Don’t Let The Means Test Scare You Off

In 2005, Congress passed a law requiring a “means test” that is automatically applied to anyone filing for Chapter 7 bankruptcy. Prior to this drastic change, it was a lot easier to show you couldn’t afford to pay your creditors and get a discharge. After 2005, debtors must go through a complicated test to see whether “presumption of abuse” arises or whether “presumption of abuse does not arise,” which means whether you can file Chapter 7, or whether a Chapter 13 reorganization is required.

Most often we can help our clients pass the test and file Chapter 7. At BransonLaw, we have been dealing with this law since 2005, and we can help you make sure you use all of the allowable expenses and accurately calculate your income. If you have concerns about the means test, let us help guide you. We have the knowledge that might help you find a path to Chapter 7. We can also assist you with a Chapter 13, which is a path to relief as well, albeit a longer one. Chapter 13 isn’t as scary as many people believe it to be.

What The Means Test Actually Does

The means test is one that non-business debtors must complete. Essentially, it is a formula used to determine who qualifies for a specific type of bankruptcy: either a Chapter 7 liquidation or, more commonly, a reorganization under Chapter 13.

The means test looks back at the six months before you file, averages that income, and then “annualizes” it to see where you fall in relation to Florida’s median income. The law was designed to prevent the bankruptcy process from being abused. It isn’t so much a test that you can “pass” or “fail.” It’s more about determining whether you have “disposable” income to pay a portion of your debts, based on the criteria in the test. Most often, those who don’t pass the test do have money left over after filing bankruptcy and stopping all of their debt payments.

Understanding Household Size And The Reality of Rising Costs

Currently, these are the numbers as of November 1, 2025 for Florida:

At times, determining how many people are in your household can be complicated if there are individuals who live with you who aren’t your spouse or minor children. Choosing who must be used in the household size calculation, and any associated income, can be important. After confirming the household size, the test turns to allowable expenses.

If your income is below the state median in Florida based on your household size, you immediately show “presumption does not arise,” and you are not required to complete the rest of the means test.

However, those who don’t automatically show presumption doesn’t arise may still not feel that they have adequate “disposable” income. High earners are still struggling with high living costs. They struggle to make life work because the costs of goods, housing, and other expenses have accelerated more rapidly than their income.

This is why people are often concerned about the test. We have more than 20 years of experience helping clients qualify for Chapter 7 bankruptcy. We identify the special circumstances and real-world expenses that can make the means test reflect your actual situation.

Don’t Panic If You Have To Do A Chapter 13

We often speak with clients who adamantly don’t want to file a Chapter 13 bankruptcy, when it’s often a good solution. If you have to do a Chapter 13 bankruptcy, we’ll help you. There are many myths out there about Chapter 13, such as that you can’t buy a car, or you can’t buy a house, or rebuild your credit in Chapter 13. Well, that isn’t true. You can still rebuild your finances in a Chapter 13. You can obtain loans and purchase a car or a home in Chapter 13. You just need to get court or trustee approval. We help our clients obtain these approvals. In Chapter 13, payments are based on disposable income, which is basically what you have left over after necessary expenses for you and your dependents. We can help you develop a manageable plan.

Business Debtors Are Exempt From The Means Test

If you are a business debtor, meaning 51% or more of your debt comes from business activity, you don’t have to take the means test. Through the lens of our nearly 20 years of experience, we can help you see whether your case qualifies as a business case. You would be surprised how often this is overlooked. If you need bankruptcy relief and are a small business owner, we can help you bypass the complicated means test.

If you don’t qualify as a business debtor, we will make sure other types of income that are not required to be used are excluded, such as Social Security benefits and certain military income, including military disability income.

But retirement income, such as pension payments, is generally included in the analysis even though pension accounts themselves are exempt from creditors. As we’ve mentioned throughout this blog, the means test is complicated.

What is even more surprising is that some types of income that will not likely reoccur, such as real estate sales proceeds and personal injury settlements, must be included. We can help ensure presumptions that arise based on these types of income that result in a “presumption” are overcome.

Experience Matters

BransonLaw has been handling the means test since the 2005 law went into effect — nearly 20 years of practical experience with the numbers, updates, and exceptions. We pay attention to what the United States Trustee’s Office, which oversees these cases, agrees to allow in the test. We focus on identifying how the law applies to your case, understanding the relevant exceptions, and guiding you on how to move forward. Most importantly, we advocate for the best outcome for you.

Bankruptcy is a serious matter; it provides substantial relief to so many but can be complicated. We have the depth of experience to guide you through the process. Although we cannot guarantee the outcome of your case, we will assess your situation and determine what is in your best interest.

By taking proactive steps now, you can ensure you have access to the debt relief you need. Don’t wait until it’s too late—start the process today to secure a more stable financial situation tomorrow.

We are located in Orlando, Florida, and handle bankruptcy cases throughout the State of Florida. Contact us today if you live in, own property in, or operate a business in Florida and are unable to manage your debt. We can help you understand your options. Our goal is to help you so you can sleep at night.