Even if you make too much money to automatically pass the Chapter 7 means test, you may still be able to qualify for Chapter 7 bankruptcy. This is because you can deduct certain expenses to help you reduce your disposable income on the means test. Below you can learn about various expenses and allowed deductions that may help you pass the means test.
(For more information on the means test, visit our Bankruptcy Means Test topic page.)
Expenses That Can Help You Pass Bankruptcy's Means Test
You can pass the Chapter 7 means test in three ways and financially qualify to wipe out debt in Chapter 7 bankruptcy. You’ll start by checking whether you’re exempt. If you’re not, you’ll determine whether your gross income is lower than bankruptcy income limits. If it is, you’ll pass the Chapter 7 means test. If it isn’t, you’ll move on to the most complicated portion of the means test, subtracting allowed expenses from your Chapter 7 income.
The Marital Adjustment Deduction on the Means Test
If you are filing for bankruptcy without your spouse, the marital adjustment deduction may help you qualify for Chapter 7 bankruptcy.