Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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The Chapter 7 bankruptcy means test helps determine if you qualify to file for Chapter 7 bankruptcy.

It’s essentially an analysis to see if you have the financial “means” to pay back your debts, thereby preventing abuse of the bankruptcy system. 

Here’s how the two-step process generally works

Step 1: Compare your income to the state median 

• Calculate your Current Monthly Income (CMI): This involves averaging your gross income (before taxes) for the six full calendar months (not partial months) leading up to your bankruptcy filing.

Here are the median income figures for Washington State for Chapter 7 bankruptcy cases filed on or after April 1, 2025: 

• 1 Earner: $85,482
• 2 People: $102,797
• 3 People: $124,869
• 4 People: $145,341 

For households larger than 9 people, $11,100 is added for each additional family member. These figures are sourced from the US Trustee Program of the Department of Justice are are updated in about May and November each year.

• Compare to State Median: You then compare your CMI, annualized (multiplied by 12), to the median income for a household of your size in your state, according to U.S. Census data.
• Pass or Proceed: If your annualized CMI is below your state’s median income for your household size, you’ve passed the first part of the means test and are generally eligible for Chapter 7. You won’t need to complete the second part of the test. 

Step 2: Determine disposable income (if needed) 

• Deduct Allowable Expenses: If your income is above the state median, you’ll proceed to the second step. This involves calculating your allowable monthly expenses using a combination of IRS standards and some of your actual expenses. Allowable expenses can include things like housing, utilities, food, transportation, and healthcare costs.
• Calculate Disposable Income: Subtracting these allowable expenses from your CMI will reveal your monthly “disposable income”.
• Pass or Consider Chapter 13: If your disposable income is low enough (indicating you don’t have enough left over to make meaningful payments to creditors), you may still qualify for Chapter 7. However, if your disposable income is too high, you might be assumed to be able to repay your debts through a Chapter 13 repayment plan instead. 

Important considerations

• Exemptions: Certain individuals, such as disabled veterans whose debts were incurred during active duty or those with primarily business-related debts, may be exempt from the means test.
• Special Circumstances: Even if you fail the initial calculations, you may still be able to argue that “special circumstances” justify additional expenses or adjustments to your CMI, potentially allowing you to qualify for Chapter 7, according to the U.S. Courts.
• Legal Advice: It’s essential to remember that bankruptcy laws can be complex. Consulting with Christopher S. Mulvaney is highly recommended to understand your specific situation and determine your eligibility for Chapter 7 bankruptcy. 

In essence, the means test acts as a gateway to Chapter 7 bankruptcy, ensuring that this debt relief option is available to those who truly cannot afford to repay their debts. 

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.