If you want to file for Chapter 7 bankruptcy, you must first undergo and pass a means test. What does a means test assess?


●        Income

●        Expenses

●        Debts


The test determines whether you are able to pay back your debt. If so, you won't be allowed to follow through with Chapter 7 bankruptcy. Instead, you may have the option of filing Chapter 13 bankruptcy.

What is the Objective of a Means Test?

The main objective of the means test is to require you to pay back some or all of your debt in Chapter 13 bankruptcy instead of Chapter 7 bankruptcy if you earn a certain level of income. In Chapter 7 bankruptcy, you may lose property you can't protect with an exemption. However,  you may not have to repay any debt. The means test determines which bankruptcy you are eligible for.

The Means Test Process

To take the means test, you compare your previous six-month income prior to bankruptcy to the median income in Minnesota.


●        If your income is less than the median, you have passed the means test and are eligible to file for Chapter 7 bankruptcy.

●        If your income exceeds the median, you must determine whether you would have enough income to repay your debt after your living expenses.


Let’s explore your income and your expenses a little further:

●      Your Income vs. the Median Income

You will compare your monthly income to the median income in your state according to your household size. If your income is less than the median, you may use Chapter 7. If it is not, you may do some more calculations to figure out whether you are eligible for a Chapter 13 bankruptcy or another option.

●      Expenses and Required Payments

If your income exceeds the state median, then you move to the next portion of the means test.


You will figure out whether you would have enough disposable income left living expenses to pay off your unsecured debts.


If your disposable income is equal to our more than a minimum amount set by Minnesota law, you will not be allowed to file for Chapter 7 Bankruptcy. If you still want to file for bankruptcy, you may be eligible to file for Chapter 13 bankruptcy. You may also have to adhere to a five-year repayment plan under a Chapter 13 bankruptcy.

Hiring a Chapter 7 Bankruptcy Lawyer in Minneapolis

Regardless of what type of bankruptcy you are eligible for, a bankruptcy lawyer can represent you throughout the entire process to strengthen your case and help reduce your losses. We can meet with you to go over details of your current financial portfolio to determine all of your expenses, debt, and income, and maximize your potential to win your case.

Schedule a Free Consultation with Ron Lundquist Today

If you are considering bankruptcy as a way to relieve your personal or business debt, then contact Ron Lundquist. Our law firm provides legal services to help individuals, families, and businesses get the fresh starts they need by eliminating their debts. Our goal is to give you the legal leverage you need to reduce debt while keeping your assets.


To schedule a free, no-obligation consultation with our bankruptcy law firm in Minneapolis, Minnesota, contact us today at 651-454-0007.