DIY Bankruptcy Means Test — You Always Pass!

25 Oct DIY Bankruptcy Means Test — You Always Pass!

Sample_CalculationDo It Yourself projects can be terrifying — and satisfying too. Sprucing up your home on your own, repairing the car, even doing your own tax returns can be challenging but helps save you money and makes you more independent.

You have the option to do that in bankruptcy. You can go it alone. But most don’t — they just want to be informed consumers so they know what their options are before they see a lawyer. Buyer beware, right?

The “means test” is one of those things folks like to try before they see a lawyer. There are on-line services for this. And you know what all my prospective clients tell me — They always pass the means test!

The means test is designed to identify folks who can afford to pay a “meaningful” amount back to creditors in Chapter 13 instead of more immediate fresh starts in Chapter 7. It doesn’t really do that but that’s the idea.

But why does everyone seem to pass when they take it on their own? Because almost no one knows how to fill out the form! Even if you’re trying hard to do it right, many lawyers have trouble with it. How do you go wrong? Let me count the ways.

Income.You don’t earn what you think you earn. According to the test, you make the average of what you made during the last six months. When you earned it and when you were paid can affect this too. And it could count money spent for you but you didn’t even get.

Not Income. There are some kinds of income you count but others you don’t count. And there is some money that may or may not “count” depending on where you live.

Car Payments. You don’t pay what you think you pay for your car. The test recalculates it.

Car Expenses. You don’t spend what you think you spend on gas or maintenance. You get a different amount, good or bad.

Taxes. This is not what comes out of your paycheck. It’s what you should be paying, in the future. Even if you’re not sure what your tax return looks like next year.

Household Size. How many people are in your household? You’d think that would be the people you take care of and pay for. You might be right or you might be wrong. It likely depends on where you live.

Involuntary Deductions. You have to pay back the 401(k) loan, right? So it’s an “involuntary” deduction from your pay. Probably not.

And so on.

Those are only 7 common issues — 7 lines — from a form that is 7 pages long with 60 separate lines of calculations. Try as hard as you like, unless you do this often and keep up with the decisions of judges in your area and higher courts, you really will be guessing at most of the answers you should put into the form. Because you have to guess what the law is on the subject before you can answer the “simple” questions.

DIY Mean Tests teach my favorite (and most depressing) lesson about the law: “If you guess what the law says, and it works out in your favor — you’re wrong!”


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I have been a bankruptcy attorney since 1989. Our firm represents consumers filing bankruptcy almost exclusively, although I have represented bankruptcy trustees as well as creditors. For 2017-2019 I served on the American Bankruptcy Institute's Commission on Consumer Bankruptcy. Our Report recommended numerous changes to improve bankruptcy law to make it serve everyone in the process more effectively. If you live in Eastern Missouri, visit our website, send an e-mail or give us a call (314) 781-3400. Our website:
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