The bankruptcy means test is a product of the 2005 BACPCA law changes and is used to determine eligibility for Chapter 7 or Chapter 13 bankruptcy.  When the means test is applied, the court will look at the debtor's average income for the six months prior to the filing date as compared to the median income for the State or Arizona. If the income exceeds the median income for the number of people in the debtor's household, the means test is applied.  The entire household income is used in this calculation.

The court will then use standard living expenses issued by the IRS to determine if the debtor has enough disposable income leftover each month to justify payment to unsecured creditors through a Chapter 13. The higher your disposable monthly income, the less likely you will qualify for Chapter 7.

Our experienced Phoenix bankruptcy lawyers can determine if the means test applies to you and whether Chapter 7 or Chapter 13 is your best option.