How to Pass the Means Test

Upon first learning about the means test portion of a Chapter 7 bankruptcy, many people understandably have some concerns about how difficult it will be to pass the test. The purpose of the means test is to compare a debtor's current income to the median household income for his or her state to see if he or she possible makes too much money to file for Chapter 7.

Since a state's median household income is essentially the midway point for all incomes in the state, half of all households have incomes that are less than the state median income and the bankruptcy means test becomes unnecessary. When a debtor has a higher income than the state median, it can make completing the means test more difficult but not necessarily impossible.

Bankruptcy Attorney in Cincinnati, OH Discusses How to Pass the Means Test

Are you worried about passing the means test when you file for Chapter 7 bankruptcy in Kentucky or Ohio? Contact Steiden Law Offices right away to ensure that you get the fresh start you need and deserve.

Our Cincinnati bankruptcy lawyers represent clients in Kenton County and Boone County in Northern Kentucky as well as Hamilton County in Southern Ohio. They can review your case and answer all of your legal questions as soon as you call to schedule a free, confidential consultation.


Overview of How to Pass the Means Test in Northern Kentucky


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Types of Expenses that Can Help Pass Bankruptcy Means Test

The simplest way to improve a debtor's position if he or she has a current income that exceeds the state median is to add other members to his or her household. It is important to understand that children, stepchildren, and other individuals can be counted as household members even if they are not technically dependents on the debtor's tax return.

Additionally, debtors should be certain to deduct some of the following key expenses that can also tremendously impact the means test:

  • Charity donations;
  • Child care;
  • Continuing care of elderly, chronically ill, or disabled family member or person in debtor's household;
  • Court-ordered payments (child support, alimony, etc.);
  • Educational expenses for disabled child;
  • Health, disability, or term life insurance;
  • Income tax obligations;
  • Involuntary employment deductions (union dues, retirement plans, etc.);
  • Out-of-pocket health care costs; and
  • Secured debt (mortgage, car loan, etc.).

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Using Employment to Pass the Means Test

Many people who are preparing to file bankruptcy have taken on second jobs in an effort to make ends meet. When such individuals are considering filing Chapter 7, income derived from overtime hours or a second job can often lead to a presumption of abuse finding because the additional income can be viewed as being sufficient to warrant a Chapter 13 repayment plan.

Debtors at risk of making too much money may cut back on hours in order to ensure that they pass the means test. Because income analysis looks back six months, these types of moves can require a certain degree of advance planning and it is in your best interest to first speak to an experienced bankruptcy attorney.


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Ohio Resources for How to Pass the Means Test

Chapter 7 Line by Line means test analysis final | United State Department of Justice — View the full text of an April 23, 2010 document outlining the position of the United States Trustee Program (USTP) on various recurring disposable income issues likely to arise in chapter 7 bankruptcy cases. The referenced lines in this document are those on the Form 22A. The statement of the USTP's position on legal issues arising under the Chapter 7 means test provides guidance as to how United States Trustees should interpret BAPCPA provisions of 11 U.S.C. § 707(b) relating to filing status, income from all other sources, and marital adjustment.

Bankruptcy Basics | Administrative Office of the United States Courts — View the full text of this November 2011 guide from the Bankruptcy Judges Division of the Administrative Office of the United States Courts. The guide states that it is "designed to provide basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of the federal bankruptcy laws." Find information about bankruptcy discharges, bankruptcy terminology, and Chapter 7 liquidation under the Bankruptcy Code.


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Steiden Law Offices | Cincinnati Chapter 7 Bankruptcy Means Test Lawyer

If you are preparing to file for Chapter 7 bankruptcy and are scared about not being able to pass the means test, it will be in your best interest to seek legal representation. Steiden Law Offices can review your entire financial situation to help you determine the best path forward.

Our Cincinnati bankruptcy attorneys assist individuals in communities throughout Southern Ohio and Northern Kentucky. Call or complete an online contact form to have our lawyers provide an honest and thorough evaluation of your case during a free initial consultation.



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