What is the means test for Newark filers?

The means test compares your household income to the New Jersey median to determine Chapter 7 eligibility. If below the median, you automatically qualify.

Does Social Security count on the means test?

No. Social Security benefits are excluded from the means test calculation under federal law.

Bankruptcy Means Test in Newark

The means test determines whether you qualify for Chapter 7 bankruptcy. It compares your household income to the New Jersey median.

How It Works

The means test has two parts:

Income comparison: Add your household gross income for the 6 months before filing and annualize it. If the result is below the New Jersey median for your household size, you pass and qualify for Chapter 7.
Expense deductions: If your income exceeds the median, you deduct IRS-allowed expenses plus actual secured debt payments. If your remaining monthly disposable income is below $92.50, you still qualify.

What Counts as Income?

Wages, salary, tips, overtime
Business income (net)
Rental income
Pension and retirement distributions
Unemployment compensation
Interest, dividends

Excluded: Social Security benefits are not counted on the means test under 11 U.S.C. section 101(10A).

What If I Fail?

File Chapter 13 -- No income limit for Chapter 13
Wait and refile -- If income was temporarily high (bonus, overtime)
Special circumstances -- Military service, serious illness, or caretaking may provide exceptions

Check Your Eligibility

Use the free 1328(f) screener to check whether a prior discharge affects your eligibility, or the means test tool for income-based eligibility.

Free Discharge Screener

Frequently Asked Questions

What is the means test?

The means test compares your household income to the New Jersey median. If below, you qualify for Chapter 7 automatically. If above, you may still qualify after deducting allowed expenses. Learn more.

Does Social Security count?

No. Social Security benefits are excluded from the means test under 11 U.S.C. section 101(10A).

Do I include my spouse's income?

If married and filing individually, you must include your spouse's income unless legally separated, but you can deduct their separate expenses.