What is the Means Test in Bankruptcy?

The means test in Maryland, as in other states, is a crucial component of the bankruptcy filing process, specifically for Chapter 7 bankruptcy cases. It is designed to determine whether an individual or household’s income is low enough to qualify for Chapter 7 bankruptcy, which is a form of debt relief that allows for the discharge of unsecured debts, such as credit card debt and medical bills, without the need for a repayment plan.

If you reach out to an experienced bankruptcy lawyer in Maryland, one of the first things they will do is a means test. Unlike doing it yourself, a lawyer can help determine your disposable income and may be able to find items you may otherwise overlook.

The means test aims to prevent abuse of the bankruptcy system by ensuring that only those who truly need debt relief through Chapter 7 bankruptcy can access it. It involves a calculation of the debtor’s average monthly income over the six months leading up to the bankruptcy filing and comparing it to the median income for a household of the same size in Maryland.

Here’s how the means test works:

Calculation of Current Monthly Income

The debtor’s average monthly income is calculated by adding up all sources of income received in the six months before the bankruptcy filing and dividing it by six.

Comparing to Median Income

The calculated average monthly income is then compared to the median income for a household of the same size in Maryland. The median income figures are regularly updated and can be obtained from official sources or bankruptcy websites.

If Below Median Income

If the debtor’s average monthly income is below the median income for Maryland, they automatically pass the means test and can proceed with a Chapter 7 bankruptcy filing without any further calculations.

If Above Median Income

If the debtor’s average monthly income is above the median income for Maryland, further calculations are required to determine eligibility. Specific deductions and allowances are applied to the debtor’s income to determine their disposable income.

Disposable Income

The disposable income is the amount left over after deducting certain allowed expenses and necessary payments (like taxes and secured debt payments) from the debtor’s average monthly income. If the calculated disposable income falls below a certain threshold, the debtor may still qualify for Chapter 7. Otherwise, they might be required to file for Chapter 13 bankruptcy, which involves a repayment plan.


It’s essential to note that the means test can be a complex calculation, and minor errors or inaccuracies may affect the outcome. Therefore, seeking the guidance of an experienced bankruptcy attorney in Maryland is highly recommended. A skilled lawyer can help you accurately complete the means test, assess your eligibility for Chapter 7 bankruptcy, and guide you through the entire bankruptcy process.


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