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Means Test Questions Answered


Why the Means Test Won’t Match the Rest of the Petition

We occasionally get asked “Why is it that when I draft a bankruptcy petition, that the disposable monthly income (DMI) shown on the Means Test doesn’t match the numbers listed elsewhere in the bankruptcy petition?”.  To understand this, let’s first examine what the Means Test is.

The Means Test is a form in the bankruptcy petition (form 22a in Chapter 7 Bankruptcy and form 22c in Chapter 13 bankruptcy) that is the petition driven component used to help the attorney representing the client determine whether the debtor filing bankruptcy qualifies to file a Chapter 7 bankruptcy, or whether they have the means to pay back some or all of their debt.
To determine this, the Means Test provides several fields where a debtor’s monthly income and expenses are to be listed, to see if the debtor’s income minus allowable expenses will allow them to qualify to file a Chapter 7, or whether they would need to file a Chapter 13.

Fortunately, as you complete other forms and schedules in the petition, the bankruptcy software does much of the work in the Means Test for you, by placing many of the expenses already listed in other areas of the petition, in the Means Test, but it doesn’t do everything for you, so completing the Means Test must be done manually.

This brings us to the first reason why the Means Test won’t match values reported elsewhere in the petition, which is that the Means Test requires a reporting of the debtor’s income for the last six full months…not just the very latest income pay stubs as is the case with income reporting on Schedule I.  Unless the debtor’s income is exactly the same on every single payday for the last six months (which is sometimes the case), there is no way these will match.

Another reason, is that when the debtor has Social Security (SSI ) income, this income when listed on Schedule I, is used to offset expenses listed on Schedule J, but on the Means Test, Social Security income is not calculated as income or means to repay debt.

The debtor’s actual expenses could also exceed allowable limits (e.g., $75 for telecommunications) for the jurisdiction they are filing in, so that only partial credit for the expense could be given on the Means Test.

The debtor could also be have discretionary expenses expenses that the Means Test does not allow for (e.g., cable/satellite TV).

You must also remember to be very careful when adding expenses to the Means Test that are listed on Schedules I and J.  For example, don’t forget the payroll taxes deducted from paychecks, and don’t forget to adjust these deductions from a non-monthly amount to a monthly amount.  For example, if the debtor is paid bi-weekly, the income tax deduction would need to be multiplied by the 26 pay days in a year, then divided by 12 months, to get a monthly equivalent to the bi-weekly amount.

You’ll also want to double-check your entries to make certain that no typos or other errors exist, and verify that nothing got omitted.  One example of an error that causes drastic issues in a petition, is selecting the wrong pay interval in Schedule I (e.g., selecting bi-weekly instead of semi-monthly).

In summary, don’t worry that the debtor’s disposable monthly income shown by Schedules I and J don’t match that shown by the Means Test, as it is extremely unlikely that they will.  Instead, focus on accuracy, and verify your work.

Have a prosperous week!


713 Training Team