What is the Bankruptcy Means Test in Massachusetts?

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Written by Karra Kingston, Esq.  
Updated July 28, 2019

Filing for bankruptcy may be an option you want to consider if you are losing sleep over your bills. Many people have filed a Massachusetts bankruptcy for various reasons including divorce, medical bills, and other monthly expenses. To qualify for a Massachusetts bankruptcy under Chapter 7 of the Bankruptcy Code, you must complete the Chapter 7 Means Test. The Means Test was created by Congress in 2005, due to a concern that too many people were filing bankruptcy even though afford to pay back their debts. The Chapter 7 Means Test is used as a gatekeeper to allow only people who can’t pay back their debts to get Chapter 7 relief. It takes your income and compares it to the median household income in Massachusetts. If your income is above the median household income, then you don’t automatically qualify to file your Massachusetts bankruptcy as a Chapter 7 case. However, all hope is not lost, because you then move to the second part of the test. The second part of the test uses your monthly expenses to look at how much disposable income, or money left after paying for your regular monthly expenses, you actually have. If you have no (or very little) disposable income, then you qualify for a Chapter 7 bankruptcy. 

Massachusetts Median Income Levels

Massachusetts Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
Household SizeMonthly IncomeAnnual Income
1$5,593.25$67,119.00
2$7,010.42$84,125.00
3$9,010.83$108,130.00
4$11,201.50$134,418.00
5$11,951.50$143,418.00
6$12,701.50$152,418.00
7$13,451.50$161,418.00
8$14,201.50$170,418.00
9$14,951.50$179,418.00
10$15,701.50$188,418.00

Discharge in Bankruptcy for Massachusetts

A bankruptcy discharge is the ultimate goal of a Chapter 7 bankruptcy. A Massachusetts bankruptcy discharge is the Bankruptcy Court’s order clearing you of liability for debts you took out before your Massachusetts bankruptcy. Most debts are wiped out except for non-dischargeable debts, like student loans and recent tax debts. Shortly after the Massachusetts bankruptcy discharge order is entered by the Court, your case will likely be closed and done for good. A bankruptcy discharge is usually granted 60 days after your first 341 hearing. To make sure your Chapter 7 bankruptcy moves forward smoothly you will want to prepare to make sure you handle your case properly. You will want to submit all the required documents and attend your 341 hearing. Your Maine bankruptcy discharge order should be kept safe with your other bankruptcy documents as proof of that you have been relieved from your obligation to pay your debts. It’s important to keep in mind that a discharge is not automatically granted. You will need to be honest and cooperate with the Court and the Trustee to make sure that you receive a discharge in your Massachusetts bankruptcy case. 

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Massachusetts Means Test Calculator

For help finding out whether you qualify for Chapter 7 relief after you fail part one of the Chapter 7 Means Test, you can use a Massachusetts Means Test Calculator. There are many available online, but it’s important you use one that is up to date with the correct numbers. The Massachusetts Means Test Calculator calculates your disposable income. It adds up your monthly expenses and subtracts them from your monthly income to verify if you have money left over at the end of each month to pay down the debt you owe. Many online calculators are outdated. Making sure that you use a calculator that is kept current is extremely important. If you use one that is outdated, you may end up thinking you don’t qualify for a Chapter 7 bankruptcy even though you actually do. Upsolve can assist you in filing a Chapter 7 Massachusetts bankruptcy. It’s a nonprofit offering services and resources to assist you through the bankruptcy Means Test in Massachusetts and the rest of your bankruptcy forms to make sure that you receive a discharge. 

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What Happens If I Fail the Means Test for Massachusetts?

If you fail the Chapter 7 Means Test, then you will first want to check your numbers and recalculate. It is essential that your calculations are correct. Also, take a second look at your monthly expenses to make sure you did not miss any categories - like childcare or continuing contributions to the care of household or family members. Sometimes one additional expense can allow you to qualify under the Means Test. If you still don’t pass the Chapter 7 Means Test after recalculating, you may want to wait to file. If you know you are going to retire or lose your job the resulting loss in income may mean you pass the bankruptcy Means Test in Massachusets by simply waiting a few months before filing. Out of necessity, some in Massachusetts consider filing Chapter 13 bankruptcy if they can’t pass the Chapter 7 Means Testdue to their high income. If you don’t think you pass the Means Test, you may want to contact a local bankruptcy attorney. A bankruptcy attorney can make sure you did your calculations correctly and many of them offer a free consultation that can help explain the process you. 

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