QIM 34 | Bankruptcy | Caffeine Law

What the Means Test Is

Congress built the means test (11 U.S.C. § 707(b)) to channel higher-income filers toward repayment. It starts by comparing your household's income to the California median income for your family size. If you're at or below the median, you presumptively qualify for Chapter 7 — full stop. A large share of filers clear it on this first step alone.

If You're Over the Median

Earning above the median does not end the conversation. The test then subtracts allowed living expenses and certain debt payments to calculate your 'disposable income.' Many people who look high-income on paper have little left after a mortgage, childcare, and debt service — and still qualify. If you don't, Chapter 13 is usually the path.

Why the Math Is Tricky

The income side uses a specific six-month lookback, and the expense side uses a mix of local standards and your actual costs. Small classification choices — which expenses count, how recent income is measured — can flip the result. That's why the means test is run carefully rather than guessed at.

What to Do

Don't rule out Chapter 7 because you think you earn too much — most people are wrong about that. A Caffeine Law consultation runs the means test on your real numbers and tells you which chapter fits.

Caffeine Law — consultation | Michael Benavides, Esq., CA Bar No. 270714 | 707-362-4166 | attorneymichaelbenavides.com

ATTORNEY ADVERTISING. Caffeine Law is a trade name of the law practice of Michael Benavides, Esq., California State Bar No. 270714. General information only — not legal advice, and no attorney-client relationship is formed by reading this. Bankruptcy outcomes depend on your specific facts; exemption amounts, the median-income figures, and deadlines change, so verify current numbers. Prior results do not guarantee a similar outcome.