What is the means test?

It is a mathematical formula that compares your average gross income over the past 6 months to the median income for your household size in your state. It determines whether you qualify for Chapter 7.

What if my income is above the Arizona median?

You may still qualify. Above-median filers subtract allowed expenses from their income. If the remaining disposable income is low enough, the presumption of abuse does not arise and Chapter 7 remains available.

Does Social Security count as income?

No. Social Security benefits are excluded from the means test calculation entirely. This means many retirees whose primary income is Social Security pass the means test easily.

Can I time my filing to pass the means test?

Potentially. The means test uses a 6-month lookback. If you recently lost a job or had a pay cut, waiting until the lower-income months are included in the calculation period may improve your eligibility.

Topic guideUpdated 2026-02-27

Arizona Bankruptcy Means Test — Do You Qualify

How the means test works — income calculation, the 6-month lookback, expense deductions, and strategies for qualifying.

The means test is the primary eligibility screen for Chapter 7 bankruptcy §11 U.S.C. § 707(b). It compares your household income to the median income for a household of your size in Arizona. If you fall below the median, you generally qualify for Chapter 7. If above, a more detailed analysis determines eligibility.

How the means test works

Calculate current monthly income (CMI)

CMI is your average gross income over the 6 calendar months before filing — not your income in the month you file. It includes wages, self-employment income, rental income, pension, and most other regular income sources. Social Security benefits are excluded.

Compare to Arizona median

If your annualized CMI is below the median for your household size, you pass the means test and can file Chapter 7. Arizona median income figures are updated annually by the U.S. Trustee Program.

Above-median analysis

If your income exceeds the median, you subtract allowed expenses (IRS standards for housing, transportation, food, plus actual secured debt payments) from your CMI. If the remaining disposable income is low enough, you can still qualify.

Presumption of abuse

If the calculation shows you have enough disposable income to repay a significant portion of your unsecured debt, a "presumption of abuse" arises, and your case may be dismissed or converted to Chapter 13.

What counts as income for the means test

Wages, salary, tips, and bonuses
Self-employment income (net)
Rental income
Pension and retirement income (but not Social Security)
Unemployment compensation
Regular contributions from others for household expenses
Child support and alimony received

What is excluded from the means test

Social Security benefits
Payments to victims of war crimes or terrorism
Certain disability payments for veterans

Common means test strategies

Timing the filing to use a 6-month period when income was lower (e.g., after job loss or reduced hours)
Including all household members for a larger household size
Documenting actual expenses that exceed IRS standards (special medical needs, required work expenses)
Deducting secured debt payments (mortgage, car loan) on the expense side

💡The means test looks backward 6 months, not at your current income. If you recently lost a job or had income reduced, it may be strategic to wait so the lower income period is included in the calculation.

⚠The means test is a mathematical calculation with specific rules about what counts and what doesn't. Small errors in income or expense calculations can change the outcome. Work with an attorney who understands the current median income figures and allowable expense categories.

Prepare for Your Consultation

Quick checklist (Bankruptcy)

If there is a deadline (garnishment / foreclosure), include dates.

Recent pay stubs

and income info

Debt list

(cards, loans, balances)

Collection letters

or court papers

General preparation tips only. Eligibility and timing depend on facts.

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