Who Is Exempt From the Chapter 7 Means Test

How does the means test exception actually work?

The means test opens with a threshold question rather than an income calculation. Official Form 122A-1Supp, titled Statement of Exemption from Presumption of Abuse Under § 707(b)(2), asks first whether your debts are primarily consumer debts. If the answer is no, the form directs the filer to Form 122A-1, check box 1, there is no presumption of abuse, sign Part 3, and submit the supplement with the signed form. If the answer is yes, the supplement moves to two military service questions before income ever matters. That order is the whole point. The statute reaches only individual debtors whose debts are primarily consumer debts, so a filer outside that description is not measured against a state median at all. Married filers are treated individually here: the Middle District of Louisiana packet notes that when an exclusion in the statement applies to only one spouse, the other person should complete a separate Form 122A-1 if that is required.

What changes the answer?

Three things move the answer, and none of them is your income. The first is the character of your debts. Consumer debts are defined in 11 U.S.C. § 101 as debts incurred by an individual primarily for a personal, family, or household purpose, so the purpose of the borrowing, not the identity of the lender, is what the form asks about. The second is military status combined with timing. The supplement asks whether a disabled veteran incurred debts mostly while on active duty or while performing a homeland defense activity, and separately whether a Reservist or National Guard member was called to active duty or performed a homeland defense activity. The third is the calendar. The Guard and Reserve branch is built around specific periods, service of at least 90 days and release from active duty fewer than 540 days before the case is filed, so the same person can be inside that exclusion one month and outside it later.

What does federal law say?

Section 707(b)(1) of title 11 sets the boundary in its opening line: after notice and a hearing, the court may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts, or convert it with the debtor's consent, if it finds that granting relief would be an abuse. The presumption machinery in § 707(b)(2) sits inside that limit. Congress added § 707(b)(2)(D), which local rules call the means testing exclusion, and that is why several local rules open with the words unless either § 707(b)(2)(D)(i) applies, or § 707(b)(2)(D)(ii) applies. Two cautions belong here. First, 11 U.S.C. § 707 also contains subsection (a), which lets a court dismiss any Chapter 7 case for cause, including unreasonable delay that is prejudicial to creditors or nonpayment of required fees. Second, whether a person may be a Chapter 7 debtor at all is a separate question governed by 11 U.S.C. § 109.

Where do state or local rules differ?

The exclusion itself is federal, so it does not change from state to state. What changes is the local paperwork around it. Local rules in the District of New Hampshire, the Eastern District of Michigan, and the District of Minnesota all restate the same structure: unless the § 707(b)(2)(D) exclusion applies, an individual Chapter 7 debtor must file a statement of current monthly income, and must add the § 707(b) calculations only if that income exceeds the median family income for the applicable state and household size. The Eastern District of California adopted its interim rule by general order after the National Guard and Reservists Debt Relief Act of 2008. Two state-specific wrinkles appear in the official instructions: median income figures are published by state and household size, and cases filed in Alabama or North Carolina use a separately published administrative expense multiplier. Median figures live on our state pages, not here.

What does this look like in practice?

Three ordinary situations show the shape of the rule. A person whose credit card and medical balances make up nearly all of what they owe answers yes to the consumer debt question and continues to the income comparison. A person whose remaining debt is mostly a failed business's obligations, an unpaid line of credit drawn for the business, vendor balances, a commercial lease guaranty, answers no and is directed to the no-presumption box. A Guard member called to active duty after September 11, 2001 for at least 90 days works through the military questions instead. Here is the honest gap: the form asks whether debts are primarily consumer debts, and the official packets in our corpus do not set a percentage, so a filer with a genuine mix is in territory courts decide case by case. The United States Trustee reviews the statement in every individual Chapter 7 case regardless.

• The United States Trustee must review the debtor's statement and file a statement with the court on whether a presumption of abuse arises, within ten days after the first meeting of creditors.
• The clerk prepares and provides notice of that finding to all creditors within seven days after it is docketed.
• After filing a statement of presumed abuse, the United States Trustee has thirty days to move to dismiss, move to convert, or file a statement explaining why neither motion is appropriate.

What documents or information are involved?

The paperwork is short but unforgiving about consistency. Official Form 122A-1Supp is the statement you file when you believe you are outside the presumption, and it is filed together with Form 122A-1, the Chapter 7 Statement of Your Current Monthly Income. The supplement warns that your answer on the consumer debt question must be consistent with the answer given at line 16 of the Voluntary Petition, Official Form 101. Filers who stay in the test and whose income exceeds the state median go on to Form 122A-2, the Chapter 7 Means Test Calculation. Timing is set by rule rather than by the form: the statement of current monthly income is filed with the petition or within fourteen days after it in a voluntary case. The Southern District of Indiana's filing procedure also asks the filer to indicate whether a Guard or Reserve exclusion is being claimed when the documents are docketed.

