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What is the Means Test in Bankruptcy Court?

The “Means Test” is one of the most confusing things about the bankruptcy process, and there is an art to completing it properly.

The Means Test is what we use to determine whether a debtor can file or must file Chapter 7 or Chapter 13 Bankruptcy. Basically, the means test compares the borrowers annual income against the median income as determined by the IRS. As of the publication of this blog, for a household of one person in Florida, the median income is $45,703.00, for a family of two or a household of two it’s $56,759.00 for three it’s $61,600.00 for a household of four it’s $72,958.00 and it goes up by $8,400.00 for every additional person in the household. These numbers are valid as of November 1, 2017, and adjusted annually by the U.S. Trustee’s Office and the U.S. Department of Justice.

If the debtor’s annual income is below the median income they can file chapter 7, if the debtor’s income is above the median income then we have to do a further analysis deducting a combination of actual and “IRS-allowed” expenses (which may be more or less than the actual expense incurred).  After deducting allowed expenses, we are left with the debtor’s disposable income. If that number is below a certain threshold, or negative, then the debtor can still file chapter 7 liquidation bankruptcy. However, if that number is above a certain threshold, then the Court will assume that the debtor has that much money in disposable income and will have to repay unsecured creditors at least that amount monthly in a chapter 13 reorganization plan.

As you can see from this simplified explanation, the means test is very complicated, which is why it is very important to choose an attorney that understands the means test in detail and can help the debtor work through those numbers prior to filing the bankruptcy petition. 

For more information on bankruptcy, Chapter 7 liquidation or Chapter 13 reorganization, please subscribe to the Crushing Debt Podcast, on iTunesStitcher, and GooglePlay. You can also listen to episodes directly on the Yesner Law website. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at

Shawn M. Yesner, Esq., is the host of the Crushing Debt Podcast and founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate the financial bullies in their lives. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.

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