Legally reviewed by Allen A. Kolber, Esq. - The Law Offices of Allen A. Kolber, Esq., P.C.
Key Takeaways
- The test compares your income to the New York median for your household size, not a county figure.
- Social Security benefits are excluded from the income calculation entirely.
- Coming in above the median is not a disqualification; allowed expenses are deducted next.
- The figures change roughly twice a year, so check the ones in force when you file.
Your financial situation may be desperate enough that you want to claim bankruptcy. However, this alone does not guarantee your eligibility to file. That is, specifically for Chapter 7 bankruptcy, you will have to prove to the federal bankruptcy court handling your case that you undoubtedly pass the imposed means test. Without further ado, please continue reading to learn how to pass the means test and how an experienced Rockland County Chapter 7 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C., can help compute your eligibility.
What Should I Know About the Means Test?
Simply put, the means test determines whether your income allows you to repay your debts. In other words, if this test shows that you can afford your debts, you may be ineligible for debt relief benefits granted in a Chapter 7 bankruptcy proceeding.
For the means test, you must first calculate your gross income over the six months immediately before your bankruptcy filing date. Then, multiply this number by two for an accurate estimation of your average annual income. You must take this number and compare it to your state’s median income for a family of your size. So if your income is below the state’s median, you may automatically pass this test.
The Department of Justice generally revises these figures roughly twice per year, so the ones that govern your case are whichever are in force on the day that you file. For cases in New York filed on or after July 15, 2026, the median family income figures are as follows:
- For a family of one: the median income is $73,272.
- For a family of two: the median income is $92,902.
- For a family of three: the median income is $115,579.
- For a family of four or more: the median income is $139,040, plus $11,100 per additional family member.
Three Things People Get Wrong About the Income Figure
The comparison is to the median for New York State, not to Rockland County. Household size also matters, so a family of four is measured against the four-person number rather than the individual one.
Additionally, the six-month window runs over the six full calendar months prior to when you file, so a petition filed on September 15 looks at March through August, rather than the six months ending that day.
Social Security Benefits Do Not Count
Current monthly income will sweep in almost everything, regardless of whether or not it’s taxable. This can include:
- Wages
- Overtime
- Commissions
- Rental income
- Pensions
- Any other regular contributions someone else makes toward your household expenses.
Benefits received under the Social Security Act are excluded. This covers:
- Retirement benefits
- Disability
- Supplemental Security Income
For a filer whose income is primarily comprised of Social Security, that exclusion may decide the whole question.
What Can I Do to Pass the Means Test for Chapter 7 Bankruptcy?
You may not automatically pass the New York State means test given your gross annual income. However, you may still fight to prove your eligibility for Chapter 7 bankruptcy by deducting your allowable expenses. This is to arrive at your average disposable income. And if you have a considerably low disposable income, you may establish that you cannot afford to pay off your debts without the help of a bankruptcy case. With that in mind, below are types of expenses that may help you pass the Chapter 7 means test:
- Your mortgage and car payments.
- Your nondischargeable, overdue tax debt.
- Your court-ordered payments and arrearage balances.
- The cost of your necessary child care (i.e., babysitting, day care, preschool, etc).
- The cost of your necessary care for an elderly, ill, or disabled family member in your household.
- Your involuntary wage deductions (i.e., retirement payouts, union dues, uniform purchases, etc).
- Your critical health insurance payments, life insurance payments, and out-of-pocket medical expenses.
The Number You Are Aiming For
The deductions result in a monthly disposable income figure, which the official form will then multiply by 60, projecting it across five years. If the result is less than $10,275, there is no presumption of abuse, and you have passed the means test. If the amount is over $17,150, the presumption will apply.
If you fall between the two figures, the form will compare your total to a quarter of your non-priority, unsecured debts to make a decision. These amounts will adjust on April 1, 2028.
Failing Is Not the End of It
A presumption of abuse can be rebutted by documenting special circumstances, such as a serious medical condition, that justify expenses or income adjustments the standard deductions do not capture. Two groups skip the test altogether: filers whose debts are primarily business rather than consumer debts, and certain disabled veterans whose debts arose during active duty. And if the presumption stands, Chapter 13 bankruptcy remains available.
Contact Our Experienced Bankruptcy Firm Today
If you need help with executing this, do not be afraid to reach out to a skilled Rockland County bankruptcy attorney. Our team at The Law Offices of Allen A. Kolber, Esq., P.C., is more than capable and eager to assist you with your legal proceedings. Contact us today to learn how we can represent you.
