The means test is a formula that the court uses in order to determine eligibility for a chapter 7 or to determine the amount of debt that needs to be repaid in a chapter 13. The means test looks at the last 6 months of your gross income excluding social security or VA disability, to show what the average gross monthly income is. If your 6 month average gross monthly income is less than that of the average for your household size, generally that means that you are allowed to proceed with a chapter 7 bankruptcy.
California’s average gross monthly income for household sizes are as follows (As of 8/2020):
| Household Size | Median Monthly Income | Median Yearly Income |
| 1 |
$5,030.00 |
$60,360 |
| 2 |
$6,605.92 |
$79,271 |
| 3 |
$7,352.92 |
$88,235 |
| 4 |
$8,442.92 |
$101,315 |
| 5 |
$9,192.92 |
$110,315 |
*https://www.justice.gov/ust/eo/bapcpa/20200501/bci_data/median_income_table.htm
If your gross income is slightly higher than these figures for your household size, there is still a possibility that you could qualify for a chapter 7 bankruptcy. The means test uses IRS standard living expenses for your household size and area. It also allows for tax withholdings and various other limited expenses to be reflected in the means test to lower income. These same procedures are used when determining how much debt can be repaid in a chapter 13 bankruptcy.
As always, there are many factors that go into someone qualifying for a chapter 7 bankruptcy or determining how much debt is repaid in a chapter 13. It is best to contact your Stockton Bankruptcy attorney for a free initial consultation to determine your eligibility.
For more information, contact your Stockton bankruptcy attorney at 209-952-0355.