What Does a Means Test in a Bankruptcy Mean in Tennessee?

What does a means test in a bankruptcy mean in Tennessee? In 2026, the bankruptcy means test involves a calculation to determine if those with primarily consumer debts qualify for Chapter 7 bankruptcy without a presumption of abuse of the code and also sets the amount for any Chapter 13 plan repayment. The means test takes household income, number of dependents, and allowed expenses into account.

Why Choose Kerney Law Firm?

Here at Kerney Law Firm, our attorneys assist individuals and families from Gallatin and other communities throughout Middle Tennessee. Attorney Kerney grew up in Gallatin and returned to his hometown after practicing law in Nashville. We focus exclusively on bankruptcy and can help clients with consumer debt through the bankruptcy process.

Why Does Bankruptcy Have a Means Test?

American bankruptcy filings keep rising. In the 12-month period ending June 30, 2026, there were 608,816 bankruptcy filings across the United States. That is an increase of 12.2% from the previous year. Of those filings, 382,161 were Chapter 7 cases. An additional 215,490 cases were filed under Chapter 13.

Congress implemented the current bankruptcy means test by way of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Essentially, the means test aims to flag Chapter 7 filings where the debtor has sufficient ongoing income, often called disposable income, to cover at least a portion of their outstanding debts.

If you fail the means test salary comparison, it does not necessarily mean you are barred from bankruptcy. There are additional calculations that could impact your particular bankruptcy case. Other financial concerns that may affect your options include Bankruptcy & Divorce, Credit Card Debt, Credit Counseling, and Debt Collection Harassment.

Income Used for the Means Test

Under federal bankruptcy law, the means test starts with what’s called current monthly income. Current monthly income is actually measured by looking at the past. For purposes of the means test calculation, it generally refers to income received during the six full calendar months before filing for bankruptcy, not necessarily the income the debtor is receiving in the month of the bankruptcy filing.

Even if your income fluctuated over those six months, perhaps due to job changes, the means test still calculates an average. Many types of income count toward this calculation, including those listed below:

• Wages
• Salary
• Bonuses
• Business income
• Rental income

Federal law excludes some types of payments from current monthly income, like Social Security benefits and reparations paid to victims of war crimes, terrorism, or other specified crimes. If a family contribution is irregular, it may also not be counted.

The six-month lookback period for determining current monthly income can make timing a bankruptcy filing important. If you were recently laid off or had a major increase in income because of overtime, your means test calculation might be far higher than what you’re actually earning now. Depending on your circumstances, you may also want to explore Medical Debt Bankruptcy or options to Stop Foreclosure.

Income Limits

Income limits for the means test change often, typically every year to keep up with the changing cost of living. If your annualized current monthly income is less than the median income for your state and household size, you don’t need to complete the rest of the means test. You may likely then qualify for Chapter 7 bankruptcy. If it is more, you need to continue with the means test.

Because the means test income limits are updated periodically, use the numbers that apply on the date you file your case. Your bankruptcy case may be managed by the U.S. Bankruptcy Court for the Middle District of Tennessee, at 701 Broadway, Room 170, Nashville, TN 37203. A qualified bankruptcy exemption lawyer can provide ideal legal advice no matter what your situation may be.

Hire a Bankruptcy Lawyer for Legal Guidance

When you hire a bankruptcy lawyer to help determine what income is included, they can confirm that the household size is correct, double-check that the figure allows for deductions, and finalize the required means-test forms. A Tennessee bankruptcy attorney can also investigate unusual earnings, such as bonuses, commissions, freelance income, or contributions from housemates, that might complicate the calculation.

Once the calculation is finished, your Tennessee bankruptcy lawyer is then equipped to weigh Chapter 7 against Chapter 13 and determine if specific conditions exist to overcome a presumption of abuse. Your attorney can help you avoid making common mistakes and explain the means test laws to you to help you understand your options.

FAQs

Does My Spouse’s Income Count if Only I File for Bankruptcy?

The income of a spouse who does not file bankruptcy may need to be included on a married debtor’s means test if they reside together in the same household. Deductions are allowed, though, to the extent that the non-filing spouse’s income is applied toward expenses not incurred for the benefit of the debtor or the marital household. This is referred to as the marital adjustment.

Can I File Chapter 7 if I Fail the Means Test?

Failing the means test, which suggests abuse, doesn’t automatically bar you from filing for Chapter 7 bankruptcy. Debtors can rebut the presumption by showing special circumstances that cause additional expenses or allow for allowances or income adjustments that they have no practical ability to change. The debtor may want to consider filing Chapter 13 instead or possibly suggest delaying a filing if recent changes to income would alter the means-test calculation.

Can I Retake the Means Test if My Financial Situation Changes?

No, you may not retake the means test if your financial situation changes. Means-test figures are tied to a specific bankruptcy filing and are based on income received during a fixed period prior to filing. Therefore, it is recommended that you file at the time that most accurately reflects your situation and ability to pay, taking the six-month lookback period into consideration.

What Documents Do I Need to Complete a Bankruptcy Means Test?

Possible documentation to complete a means test includes pay stubs, bonus/commission records, business income documentation, records of any benefits received, and documentation of monetary contributions from other household members.

You should also back up any expenses you claim on the means test with documentation. It’s generally a good idea to compile a few months of detailed financial records before filing, as this information may be needed for the means test and other bankruptcy forms.

Connect With a Local Tennessee Bankruptcy Attorney

Kerney Law Firm understands bankruptcy laws and processes, including the means test. We can provide clarity for you and help you through this process. Contact us to get started.