The Bankruptcy Means Test in Miami

Arturo R. Alfonso P.A. prepares the means test for Miami-Dade individuals and couples, in English and Spanish, as part of every consumer bankruptcy case the firm files in the U.S. Bankruptcy Court for the Southern District of Florida. This page explains how we work through it: which months count, which income goes in, which forms are filed, and what the U.S. Trustee does with the result after the case is filed.

The current Florida median income figures and the basic two-step test are covered in our guide Do I qualify for Chapter 7 in Florida? This page does not repeat them; it follows the calculation the way we prepare it for a real case.

Step 1: Fixing the Six-Month Window

The means test is federal law, set out in 11 U.S.C. section 707(b), and it starts from your “current monthly income.” Under 11 U.S.C. section 101(10A), that is the average monthly income you received during the six months ending on the last day of the calendar month before the case is filed. The filing date therefore decides which six months count. If your income recently changed, because of a job loss, a new job, or overtime that has ended, we map each month on a calendar with you before choosing a filing date, so you know exactly which pay periods fall inside the window.

Step 2: Counting the Income That Goes In

The definition is broad. It counts income from all sources whether or not it is taxable: wages, overtime, commissions, business or rental income, unemployment, pension, and support you receive. It also counts any amount another person pays on a regular basis toward the household expenses of you or your dependents, such as a relative who covers part of the rent. If you are married and filing alone, the form also asks about your spouse’s income, with an adjustment for the part that is not used for the household.

Some income stays out. Section 101(10A) excludes Social Security benefits, payments to victims of war crimes or terrorism on account of that status, and certain military disability and death benefits. We go through each deposit in your bank statements with you, because an unexplained transfer is a question the trustee will ask anyway.

Step 3: Whether the Test Applies at All

Before running numbers, we confirm the test applies. Section 707(b)(1) reaches Chapter 7 cases of individuals whose debts are primarily consumer debts, so a filer whose debts are mostly from a business may fall outside it. Section 707(b)(2)(D) also sets the means test aside for certain disabled veterans and for certain reservists and National Guard members called to active duty or homeland defense activity after September 11, 2001. If one of these applies, we document it on the form.

Step 4: Preparing the Forms

The U.S. Trustee Program states that Chapter 7 filers use Official Forms 122A-1, 122A-1Supp, and 122A-2, and Chapter 13 filers use Forms 122C-1 and 122C-2. Section 707(b)(2)(C) requires the filing to show how each amount is calculated. Form 122A-1 compares your annualized income with the Florida median for your household size. If you are at or below the median, the calculation generally stops there, and section 707(b)(7) bars any party from filing a motion to dismiss based on the means-test presumption.

If you are above the median, we complete Form 122A-2. It subtracts allowed expenses, including IRS national and local standards, secured debt payments such as a mortgage or car loan, taxes, and court-ordered support. The U.S. Trustee Program publishes the expense figures and updates them periodically, and we use the tables in effect on your filing date. Under section 707(b)(2)(A)(i), if the income left over, multiplied by 60, reaches the thresholds in the statute, the court presumes the case is an abuse of Chapter 7.

A presumption can be rebutted only by special circumstances, such as a serious medical condition or a call to active duty, that justify an added expense or income adjustment with no reasonable alternative. Section 707(b)(2)(B) requires each one to be itemized, documented, and explained in detail, so we gather the records before filing rather than after an objection.

Step 5: After the Case Is Filed

Your schedules and the means test forms are reviewed by the U.S. Trustee. Under 11 U.S.C. section 704(b), no later than 10 days after the meeting of creditors, held by Zoom in the Southern District, the U.S. Trustee files a statement on whether the case is presumed to be an abuse, and the court sends it to creditors within 5 days of receiving it. When an above-median case is presumed abusive, the U.S. Trustee has 30 days after that statement to move to dismiss or convert, or to explain why no motion is appropriate. Even without a presumption, section 707(b)(3) lets the court consider bad faith or the totality of your financial circumstances. Attorney Alfonso attends the meeting with you and answers the trustee’s income questions with the records we used.

When the Result Points to Chapter 13

The same income figure matters in Chapter 13. Under 11 U.S.C. section 1325(b)(4), a filer at or above the median has an applicable commitment period of not less than five years, unless the plan pays all allowed unsecured claims in full over a shorter period. Our page on Chapter 13 in Miami follows that case stage by stage. Whichever chapter fits, what you may keep is a separate question of Florida law: residents use the Florida exemptions, not the federal ones (Section 222.20, Florida Statutes), described in our guide to Florida’s bankruptcy exemptions.

What to Send Us Before the Consultation

• Pay stubs or income records for every pay period in the last six full calendar months, plus the current month.
• Bank statements for the same months, for every account you use.
• Records of any side, rental, unemployment, pension, or support income, and any regular help from family toward household bills.
• Your most recent federal tax return, and a note of who lives in your household.
• Mortgage, car loan, health insurance, childcare, and support order statements, and any medical or military records that affect your expenses.

Our checklist of documents needed to file bankruptcy has the full list, and our page on how a Chapter 7 case runs in Miami picks up after the means test.

Related Pages

• Bankruptcy Law in Miami
• Do I qualify for Chapter 7 in Florida?
• Chapter 7 Bankruptcy in Miami
• Chapter 13 Bankruptcy in Miami
• What is the difference between Chapter 7 and Chapter 13?
• How does a Chapter 13 repayment plan work?
• How much does it cost to file bankruptcy in Florida?