Florida Means Test

Florida Means Test, Chapter 7 Bankruptcy

In order to be eligible for a Chapter 7 Bankruptcy, debtors must pass the “means test” which determines whether the debtor has any disposable income to pay to their creditors.    

How Does the Means Test Work? 

Is your income more than the median? 

First step is to determine if you have any disposable income is to see if your income is less than the media income for your household size.  If your income is less than the median, then it is presumed that you have no disposable income to pay to your creditors, or as they say in the forms, it is “presumed no abuse” for you to file a Chapter 7.  The means test is based on the debtor’s 6 months of income before filing the bankruptcy.  Keep in mind this is a bit of a moving target and could be impacted by quarterly bonuses or income fluctuations.  This calculation can get complicated and is why we recommend seeking legal counsel. 

Above median debtors will need to account for expenses. 

If a debtor’s income is above the median, there is still a chance they can become eligible for a Chapter 7 by completing the second part of the Means Test, which subtracts expenses from the debtor’s income to see how much disposable income is remaining on a monthly basis.  Half of the expenses are based on IRS national and local standards, while the other half are based on the debtor’s actual expenses.  Some of the rules and calculations pertaining to the Means Test can get extremely complicated, but generally speaking if your disposable monthly income is $200/month or more, then you will not be eligible for Chapter 7 but can explore Chapter 13 instead.  

Our highly trained bankruptcy attorneys will run this analysis for you at the very beginning of your case and will review the results with you thoroughly.