Here in Illinois, a married couple without children can make up to $84,000 and still qualify for Chapter 7 bankruptcy. Even a family of 4 can make $120,000 and still be qualified to file Chapter 7. That’s all because of the “Means Test.”
What Is the Bankruptcy Means Test & How Does It Work?
The Bankruptcy Means Test is a calculation that takes your average monthly income from the past 6 months and compares it to the median income for a same sized household in your state.
According to Cubit, the median income for households in Illinois in 2024 is $78,433. Even if you find yourself making more, your disposable income may be lower after deducting consumer debt obligations and monthly expenses such as rent, utilities, food, transportation, and childcare.
If you make less than the median income, you can file Chapter 7 bankruptcy without regard to the Means Test if your filing is not otherwise considered “abusive”. Don’t worry; if you are thinking of filing a case, your budget probably leaves nothing over from paycheck to paycheck. Your bankruptcy case won’t be an abuse.
You can check your eligibility by filling out the following means test forms:
- Form 122A-1: Chapter 7 Statement of Your Current Monthly Income
- Form 122A-2: Chapter 7 Means Test Calculation
- Form 122A-1Supp: Statement of Exemption from Presumption of Abuse Under § 707(b)(2)
What If I Don’t Pass the Means Test?
You can still qualify for alternative debt relief solutions if you don’t pass the means test for Chapter 7 bankruptcy, such as debt consolidation or debt settlement.
You can also file for Chapter 13 bankruptcy if you have regular income to make monthly payments. While in a repayment plan, creditors are legally prohibited from suing or garnishing wages.
At Lakelaw, we will help you analyze your finances. Our bankruptcy lawyers will calculate the allowances and deductions you are entitled to take under the Means Test calculation.
We will investigate whether there are special circumstances which allow you to overcome the presumption of abuse that arises if you want to file a bankruptcy case and make more than the median income cut-off points.
If it turns out that you must file for Chapter 13, we will do everything legally possible to minimize the payments you would have to make during your Chapter 13 repayment plan.
Safely & Confidently Navigate Bankruptcy with Lakelaw
If you are thinking about filing for bankruptcy, it’s probably because the pressure of credit card payments, garnishment, collection calls, and other creditor harassment is driving you crazy.
Don’t be afraid. We at Lakelaw will take care of you with the kindness, courtesy, respect, professionalism, and dedication that has been our hallmark since we were founded in 1999. If we need to go to bat for you in court, we will always represent you fearlessly and zealously. With close to 50 years of practice, we can speak truth to power on your behalf. And we will.