## The bankruptcy means test in New York 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). ### New York median income (4-person family) Approximately $130,000. 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 New York 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. --- *This guide is general information about federal bankruptcy law and New York-specific median figures as of early 2026 and is not legal advice. Median figures update every 6 months. Talk to a licensed New York bankruptcy attorney about your specific situation.*