Means Testing

The bankruptcy "means test" only applies to persons whose annual household income exceeds their states' median income. In Minnesota, the median income figures established by the Census Bureau, for use in bankruptcy cases filed on or after April 1, 2019, are as follows:

Household Size & Median Income

  • One Person Household: $58,443

  • Two Person Household: $76,398

  • Three Person Household: $94,312

  • Four Person Household: $111,878

* Add $9,000 for each person in excess of four.

Unfortunately, determining your "household size" is not always that simple. We can help you with that potential issue as part of our consultation process.

Even if your household income exceeds the median income figures, the Bankruptcy Reform Act still allows you to file chapter 7 if you pass the means test. The means test compares your household income to your household living expenses, using a combination of your actual living expenses and living expenses approved by the Census Bureau for things like food, clothing, transportation and other common household expenditures. Most folks struggling with debt pass the means test.

Keep in mind that "income" includes any monetary income, whether from wages, bonuses, business income, gifts of money, side jobs, or any other money received.  Often it includes the income of a non-filing spouse or significant other. It does not include funds you receive from loans. It is important to note that under the bankruptcy law, annual income is calculated by taking your last six months income and multiplying it by two.  This may lead to odd results for those recently experiencing a change in income or for those who work seasonally. We can work with you to help you understand these laws and help you determine when would be the best time to file your case.