North Carolina bankruptcy means test compares debtor income to median family income (currently ~$104,000 for a family of 4). Below median = automatic Chapter 7 eligibility.
Published May 7, 2026
## The bankruptcy means test in North Carolina
The **means test** determines whether someone qualifies for Chapter 7 bankruptcy or must file Chapter 13. It was added by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).
### North Carolina median income (4-person family)
Approximately $104,000. Updated every 6 months. Adjusted by household size.
## Two-step test
**Step 1: Compare current monthly income to state median.**
- Current monthly income = average over 6 calendar months pre-filing × 12
- Includes nearly all sources (wages, self-employment, rental, dividend, child support received, unemployment in some cases)
- Excludes Social Security, public benefits in some cases, payments to crime / war victims
**If below state median = pass automatically. Chapter 7 available.**
**Step 2 (if above median): calculate disposable income.**
- Subtract allowed expenses (IRS National + Local Standards + actual amounts for some categories)
- Resulting number is "disposable income"
- If disposable income × 60 months > $9,075 (2024) — presumed abuse, Chapter 7 not available
- If disposable income × 60 months < $5,450 — Chapter 7 available
- Between $5,450 and $9,075 — additional analysis based on % of unsecured debt
## What counts as income
**Counted (in 6-month average × 12):**
- Wages and salary
- Bonuses and commissions
- Self-employment income
- Rental income
- Investment income
- Pension / retirement income
- Unemployment compensation
- Child support received
- Spouse's contribution (in some cases)
- Workers' comp
- Disability payments
- Annuity payments
**Excluded:**
- Social Security (excluded for means test purposes)
- Veterans' benefits
- Some payments to crime / war victims
## Allowed expenses (above-median filers)
**IRS National Standards (fixed):**
- Food / clothing / personal care
- Out-of-pocket healthcare
**IRS Local Standards (varies by region):**
- Housing + utilities
- Transportation (vehicle ownership + operation)
**Actual amounts (no cap or limited cap):**
- Federal / state / local taxes
- FICA
- Mandatory employment expenses (uniforms, tools)
- Health insurance / disability insurance
- Court-ordered payments (alimony, child support, criminal restitution)
- Education for handicapped child
- Childcare for work
- Communication costs (limited cellphone)
- Charitable contributions (up to 15% of gross income)
- Continued contributions to retirement (varies by court)
- Mortgage / rent / car payments (secured debt)
- Childcare costs
- Family member care for elderly / chronically ill
## Special circumstances
Even if you fail the means test, you can still get Chapter 7 by showing **special circumstances**:
- Serious medical condition
- Active duty military / disabled veteran
- Recent unemployment / income reduction (use post-filing realistic numbers)
- Other unusual factors that justify higher expenses
Special circumstances must be documented and proved.
## Means test in Chapter 13
Even Chapter 13 filers complete the means test:
- **Below median income** → 3-year plan minimum
- **At or above median** → 5-year plan required
## Disabled veterans + military exception
Disabled veterans (with debt incurred during active duty) and active-duty military members are largely **exempt** from the means test entirely.
## Common manipulation
Bankruptcy trustees scrutinize:
- **Recent income changes** — sudden raises before filing
- **Voluntary expense increases** — bigger house / car right before filing
- **Asset transfers** — moving assets to family / friends
- **Excess household members** — claiming roommates as dependents
- **Tax over-withholding** — getting income out via refunds
- **Inflated expenses** — claiming amounts above actual
Bankruptcy fraud carries criminal penalties.
## Form 122A-1 / 122A-2 / 122C-1 / 122C-2
The means test is completed on official forms:
- **122A-1** = Chapter 7 statement of current monthly income
- **122A-2** = Chapter 7 means test calculation (if above median)
- **122C-1** = Chapter 13 income
- **122C-2** = Chapter 13 disposable income calculation
## What you should do
Run the means test BEFORE filing. Most North Carolina bankruptcy attorneys offer free initial consultations and can quickly tell you whether Chapter 7 is realistic. Many use specialized bankruptcy software (e.g., Best Case, NextChapter) to run the calculations precisely. Don't try to file Chapter 7 yourself if you're close to the median — the calculations are technical and trustees may challenge incorrect filings.
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*This guide is general information about federal bankruptcy law and North Carolina-specific median figures as of early 2026 and is not legal advice. Median figures update every 6 months. Talk to a licensed North Carolina bankruptcy attorney about your specific situation.*
This guide is for general information only and does not constitute legal advice. Laws change and outcomes depend on your specific situation — talk to a licensed attorney before acting on anything you read here.