What is the Means Test for a Chapter 7 Bankruptcy Filing
Before you can file for a Chapter 7 bankruptcy, you need to pass the Pennsylvania bankruptcy Means Test. While it may sound complicated, it is relatively easy.
The Means Test compares the median income for a household of the same size as yours in Pennsylvania to your household income. If your income is below the median, you qualify for a Chapter 7 bankruptcy. If you do not qualify for a Chapter 7 bankruptcy based on your income, you need to complete the Means Test.
Some exemptions exist for taking the Means Test. You are exempt if you are a disabled veteran who got into debt during active duty or were protecting the territory or population of the United States or infrastructure critical to national security from a threat. You are also exempt from the Means Test if your debts are not mainly consumer debts, meaning that they were incurred by a business.
Just because you pass the Means Test and you can file a Chapter 7 does not mean that you should proceed to do so. However, you should consult with an experienced bankruptcy attorney who can assist you in determining the best course of action.
How Is Your Average Household Income Determined
Your average household income is arrived at by assessing the average of what you made each month over the last six months, then multiplying that by 12. For example, if you made $3,000 on average every month over the previous six months, multiply that by 12, and get $36,000.
Figuring out the median income depends on your state, household size, as well as your city and county. The residential location can impact the acceptable Means Test amounts.
Below is a list of the household incomes from Pennsylvania. These numbers change over time, so it is a good idea to check the household incomes for Pennsylvania with a bankruptcy attorney at Melaragno, Placidi & Parini. We can help you determine what bankruptcy Chapter is best for your current situation.
- 1 Member Household - $57,919*
- 2 Member Household - $71,448*
- 3 Member Household - $88,293*
- 4 Member Household - $105,138*
- 5 Member Household - $114,138*
- 6 Member Household - $123,138*
- 7 Member Household - $132,138*
- 8 Member Household - $141,138*
- 9 Member Household - $150,138*
- 10 Member Household - $159,138*
*As of March 2022
Filing for bankruptcy can be a complex and frustrating process. Many questions arise, like, do I qualify? Do I file for Chapter 7 or Chapter 13? Which one would be best for me? Are my debts business or consumer? A qualified and highly experienced bankruptcy attorney at Melaragno, Placidi & Parini can help you understand the Means Test and how to qualify for Chapter 7 bankruptcy.