Chapter 7 Means Test Calculator

Chapter 7 Means Test Calculator

Use this calculator to estimate your eligibility for Chapter 7 bankruptcy based on the Means Test. The Means Test compares your average monthly income to the median income for your state and household size, and then considers certain allowed expenses. This calculator uses example median income figures and IRS expense standards for illustrative purposes only. For precise results, consult a qualified bankruptcy attorney.

California Texas New York Florida Illinois Georgia Pennsylvania Ohio North Carolina Michigan

Allowed Monthly Expenses (IRS Standards – Example Values)

Enter your average monthly expenses for the past 6 months. These are based on IRS National and Local Standards, which can be complex. Use realistic estimates.

function calculateMeansTest() { var state = document.getElementById("stateOfResidence").value; var householdSize = parseFloat(document.getElementById("householdSize").value); var averageMonthlyIncome = parseFloat(document.getElementById("averageMonthlyIncome").value); var housingUtilities = parseFloat(document.getElementById("housingUtilities").value); var transportationOwnership = parseFloat(document.getElementById("transportationOwnership").value); var transportationOperating = parseFloat(document.getElementById("transportationOperating").value); var healthInsurancePremiums = parseFloat(document.getElementById("healthInsurancePremiums").value); var childCareCosts = parseFloat(document.getElementById("childCareCosts").value); var courtOrderedPayments = parseFloat(document.getElementById("courtOrderedPayments").value); var taxesMonthly = parseFloat(document.getElementById("taxesMonthly").value); var mandatoryDeductions = parseFloat(document.getElementById("mandatoryDeductions").value); var securedDebtPayments = parseFloat(document.getElementById("securedDebtPayments").value); // Input validation if (isNaN(householdSize) || householdSize < 1 || isNaN(averageMonthlyIncome) || averageMonthlyIncome < 0 || isNaN(housingUtilities) || housingUtilities < 0 || isNaN(transportationOwnership) || transportationOwnership < 0 || isNaN(transportationOperating) || transportationOperating < 0 || isNaN(healthInsurancePremiums) || healthInsurancePremiums < 0 || isNaN(childCareCosts) || childCareCosts < 0 || isNaN(courtOrderedPayments) || courtOrderedPayments < 0 || isNaN(taxesMonthly) || taxesMonthly < 0 || isNaN(mandatoryDeductions) || mandatoryDeductions < 0 || isNaN(securedDebtPayments) || securedDebtPayments < 0) { document.getElementById("result").innerHTML = "Please enter valid positive numbers for all fields."; return; } // Example Median Incomes (Annual, then converted to Monthly) // These are illustrative and do not reflect current official figures. var medianIncomes = { "CA": { 1: 65000, 2: 85000, 3: 95000, 4: 110000, additional: 9000 }, "TX": { 1: 58000, 2: 78000, 3: 88000, 4: 100000, additional: 8000 }, "NY": { 1: 68000, 2: 90000, 3: 100000, 4: 115000, additional: 9500 }, "FL": { 1: 55000, 2: 75000, 3: 85000, 4: 98000, additional: 7500 }, "IL": { 1: 60000, 2: 80000, 3: 90000, 4: 105000, additional: 8500 }, "GA": { 1: 53000, 2: 72000, 3: 82000, 4: 95000, additional: 7000 }, "PA": { 1: 59000, 2: 79000, 3: 89000, 4: 102000, additional: 8200 }, "OH": { 1: 54000, 2: 73000, 3: 83000, 4: 96000, additional: 7100 }, "NC": { 1: 56000, 2: 76000, 3: 86000, 4: 99000, additional: 7800 }, "MI": { 1: 57000, 2: 77000, 3: 87000, 4: 101000, additional: 7900 } }; var stateMedianAnnualIncome = 0; if (medianIncomes[state]) { if (householdSize <= 4) { stateMedianAnnualIncome = medianIncomes[state][householdSize]; } else { stateMedianAnnualIncome = medianIncomes[state][4] + (householdSize – 4) * medianIncomes[state].additional; } } else { document.getElementById("result").innerHTML = "Selected state data not available. Please choose another state."; return; } var stateMedianMonthlyIncome = stateMedianAnnualIncome / 12; // Example IRS National Standards for Food, Clothing, Personal Care, Misc. (Monthly) // These are illustrative and do not reflect current official figures. var irsNationalStandards = { 1: 700, 2: 1200, 3: 1500, 4: 1800, additional: 200 }; var irsNationalStandardAmount = 0; if (householdSize <= 4) { irsNationalStandardAmount = irsNationalStandards[householdSize]; } else { irsNationalStandardAmount = irsNationalStandards[4] + (householdSize – 4) * irsNationalStandards.additional; } var totalAllowedExpenses = irsNationalStandardAmount + housingUtilities + transportationOwnership + transportationOperating + healthInsurancePremiums + childCareCosts + courtOrderedPayments + taxesMonthly + mandatoryDeductions + securedDebtPayments; var resultHTML = "

