A lot of people rule themselves out of Chapter 7 bankruptcy the moment they see a number on a paycheck, without ever learning how New York’s means test actually works. The test starts by comparing your average income over the past six months to the state median for your household size. If you fall under that line, you generally qualify for Chapter 7 outright. If you’re over it, the test moves to a second step that compares your remaining income with allowed expenses to determine what you could realistically repay.
A Long Island bankruptcy attorney can run these numbers with you before you file, since many people who assume they earn too much still qualify.
What Is the Bankruptcy Means Test?
The means test is a two-part calculation required under federal bankruptcy law to determine whether you qualify for Chapter 7. Its purpose is to reserve Chapter 7’s full debt discharge for people who genuinely cannot afford to repay their creditors, while directing higher earners with disposable income toward Chapter 13’s repayment plan instead. Most individual filers with primarily consumer debt (credit cards, medical bills, personal loans) must complete it. If your debts are mostly business-related, or you’re a qualifying disabled veteran whose debt arose during active duty, you may be exempt from the test entirely.
How Does New York’s Median Income Threshold Work?
The first step compares your average monthly income over the six full calendar months before you file, doubled to estimate an annual figure, against New York’s median income for your household size. For cases filed on or after April 1, 2026, the threshold is $73,272 for a single filer, $92,902 for a household of two, $115,579 for a household of three, $139,040 for a household of four, with $11,100 added for each additional household member.
If your income falls at or below the applicable median income for your household size, you generally qualify to proceed under Chapter 7 without completing the second disposable income calculation.
What Happens If Your Income Is Above the Median?
Being above the median doesn’t end your Chapter 7 case. It only means you move to the second part of the test, where you subtract allowed living expenses from your income to find your true disposable income over a five-year period. Many allowable expenses are based on IRS National and Local Standards, while others are based on your actual expenses if they are permitted under the Bankruptcy Code, such as certain secured debt payments, taxes, and domestic support obligations.
Many people who earn well above New York’s median still fall short of this second step once debt payments and household expenses are factored in.
What Are the Income Limits Once Expenses Are Deducted?
After the allowable deductions are applied, federal law compares your disposable income to statutory thresholds that determine whether a presumption of abuse arises. For cases filed between April 1, 2025 and March 31, 2028, if that amount totals less than $9,075 over 60 months, there’s no presumption of abuse, and you pass. If it totals more than $15,150, the law presumes you can afford to repay creditors, and Chapter 7 is generally unavailable. Between those two figures, you still pass if the amount wouldn’t cover at least 25 percent of your nonpriority unsecured debt over five years.
Does Social Security Count as Income?
Although many forms of income are included in the means test calculation, Social Security benefits generally are not counted as current monthly income for Chapter 7 eligibility purposes. Other income sources, including wages, bonuses, rental income, and many regular household contributions, usually are included.
What If You Don’t Pass the Means Test?
Failing the means test doesn’t mean you’re without options. It typically means Chapter 13 is the better fit: a court-approved plan that reorganizes your debt into affordable payments over three to five years while stopping collection calls, garnishments, and foreclosure through the automatic stay. Some filers also find that timing matters, since the six-month lookback period means a recent drop in income, such as a job loss, can bring your average below the median in a few months.
Get Help Understanding Your Bankruptcy Options in New York
The means test involves detailed calculations that are easy to get wrong without guidance, and a mistake can delay your case or jeopardize your discharge. At Robert H. Solomon, PC, we review your income, expenses, and household size to determine which chapter fits your situation and give you a clear picture before you file. Contact Robert H. Solomon, PC today to schedule a free consultation.