Do You Have Enough Disposable Income to Repay Some Debts?

For those whose household income exceeds the state median, the means test computations get significantly more complex. You must determine whether you have enough income left over (called "disposable income"), after paying your "allowed" monthly expenses,to pay off at least a portion of your unsecured debts (such as credit card bills). If your disposable income adds up to more than a certain amount, you fail the means test and cannot file for Chapter 7.

Use an Online Calculator

If you're looking for an easy way to determine your status under the means test, use the online means test calculator at www.legalconsumer.com. This calculator is free, anonymous, and does not require registration. Created by Nolo author Albin Renauer, the calculator is an ideal companion to Nolo's book How to File for Chapter 7 Bankruptcy. Once you enter your zip code, the calculator uses the applicable income and expense standards for your state, county, and region to determine your eligibility.

If You Pass the Means Test

Of course, just because you qualify under the means test does not necessarily mean you should file for Chapter 7 bankruptcy -- merely that you can. Any decision to file for Chapter 7 bankruptcy should be made only after considering alternatives and other factors discussed in other articles on this website or in Nolo's The New Bankruptcy: Will It Work for You?, by Attorney Stephen Elias.