If you’re overwhelmed by debt and considering bankruptcy, one of the first steps is to determine whether you qualify for Chapter 7 bankruptcy. In Indiana, like in all states, this is done through the Bankruptcy Means Test—a formula designed to assess whether your income is low enough to file under Chapter 7.
The Means Test compares your average monthly income over the past six months to the median income for a household of your size in Indiana. If your income falls below the state median, you typically qualify for Chapter 7 automatically. If your income is above the median, a second part of the test looks at your allowed expenses—such as housing, utilities, food, medical costs, and secured debt payments—to determine whether you have enough “disposable income” to repay a portion of your debts under Chapter 13 instead.
It’s important to understand that the Means Test isn’t just a math problem—it requires accurate documentation and a clear understanding of what the law considers allowable expenses. Many people incorrectly assume they won’t qualify, only to discover that they do once the numbers are calculated properly.
At Tyson Law Firm, we help clients navigate the Means Test with clarity and precision. If you’re unsure whether you qualify for Chapter 7 or what your bankruptcy options are, we can walk you through the process step by step—and help you make a fresh financial start. Give our office a call today at (317) 514-2681 to schedule a consultation.
Disclaimer:
This blog post is intended for general informational purposes only and reflects the laws and legal procedures of the State of Indiana. It does not constitute legal advice, nor does it create an attorney-client relationship. For legal advice specific to your situation, please contact a qualified attorney.
