How is my income calculated? 

The bankruptcy court looks at your last six months worth of income from al courts plus the income received from other household members including your spouse as long as are your not living separately, even if you are not filing for bankruptcy together.  Those numbers are added up and divided by six to get an average monthly income.  This is called current monthly income.  Money you or your household members receive or have received during the past six months from Social Security and certain other sources do not count in our calculations but must still be disclosed.

What expenses are taken into account for means testing purposes? 

Your monthly expenses are the applicable monthly expense amounts specified under the National Standards and Local Standards and your actual monthly expenses for certain other categories specified as “other necessary expenses” issued by the Internal Revenue Service for the area in which you reside, for you, your dependents, and your spouse if you are filing for bankruptcy together.  Such other necessary expenses including health insurance, disability insurance, and health savings account expenses for you, your spouse, and your dependents.  Monthly expenses also include money that you pay for the care and support for an elderly, chronically ill, or disabled household member or members of your immediate family.  Various other expenses are also taken into account for the purpose of means testing.

How do you fail the means test?

  Technically, there is no “pass” or “fail” in the means testing. Rather, the court looks at the number that results from your current monthly income less your allowable expenses.  If the resulting number is less than the lesser of 25 perfect of your nonpriority unsecured claims or $6,000.00 whichever is great, or $10,000.00 you will be eligible to file for Chapter 7 bankruptcy, without the presumption that you are abusing the court.


For a complimentary initial consultation to see if you qualify for Chapter 7 bankruptcy, call our office to set up an appointment.
We are conveniently located in Cascade, barrier free entry, and offer free parking.

Watt Law Firm
2951 Thornhills Avenue SE

Grand Rapids, MI 49546
Telephone No. 616.776.0000