How to Complete a Means Test for Bankruptcy

Recent changes to U.S. bankruptcy laws include the addition of a requirement that each debtor must complete a means test before filing for bankruptcy. The means test determines whether a person may be ineligible for bankruptcy, typically because her debt is primarily consumer debt.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Form 22A or 22C

1. Provide your calculation and results for your means test to the court as a part of the debtor's schedule of current income and expenditures.
2. Locate necessary information to complete your form on the Department of Justice website (see Resources below). This information includes the "State Median Family Income" and the "National and Local Standards."
3. Complete those parts of your form from your records that you can. Calculate totals and finish filling out the form.
4. Obtain either Official Bankruptcy Form 22A (if you are filing under for Chapter 7) or 22C (for Chapter 13). They are both available online from the U.S. Department of Justice.
5. File for bankruptcy under Chapter 13 if you do not qualify for Chapter 7 according to the means test. The law is structured so that debtors are encouraged to file under Chapter 13, because they will still be expected to make some repayment, instead of having their debt discharged completely, as would occur under Chapter 7.

Tips & Warnings

• A complete means test often makes it easier to obtain a discharge, despite the intentions of the law.
• If you are a disabled veteran and incurred your debt while on active duty, you can complete Parts I and VIII of "Official Bankruptcy Form 22A" and essentially leave the rest of the form blank.
• For debtors filing under Chapter 13, the means test is used to determine disposable monthly income and create a basis for determining the rate at which creditors must be repaid.
• The bankruptcy means test is required under the controversial Bankruptcy Abuse Prevention and Consumer Protection Act and is intended to make it more difficult for some debtors to obtain a discharge of their debts under Chapter 7.
• While instructions for many bankruptcy forms are available through the U.S. Courts, instructions for Forms 22A and 22C are currently unavailable because they are under revision.
• Form 22A requires you to mark either a box stating "The presumption arises" or "The presumption does not arise." The presumption in question is that of abuse. This statement is not binding, but consumer advocates argue that it should be removed.