What is the Bankruptcy Means Test in New York?

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

If you are considering filing a Chapter 7 bankruptcy in New York, you are not alone. Many New Yorkers file bankruptcy because the cost of living is so high, especially if you live in the City. Bankruptcy can be a tool that can help you get back on your feet and back to enjoying life in the Empire State. To file a Chapter 7, you need to pass the Chapter 7 Means Test, which was created in 2005 to stop people who make too much money and can afford to pay back at least some of their debts from getting Chapter 7 relief. The bankruptcy Means Test in New York allows only people who are under a certain income limit and truly need the relief of a Chapter 7 to file. To pass the Chapter 7 Means Test, you must fall under the median income for a household of the same size in New York. If your monthly income, based on an average from the last 6 months, is less than the median income for your family size in New York, then you pass the Chapter 7 Means Test. If you fall above the median income, will have to proceed to the second part of the Chapter 7 Means Test analysis. The second part of the bankruptcy Means Test in New York looks at your income and your expenses to determine if you qualify. If you don’t have disposable income left to pay your debts after paying certain pre-determined living expenses, you qualify for Chapter 7 relief. 

New York Median Income Levels

New York Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
Household SizeMonthly IncomeAnnual Income
1$4,761.42$57,137.00
2$6,053.50$72,642.00
3$7,353.33$88,240.00
4$8,962.50$107,550.00
5$9,712.50$116,550.00
6$10,462.50$125,550.00
7$11,212.50$134,550.00
8$11,962.50$143,550.00
9$12,712.50$152,550.00
10$13,462.50$161,550.00

Discharge in Bankruptcy for New York 

When your bankruptcy proceedings have completed the Court will issue you a discharge. A discharge is your goal when filing a New York bankruptcy. A discharge means that you no longer have to worry about paying your unsecured debts. Once a discharge is entered, creditors can no longer call or harass you. Some debts are non-dischargeable and will survive your New York bankruptcy which means you have to continue to pay them. Debts that survive a bankruptcy are usually child support, recent tax debts, and alimony, but there are other exceptions as well. In order to get your discharge, it’s important that you file the correct paperwork and attend your Meeting of Creditors. Your New York bankruptcy discharge is not guaranteed and can be denied if you don’t go to your creditors’ meeting or are dishonest in your bankruptcy forms so it’s important that you follow each step carefully. If your discharge is denied, your creditors can still go after you for the amounts you owe. Upsolve is a nonprofit organization that can help you with the process of filing your New York bankruptcy free of charge assuming you pass the Chapter 7 Means Test. Upsolve has many online resources to guide you through the process so that you can file a Chapter 7 bankruptcy without an attorney.

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New York Means Test Calculator

Passing the Chapter 7 Means Test is the only way to qualify for a Chapter 7 bankruptcy. To qualify under the bankruptcy Means Test in New York, you will need to have all income sources (so your paychecks) and a list of your monthly expenses. In a Chapter 7 bankruptcy you will have to demonstrate that you don’t have the means to repay your debts. There are many online calculators that can be used to help you with this analysis. It’s important to keep in mind that the Means Test numbers change on a regular basis. That’s why it’s very important to use an up-to-date New York Means Test calculator. Unfortunately, many Chapter 7 Means Test calculators that are available online are outdated and it can be difficult to figure out which ones have been kept current. Upsolve’s New York Means Test calculator is always kept up-to-date, so you can rely on it. Using a calculator that is kept current is extremely important because if you don’t pass the Chapter 7 Means Test, you will not be able to file a Chapter 7 bankruptcy. If you are eligible, Upsolve can help you file your entire New York bankruptcy.

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What Happens If I Fail The Means Test for New York?

If you fail the bankruptcy Means Test in New York, you may want to recheck your income and expenses to make sure that you didn’t leave anything out. It is easy to forget some of your monthly expenses. If you still don’t qualify, you may want to wait to file. The Means Test takes your last six months of gross income and then takes the average to calculate your monthly income. If your income will be less in the future, your average monthly income for the bankruptcy Means Test in New York will go down, possibly allowing you to pass the Chapter 7 Means Test. If you still don’t qualify, you may want to consider a Chapter 13 bankruptcy as an alternative form of New York bankruptcy relief. A local bankruptcy lawyer can help you make that decision. Many lawyers give free consultations which can be the perfect opportunity to learn more about your options and discuss your issues with the Chapter 7 Means Test with a professional. 

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

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