Means Test Results:

"; resultHTML += "Your Average Monthly Income: $" + averageMonthlyIncome.toFixed(2) + ""; resultHTML += "State Median Monthly Income for " + householdSize + " people in " + state + ": $" + stateMedianMonthlyIncome.toFixed(2) + ""; resultHTML += "Total Allowed Monthly Expenses: $" + totalAllowedExpenses.toFixed(2) + ""; if (averageMonthlyIncome < stateMedianMonthlyIncome) { resultHTML += "Your average monthly income is BELOW the median income for your state and household size."; resultHTML += "You likely QUALIFY for Chapter 7 bankruptcy."; } else { resultHTML += "Your average monthly income is ABOVE the median income for your state and household size. Proceeding to disposable income calculation."; var disposableIncome = averageMonthlyIncome – totalAllowedExpenses; var disposableIncomeOver60Months = disposableIncome * 60; resultHTML += "Your Monthly Disposable Income (after allowed expenses): $" + disposableIncome.toFixed(2) + ""; resultHTML += "Your Disposable Income over 60 months: $" + disposableIncomeOver60Months.toFixed(2) + ""; // Means Test Thresholds (illustrative, these change periodically) var lowerThreshold = 9075; // If disposable income over 60 months is less than this, generally pass var upperThreshold = 15150; // If disposable income over 60 months is more than this, generally fail if (disposableIncomeOver60Months < lowerThreshold) { resultHTML += "Your disposable income over 60 months is below $" + lowerThreshold.toFixed(2) + "."; resultHTML += "You likely QUALIFY for Chapter 7 bankruptcy."; } else if (disposableIncomeOver60Months >= upperThreshold) { resultHTML += "Your disposable income over 60 months is above $" + upperThreshold.toFixed(2) + "."; resultHTML += "You likely DO NOT QUALIFY for Chapter 7 bankruptcy and may need to consider Chapter 13."; } else { resultHTML += "Your disposable income over 60 months is between $" + lowerThreshold.toFixed(2) + " and $" + upperThreshold.toFixed(2) + "."; resultHTML += "Your eligibility is borderline and may depend on your specific unsecured debt. It is crucial to consult with a bankruptcy attorney for a precise determination."; } } resultHTML += "Disclaimer: This calculator provides an estimate based on simplified data and should not be considered legal advice. The actual Chapter 7 Means Test involves complex calculations and specific IRS standards that are updated periodically. Always consult with a qualified bankruptcy attorney for personalized advice regarding your financial situation."; document.getElementById("result").innerHTML = resultHTML; } .calculator-container { font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif; background-color: #f9f9f9; padding: 25px; border-radius: 10px; box-shadow: 0 4px 12px rgba(0, 0, 0, 0.1); max-width: 700px; margin: 30px auto; border: 1px solid #e0e0e0; } .calculator-container h2 { color: #2c3e50; text-align: center; margin-bottom: 20px; font-size: 1.8em; } .calculator-container h3 { color: #34495e; margin-top: 25px; margin-bottom: 15px; font-size: 1.3em; border-bottom: 1px solid #eee; padding-bottom: 5px; } .calculator-container p { color: #555; line-height: 1.6; margin-bottom: 10px; } .calc-input-group { margin-bottom: 15px; display: flex; flex-direction: column; } .calc-input-group label { margin-bottom: 7px; color: #333; font-weight: bold; font-size: 0.95em; } .calc-input-group input[type="number"], .calc-input-group select { padding: 10px 12px; border: 1px solid #ccc; border-radius: 5px; font-size: 1em; width: 100%; box-sizing: border-box; transition: border-color 0.3s ease; } .calc-input-group input[type="number"]:focus, .calc-input-group select:focus { border-color: #007bff; outline: none; box-shadow: 0 0 5px rgba(0, 123, 255, 0.2); } .calculator-container button { background-color: #28a745; color: white; padding: 12px 25px; border: none; border-radius: 5px; font-size: 1.1em; cursor: pointer; display: block; width: 100%; margin-top: 25px; transition: background-color 0.3s ease, transform 0.2s ease; } .calculator-container button:hover { background-color: #218838; transform: translateY(-2px); } .calc-result { margin-top: 30px; padding: 20px; background-color: #e9f7ef; border: 1px solid #d4edda; border-radius: 8px; font-size: 1.1em; color: #155724; } .calc-result p { margin-bottom: 8px; } .calc-result .pass { color: #28a745; font-weight: bold; } .calc-result .fail { color: #dc3545; font-weight: bold; } .calc-result .warning { color: #ffc107; font-weight: bold; } .calc-result .error { color: #dc3545; font-weight: bold; background-color: #f8d7da; padding: 10px; border-radius: 5px; } .calc-result .disclaimer { font-size: 0.85em; color: #6c757d; margin-top: 20px; border-top: 1px dashed #ccc; padding-top: 15px; }

