The following appears at the top of the Means Test
There are eight parts to the means test.
Part I is directed at military personnel and those whose debt is not primarily consumer debt.
Part II is a declaration of ALL income.
Part III analyzes the income by figuring the average monthly income and comparing it against the median income for your state and household level. It is the first determination of whether presumption arises or not.
If you meet that level or are under it at this point you can check the assumption does not arise and file the Chapter 7 bankruptcy. You will need to proceed to Part VIII which is your signature and date.
If you are above the median income you need to continue with Part IV if applicable to you. This is a marital adjustment for those who file separately from their spouse.
Part V is a 4 part calculation of deductions.
Part VI is the next point of calculating presumption of abuse. It takes the total income arrived at in Part II and subtracts the deductions from Part V. That amount is then multiplied by the 60 months of a chapter 13 bankruptcy.
This is to calculate how much disposable income you will have in that 5 year period. If your amount is $7025.00 or less your presumption does not arise. Chapter 7 is still a possibility.
If this amount is more than $11,725.00 then the presumption arises and you must check that box at the top that says the presumption arises.
You also have the opportunity to fill out Part VII which is a claim to more expenses than what has been listed if this applies in your case. Part VIII is where you sign and date the document.
For those that the figure is higher than $7025. but lower than $11,725 there is one more additional calculation in part VI.
It asks for the total of your non priority debt. (The debt that is unsecured). You then figure out what 1/4 of that debt is. You will then compare it to the figure you obtained in the upper Part VI.
If your 5 year calculation of disposable income is less than that 1/4 calculation of your total debt then again the presumption does not arise. If you end up with more income than debt at this level then the presumption does arise.
That is the final calculation. All must sign the document in Part VIII at this point.
You may at this point be totally confused by the sound of all this calculating. To see what you will be getting yourself into and help clarify all this information visit US Courts/Means Test
If after filing out the means test and submitting it to your trustee you do fall at the right level you can petition for the Chapter 7 bankruptcy but it is helpful to know that approximately 2 months after your bankruptcy file date the 341 Meeting is scheduled.
If you did not qualify for the Chapter 7 then you will be working out a payment plan to submit to court for a Chapter 13.
At the 341 meeting or any time during the bankruptcy the trustee in your bankruptcy case will then be reviewing the paperwork submitted and your current circumstances. You may be asked to submit any new pay stubs for employment or any other documentation they request.
The last 60 days of income is reviewed and if that time it possibly shows any increase in pay and can be determined that if you fall above the median income at that time then the presumption once again can rise and you will be expected to move your case to chapter 13 or risk a motion for dismissal.
Having this knowledge of what presumption of abuse means and what is figured out in this test can help in your preparation of considering bankruptcy and takes some of the mystery out of it.
The state median income level for all states can be found here. Note you will need an excel spreadsheet file to view. Another free option is openoffice.com which offers free software comparable to microsoft products.