The means test is a test that was added to the bankruptcy code in 2005. It was added by congress and signed off on by the President. It looks at the consumer filing bankruptcy’s income over the six month period prior to filing. The test compares that income to the median income in Hawaii for a household of the same size. If the consumer makes more than the median income for a household of the same size, with certain limitations, there is a presumption that the consumer should be in a Chapter 13 and not in a Chapter 7.
If one is significantly over the median income, the means test will come up with a projected monthly disposable income payable to one’s unsecured creditors. That disposable income will then be paid to one’s general unsecured creditors through the plan.
There are ways to file a Chapter 7 even if you are over the median income and get a finding that there is no presumption that that person should be in a Chapter 13. For example if the debt is primarily business debt, or if there is significant secured debt or priority unsecured debt.