Quick Answer: The bankruptcy means test determines whether you qualify for Chapter 7 bankruptcy by comparing your household income to your state’s median income for your household size. If your income is below the median, you likely qualify. If it’s above, you may still qualify after expense deductions — or Chapter 13 may be the better path. Use this free estimator for a preliminary assessment.
Not sure if bankruptcy is right for you yet? Take the Should I File Bankruptcy Quiz first — 8 honest questions, 2 minutes. Come back here once you’re ready to check eligibility.
Do You Qualify for Chapter 7 Bankruptcy?
Filing bankruptcy was the best financial decision I ever made — and I spent years thinking it would be my worst. I filed in 1990 when my business collapsed. I know the fear, the shame, and the relief that comes after. The means test is the first step to finding out if Chapter 7 is available to you.
Select your state and answer three quick questions below. You will get a personalized estimate of your Chapter 7 eligibility, plus information about your state’s exemptions and what to expect.
Not sure bankruptcy is right for you? Take the Find Your Path Quiz for personalized guidance. Being contacted by collectors? Check the Debt Collector Rights Lookup. Considering a debt relief company? Run them through the Scam-O-Meter first.
Bankruptcy is not a moral failing — it is a legal tool designed to give you a fresh start. I filed in 1990, and it was the beginning of everything I have built since.— Steve Rhode
What Is the Bankruptcy Means Test?
The means test was introduced by Congress in 2005 to determine who qualifies for Chapter 7 bankruptcy (complete debt discharge) versus Chapter 13 (repayment plan). It compares your household income to the median income in your state for your household size.
How the Means Test Works
- Step 1: Compare your household income to your state’s median for your household size
- Step 2: If below median, you pass — Chapter 7 is available
- Step 3: If above median, deduct allowed expenses (mortgage, car, medical, childcare, taxes)
- Step 4: If disposable income after deductions is low enough, you still qualify for Chapter 7
Key Insight: Many people who assume they earn too much for Chapter 7 actually qualify after expense deductions are applied. A local bankruptcy attorney knows exactly how deductions work in your district. Do not rule yourself out without consulting one.
Chapter 7 vs. Chapter 13
Chapter 7 — Fresh Start
- Discharges most unsecured debt completely
- Completed in 3-4 months
- Keeps exempt property (retirement, home equity up to state limit, vehicle)
- Credit rebuilds faster than most people expect
Key Takeaways
- The means test compares your income to your state’s median — below median means Chapter 7 is available
- Even above-median earners often qualify after expense deductions
- Retirement accounts (401k, IRA) are always protected in bankruptcy
- Credit typically recovers within 12-18 months after filing
- A free attorney consultation is always worth pursuing — never rule yourself out based on assumptions