Understanding the Chapter 7 Means Test

The Chapter 7 Means Test is a crucial component of the U.S. bankruptcy code, designed to determine if an individual's income is low enough to qualify for Chapter 7 bankruptcy. Chapter 7, often referred to as "liquidation bankruptcy," allows debtors to discharge most unsecured debts, such as credit card balances and medical bills, by selling non-exempt assets. The Means Test was introduced with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) to prevent higher-income debtors from filing Chapter 7 when they could reasonably afford to repay some of their debts through a Chapter 13 repayment plan.

How the Means Test Works

The Means Test is a two-part evaluation:

1. Income Comparison: The first step compares your average monthly income over the past six months (before filing) to the median income for a household of the same size in your state. If your income is below the state's median, you generally "pass" the Means Test and are presumed eligible for Chapter 7.
2. Disposable Income Calculation (if income is above median): If your income is above the state's median, the test proceeds to a more detailed calculation. This involves deducting specific allowed expenses from your income to determine your "disposable income." These allowed expenses are based on IRS National and Local Standards, which cover categories like housing, utilities, transportation, food, clothing, and healthcare, as well as certain mandatory deductions and secured debt payments.

After calculating your disposable income, it is then projected over a 60-month (five-year) period. If this 60-month disposable income falls below a certain threshold (currently around $9,075, though this figure changes), you may still qualify for Chapter 7. If it exceeds a higher threshold (currently around $15,150), you are generally presumed ineligible for Chapter 7 and may be directed towards Chapter 13. If your disposable income falls between these two thresholds, your eligibility depends on whether it's less than 25% of your non-priority unsecured debt.

What Income is Included?

The Means Test considers most sources of income you received in the six full calendar months before you file for bankruptcy. This includes, but is not limited to:

• Wages, salary, commissions, bonuses, and tips
• Gross income from operating a business, profession, or farm
• Rental income
• Interest and dividends
• Pension and retirement income
• Unemployment compensation
• Alimony and child support payments received
• Regular contributions from household members to household expenses

Certain types of income are generally excluded, such as Social Security benefits, certain disability payments, and payments to victims of war crimes or terrorism.

What Expenses are Allowed?

The allowed expenses are critical for debtors whose income exceeds the state median. These expenses are not simply your actual spending but are based on standardized figures set by the IRS, often referred to as "IRS National Standards" and "IRS Local Standards."

• IRS National Standards: Cover basic necessities like food, clothing, personal care products, and miscellaneous items. These are fixed amounts based on household size.
• IRS Local Standards: Cover housing, utilities, and transportation. These vary significantly by geographic location (county and state).
• Other Allowed Deductions: Include health insurance premiums, term life insurance premiums, child care costs, court-ordered payments (like child support or alimony), certain taxes, mandatory payroll deductions (e.g., union dues, retirement contributions), and payments on secured debts (like mortgages or car loans) if necessary to keep the asset.

Important Considerations

This calculator provides a simplified estimate based on example data. The actual Means Test is highly detailed and requires precise figures for income, household size, and allowed expenses, which are regularly updated by the Department of Justice. Factors like special circumstances (e.g., serious medical conditions, active military duty) can also influence eligibility.

Filing for bankruptcy has significant legal and financial consequences. It is always recommended to consult with an experienced bankruptcy attorney who can provide accurate advice tailored to your specific situation and ensure all legal requirements are met.