Navigating the means test is one of the most intimidating and complex parts of filing a bankruptcy petition. Debtors must complete the means test to see if they qualify to file under Chapter 7 or have to file under Chapter 13.
The means test involves calculating one’s income and, if that income is above the median income for the debtor’s household size, then the debtor can deduct certain expenses from his income to see if he can get his income under the Chapter 7 income limits.
Among the expenses that debtors may deduct on the Chapter 7 means test are:
- Food and clothing
- Out-of-pocket health care expenses
- Non-mortgage housing expenses
- Mortgage or rent
- Utilities
- Vehicle operation or public transport
- Vehicle ownership
- Taxes
- Involuntary deductions for employment, such as union dues
- Life insurance
- Court-ordered payments
- Education for employment
- Health care
- Telecommunication
Keep in mind that this is not an exhaustive list. There are additional expenses that may be deducted. You should consult an attorney if you have any questions as to whether or not you qualify for Chapter 7 bankruptcy.