lawyer, go in, sit down face-to-face and discuss what the allowances were for your case. Then discuss what options you might have in applying for a plan adjustment or what will happen if you are unable to make your plan payments and the plan fails.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Jeff Jackson


    Every piece of information posted here is great.

    The problem is the Bankruptcy Process is very tedious and detailed. As I am sure you are aware, you had to provide an enormous amount of information to your attorney. You do need to be involved in the process.

    As Carl pointed out, if you can justify the living expenses that exceed the means test standards, then do so. Provide supporting documnents to your attorney that justify a $600 per month utility expense. If your transportation costs are above average, justify it. Do you and your husband have to travel significant distances? Does your family “have” medical expenses that are justified above the average?

    I think you owe it to yourself and your attorney to set up an appointment and fully discuss the issues. Your attorney cannot adequately represent you if he/she does not know the full picture. Bankruptcy is FULL DISCLOSURE. Your attorney needs your input to make sure you have the best outcome.


  • Carl H. Starrett II

    The real problem here is the apparent breakdown of the relationship between the attorney and client. The case is barely filed and the debtors are clearly not happy with their attorney, so something is wrong here. While the means test is truly a royal pain, the characterization of the means test as completely mechanical without flexibility is simply inaccurate.

    In a Chapter 13 cases, the means test form (B22C) has 2 places for debtors to itemize deductions due to special circumstances if the means test allowances does not accurately reflect the debtors’ reality. If the normal allowance for energy is $300 and the debtors’ actual usage, the debtors can claim these expenses on Line 57 and/or Line 60 an order to propose a lower plan payment. It may draw an objection from the trustee and require proof to be submitted of the necessity of the expense, but those arguments can be made to the judge at a confirmation hearing. If this wasn’t done, then perhaps a second opinion is in order.

    Getting Chapter 13 plans confirmed is more of an art than a science and I learn something new every time I file a new bankruptcy case. Bankruptcy is a team effort between the attorney and the client. If the team can’t communicate, maybe there needs to be a change.
    .-= Carl H. Starrett II´s last blog ..Beware of Phony Payday Loan Debt Collectors =-.

  • Colette

    My issue remains..The “means test” is not fair

    • Steve Rhode


      I’m with you, you know I’m not a fan of the means test. But we’ve got to deal with your reality today to resolve the issue.

      It seems to me we have two issues.

      1. There are communication and personality issues with the current bankruptcy attorney you are working with.
      2. The damn means test box you are in.

      Take it for what it is worth but here is what I would suggest. Rather than make the poor communicating bankruptcy attorney the villain here let’s try to rescue what we can and get you in a position to move forward.

      I would humbly suggest that you make an appointment to go in and see the bankruptcy attorney face-to-face. Be nice when scheduling the appointment. When you go in take some cookies to the office staff and thank them for there help. Wrap them in a bow. Be nice. Kill them with kindness. After all we know who really runs an office, don’t we?

      The goal here is to cross rough waters and bring your legal advocate back to your side and make them your friend again. Your new found friends can be helpful in moving this forward. Being on friendly terms will help you to rebuild communication, if possible, and that only helps. Once you can communicate in a more relaxed atmosphere then you can ask for their help in repairing this situation. The ultimate question needs to be “What can you help me do to make this situation better?”

      I’ll reserve judgment about what the next steps are till you report back how that went. But the options are a plan modification, a reduction in your lifestyle expenses to fit within the plan, or a plan failure.

      What do you think, does this approach make sense and seem reasonable? Are you with me?

      Big hug.


  • Colette

    Trust me, it would have been alot easier to make that decision had we not already given the attorney alot of money…………….:-)

  • Colette

    The system is set up( or atleast it was for us) that you have to pay thousands of dollars before you 1. find out that you have to pay 100% of the debt, 2. 20,000.00 to a Government Trustee, 3. What your monthly payment is going to be. Because the attorney tells you something much lower as you are giving them a check.

    So we had to decide rather to throw away what we had already given the attorney(non refundable) or try to pay our debt thru bankruptcy.

  • Carl H. Starrett II

    The point is that all of this should have been worked out before you filed. If you can afford a 100% payout out to unsecured creditors, then what is the point of even having filed?

    If your expenses exceed the means test allowances, then your attorney can argue for a lower repayment plan. You sat that your “lawyer is no real help whatsoever”. That’s a difficult statement to accept at face value and it appears that you have a communication issue with your attorney.
    .-= Carl H. Starrett II´s last blog ..Chapter 7 Bankruptcy Options for Business Owners – Part I =-.

  • Colette

    To Steve and to Jeff, thank you for your help. To Carl, it’s not that we waited 3 weeks. I have been looking for advise and help since before we filed, had you asked you would have known that. It’s not that we are perjuring ourselves, it’s that we see how much we have every pay day and the bancruptcy court doesnt, because we have a $600.00 energy bill and they only allot $300.00. We have 3 cars with car insurance(required by law) and they will only allot for two. We have to pay for gas for 3 cars and they will only allot for 2. The bottom line is that the “means test” does not use actual expenses of the consumer. We have no problem paying our debt but it shouldnt be to the extent of being homeless. How is this even considered bancruptcy if you are paying in full and an additional $20,00.00 to the trustee to pass it out for you? So thanks for your input.

  • Carl H. Starrett II

    It is possible that you or your attorney missed deductions that are allowable deductions for the purposes of the means test. As Mr. Jackson suggested, you need to sit down with your attorney and review the expenses. It doesn’t make much sense to sign under the penalty of perjury that you an afford a $3200 a month plan payment and complain 3 weeks later than you cannot pay your bills. If you cannot make the plan payments, then you plan is unfeasible and cannot be confirmed.
    .-= Carl H. Starrett II´s last blog ..Chapter 7 Bankruptcy Options for Business Owners – Part I =-.

  • Jeff Jackson


    Yes the means test can seem unfair and attorneys do not like it amymore than you do.

    Based on the information you have provided, it sounds like your household income is fairly decent. If you are concerned about the amount of the payment, please review your means test to see if all the additional expenses have been accounted for, and that you truly are above median.

    Secondly review your Sched I (income) and Schedule J (expenses). From what you have told us, your rent is $2500 per month and after all your living expenses are considered, you have $3200 per month available to pay to creditors. If your Sched J does not adequately reflect your living expenses, then talk with your attorney and have it adjusted. The amount of your Plan Payment is based largely on the last number of your Schedule J (discretionary/available income).

    I am trusting that your attorney has properly prepared your file and that you have reviewed all the forms and schedules.
    If you are currently living way beyond the median expenses, be prepared to either justify that point before the court or make adjustments to your lifestyle so you can complete the plan.

    I hope this helps and I wish you the best of luck.


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