Means Test in Bankruptcy

If you're considering Chapter 7 bankruptcy, you should check if you pass the Chapter 7 means test.

What is the Bankruptcy Means Test Requirement

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires most debtors, who's debts are primarily consumer debts, to be subject to a “means test” designed to determine whether the debtor is abusing the system. The means test is based on the median income of the debtor's state. If the Debtor exceeds the income limit, a "presumption arises" that the debtor is abusing the system that must be overcome by the debtor. Benefits received under the Social Security Act, or payments received as a victim of a war crime, crime against humanity, or as a victim of international or domestic terrorism are not included in the means test calculation. In the event that the debtor cannot overcome the presumption, the debtor will be forced to convert his case to a Chapter 13 case, and pay a certain percentage to unsecured creditors in a three to five year payment plan.

What is the Current Bankruptcy Median Income for New York State (4/1/23)

$68,814.00 - 1 Person Family.
$84,958.00 - 2 Person Family.
$103,444.00 - 3 Person Family.
$126,167.00 - 4 Person Family.
Add $9,900.00 for each additional person.