Chapter 7 Means Test
Akron & Cleveland, Ohio

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In more times than not if you’re considering bankruptcy then you will qualify to file Chapter 7 or Chapter 13 bankruptcy. However, there are some requirements to be eligible to file Chapter 7 Bankruptcy in Akron or Cleveland, Ohio and one of them is the Chapter 7 means test. This means test determines if your income is low enough to qualify for Chapter 7 bankruptcy and is used to prevent people with substantial excess income (after all normal expenses) from filing Chapter 7 bankruptcy. If someone fails the Chapter 7 mean test then they’ll probably qualify for Chapter 13.

So you know, it isn't neccesary to have very low income or be without a job to file Chapter 7 bankruptcy. People with significant income file for bankruptcy all the time. People with regular, substantial income may qualify through the Chapter 7 means test because it takes into account their income minus their expenses, so if you have a high car payment or mortgage payment you could qualify for Chapter 7 bankruptcy.

Chapter 7 Mean Test:

The Chapter 7 means test is used to determine your monthly disposable income which is the amount of money left after your normal current monthly income (an average of your income over the past six months) after certain expenses are deducted.

If your disposable income is too high according to the Chapter 7 bankruptcy laws, then you’re not permitted to file Chapter 7 and Chapter 13 is the next bankruptcy option.

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Disposable Income = Current Monthly Income (an average over the past six months)
- Living Expenses and debt payments

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If your income is less than the median income for a household of your size in Ohio then you do not have to determine disposable income and you automatically qualify for Chapter 7 bankruptcy.

Ohio’s median income by family size in 2013:

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Income, Household size

$42,814, 1 earner
$53,218, 2 people in household
$60,960, 3 people in household
$74,270, 4 people in household
*add $8,100 for each individual in excess of four.

Your current monthly income should include all of the following applicable income:

• wages, salary, bonuses, commission
• net income from rental properties
• retirement income
• net income from your business
• unemployment payments
• disability payments from the state
• workers’ compensation
• child support
• alimony
*Include all taxable and non-taxable income except:
• Social Security payments
• payments to victims of war crimes

Calculate current monthly income for the Chapter 7 means test:

Add up all current monthly income over the past six months and divide it by six to get the average. That number is your current monthly income used to determine your Chapter 7 eligibility.

If your income varies from month to month or you just received an infrequent bonus or your profession if built around peak seasons or long sales cycles, then your current monthly income could be calculated differently. If this is the case, then contact our bankruptcy attorney, Dean Paolucci. He can tell you right away what the average of your current monthly income will be if you provide the details of your income situation.

So now that we have current monthly income, you subtract your expenses to get your disposable income.

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If your disposable income is less than $6000/month, you qualify for Chapter 7 bankruptcy.

If your disposable income is more than $10,000/month, you probably don’t qualify for Chapter 7 but you should consult with Dean Paolucci, our Akron and Cleveland bankruptcy attorney.

If your disposable income falls between $6000 and $10,000/month, we’ll need to do an additional calculation and our bankruptcy office can help determine your eligibility of Chapter 7.

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View and print the official Chapter 7 means test form here.

The Chapter 7 means test can become a tricky calculation for some people. We’re here to answer any questions you may have about qualifying for Chapter 7. We determine Chapter 7 bankruptcy eligibility daily. Contact us below and we’ll do the calculation for you.