• Official Form 122A-1Supp, Statement of Exemption from Presumption of Abuse Under § 707(b)(2).
• Official Form 122A-1, Chapter 7 Statement of Your Current Monthly Income.
• Official Form 122A-2, the Chapter 7 Means Test Calculation, if income exceeds the applicable state median.
• Line 16 of Official Form 101, which must match your consumer-debt answer on the supplement.
• For a Guard or Reserve claim, the dates of the call to active duty or homeland defense activity and any release date.
• Records showing what each significant debt was incurred for, since purpose is what the definition turns on.

What should you ask a lawyer?

Court staff cannot help with this. The Eastern District of Michigan's own guide for people filing without counsel says plainly that court employees are unable to provide legal advice, and the District of Arizona pamphlet says the same and is not a substitute for advice specific to your situation. The debt-character question is exactly the kind of judgment call where an early conversation is worth more than a long one later, because it decides whether the income calculation happens at all. If you are a veteran, a Reservist, or a Guard member, bring your service dates to the first meeting rather than trying to summarize them. If your debts are mixed, bring a list of the largest balances and what each one was actually for. These questions are a starting point, not a script.

• Given how my debts were incurred, are they primarily consumer debts, and what documentation supports that answer?
• Do my service dates fall inside the § 707(b)(2)(D) exclusion as of the date I would file, and does the exclusion extend beyond the period in Rule 1017(e)?
• If the presumption does not arise, what exposure remains under § 707(a) or a fact-based abuse argument?
• Would Chapter 13 be a better fit for my situation even if the presumption never applies?
• How does my district's United States Trustee typically handle mixed consumer and business debt?

Frequently asked questions

Does having business debt mean the means test does not apply?

It can, if those debts are primarily non-consumer. The statute reaches individual debtors whose debts are primarily consumer debts, and Official Form 122A-1Supp asks that question first. A no answer directs the filer to check the no-presumption box on Form 122A-1. The official packets do not set a percentage for primarily, so a mixed debt picture is decided case by case.

Is a disabled veteran automatically outside the means test?

Not automatically. The supplement asks two linked questions: whether the filer is a disabled veteran as federal veterans law defines that term, and whether the debts were incurred mostly while on active duty or while performing a homeland defense activity. Only a yes to both directs the filer to check the no-presumption box. A no to the second question sends the filer to the National Guard and Reserve questions instead.

Is the National Guard and Reserve exclusion permanent?

No. It is temporary by design. Local rules describe it as a temporary means testing exclusion and treat it differently depending on whether it extends beyond the period specified by Rule 1017(e). The form is written around specific windows, including service of at least 90 days and release from active duty fewer than 540 days before the case is filed, so timing can change the answer.

If the presumption does not apply, do I still file an income form?

Generally yes. Official Form 122A-1Supp is filed together with Form 122A-1, and the form's own instruction is to go to Form 122A-1, check box 1, and sign Part 3. What the exclusion removes is the second form, the Chapter 7 Means Test Calculation on Form 122A-2, and the presumption of abuse that the calculation can produce.

Is being below the median income the same as an exception?

No, and the distinction matters. Below-median filers are still inside the means test. The official instructions say that if income is not above the state median, the second form is not required; if it is above, Form 122A-2 must be filed. An exclusion under § 707(b)(2)(D) is different because it keeps the presumption from arising regardless of where income falls.

Can my case still be dismissed if the presumption does not arise?

Yes. 11 U.S.C. § 707(a) lets a court dismiss a Chapter 7 case for cause after notice and a hearing, including unreasonable delay that is prejudicial to creditors, nonpayment of required fees, or failure to file required information. Separately, the United States Trustee reviews the statement in every individual Chapter 7 case and files a statement with the court about whether a presumption of abuse arises.

Sources

• 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
• 11 U.S.C. § 101 — Definitions · official source
• 11 U.S.C. § 109 — Who may be a debtor · official source
• Bankr. M.D. La. filing packet — Ch7_Vol_Petition_ Package-2026.pdf — Official Form 122A-1Supp, Statement of Exemption from Presumption of Abuse Under § 707(b)(2)
• Bankr. E.D. La. official guidance — Chapter 7 Form Packet — Official Form 122A-1, Chapter 7 Statement of Your Current Monthly Income
• IBR 1007-11 — Lists, Schedules, Statements, and Other Documents; Time Limits; Expiration of Temporary Means Testing Exclusion
• E.D. Mich. LBR 1007-4 — Lists, Schedules, Statements and Other Documents; Time Limits
• Bankr. D. Minn. official page — Interim Bankruptcy Rules [https://www.mnb.uscourts.gov/interim-bankruptcy-rules] — Interim Rule 1007-I
• CAEB Form GO.11-02 — Order Adopting Revised Interim Rule 1007-1
• Bankr. M.D. Fla. Procedure Manual — Presumption of Abuse - Chapter 7 — Presumption of Abuse — Chapter 7
• Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals — Instructions for Bankruptcy Forms for Individuals
• Bankr. S.D. Ind. official page — Chapter 7 Statement of Current Monthly Income — Chapter 7 Statement of Current Monthly Income
• U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements
• Bankr. E.D. Mich. official guidance — A Guide for Pro Se Filers

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