When you submit your petition for Chapter 7 bankruptcy, you typically must supplement it with Form 122A, Chapter 7 Statement of Your Current Monthly Income. This form essentially proves that you pass the imposed means test and are thereby eligible to proceed with a bankruptcy case. Without further introduction, please read on to discover what happens if you cannot pass the means test and how a seasoned Louisville, Kentucky Chapter 7 bankruptcy lawyer at Schwartz Bankruptcy Law Center can help improve your eligibility.

How does the means test apply to Chapter 7 bankruptcy?

In short, a means test indicates that your average monthly income falls below the median income for families of your same size in your state of residence. In falling below this threshold, you are basically stating that you cannot afford to pay off your outstanding debts on your own, but rather require the financial relief options afforded by a Chapter 7 bankruptcy case. That said, in the state of Kentucky for the year 2025, the median annual incomes are as follows:

  • For a household of one: $57,764 per year.
  • For a household of two: $69,371 per year.
  • For a household of three: $84,183 per year.
  • For a household of four or more: $105,955 per year plus $11,100 per additional household member.

What happens if I cannot pass the means test for a Chapter 7 bankruptcy filing?

It is worth mentioning that the Kentucky bankruptcy court will consider all income sources when analyzing your median income, including your tips, bonuses, and more. Also, the court may only look back at your monthly income in the six months immediately before your bankruptcy filing, then multiply this number by two to get your annual income. And so, this may not necessarily work in your favor if you did considerably well in the past six months compared to the months before that.

All of this to say, it is very possible that you may not automatically pass the Chapter 7 means test. If so, you may have to fill out and file Form 122A-2, Chapter 7 Means Test Calculation. This allows you to deduct allowable expenses and debts from the total so that you may hopefully fall below the state’s median income. Examples of such allowable deductions include mortgage and car payments, overdue taxes, court-ordered payments, necessary child care services, and more.

You may also be exempt from the means test requirement in Kentucky if your debts are not primarily consumer debts. Or, more specifically, if you are a disabled veteran who incurred your debt primarily during active duty or homeland defense. If none of these exceptions apply to you, though, you may have no other choice but to file for Chapter 13 bankruptcy instead.

If you need help with executing this, do not be afraid to reach out to a competent Louisville, Kentucky consumer bankruptcy lawyer. Our team at Schwartz Bankruptcy Law Center is more than capable and eager to assist you with your legal proceedings.