What Is the Bankruptcy Means Test in Wisconsin?

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Written by Attorney Tina Tran.  
Updated July 30, 2019

The bankruptcy Means Test in Wisconsin is an income threshold test set by the federal government. It is used to determine who is eligible for a discharge under a Chapter 7 bankruptcy. The income thresholds for the Chapter 7 Means Test are set by the United States Trustee Program using the Census Bureau’s Median Family Income Data. If you’re above the median income for Wisconsin, you still may be eligible to file for Chapter 7 bankruptcy, as long as your disposable monthly income (DMI) is below a certain amount. The Court calculates your DMI by applying median expense standards for food, clothing and out of pocket health care expenses. For example, in Wisconsin for a family of three living in Adams County the median mortgage payment is $897. In Waukesha County the same family would have a median mortgage payment of $1,554. This means if you live in Waukesha County you could deduct up to $1,554 from you monthly income on the Chapter 7 Means Test but if you live in Adams County you would only be allowed to deduct up to $897. 

Wisconsin Median Income Levels

Wisconsin Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
Household SizeMonthly IncomeAnnual Income
1$4,394.17$52,730.00
2$5,696.92$68,363.00
3$6,967.25$83,607.00
4$8,341.50$100,098.00
5$9,091.50$109,098.00
6$9,841.50$118,098.00
7$10,591.50$127,098.00
8$11,341.50$136,098.00
9$12,091.50$145,098.00
10$12,841.50$154,098.00

Discharge in Bankruptcy for Wisconsin

Obtaining a Wisconsin bankruptcy discharge is the ultimate goal of every debtor that requests relief under a Chapter 7 bankruptcy. A Wisconsin bankruptcy discharge means that a debtor is no longer legally obligated to pay debts listed in their Chapter 7 bankruptcy petition. In addition creditors are no longer legally allowed to try to collect the debts. Carefully, following the steps outlined by Upsolve on How to File Bankruptcy for Free in Wisconsin is the best way of putting yourself on the path towards achieving a discharge. It is important to understand, however, that even though a creditor cannot legally attempt to collect a debt that has been discharged, they may still deny you future credit or access to their services if you had an obligation you owed to them discharged. As a result a debtor is always free to voluntarily pay a debt that has been discharged. For example, if you owned season tickets to Green Bay Packers’ home games but a portion of the payments you owed for the tickets was discharged in a Wisconsin bankruptcy, you would be free to pay that portion after you obtain your discharge to remain eligible to purchase season tickets next year. However, you cannot make special arrangements with specific creditors prior to filing bankruptcy or during your bankruptcy. This is known as a preference and doing so could cause you to forfeit your right to a discharge. You must wait until after your Wisconsin bankruptcy has concluded or enter into an approved reaffirmation agreement. A reaffirmation agreement is an agreement between you and a creditor where you agree to continue paying a debt in exchange for the creditor agreeing to let you retain any property secured by the debt. Like those season tickets!  

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Wisconsin Means Test Calculator

One of the most overlooked requirements by individuals filing their own Chapter 7 bankruptcy petition is the Chapter 7 Means Test. Means Testing is a procedure used to determine if you earn enough income to be able to pay your debts based on what a similar size family in Wisconsin earns and how much of their income is spent on common expenses such as food, clothing, health care and housing. Means Testing was first required in 2005. When this requirement was added, a lot of online Means Testing calculators were published on the Internet by law firms, credit counseling agencies or other entities charging for their bankruptcy services. However, many of these calculators have never been updated or have not been updated in many years. Using one of these Means Testing calculators can prevent you from obtaining a discharge because the income and expense limits provided in them are out of date. And if the information in your petition is inaccurate or out of date trying to correct it later can be complicated, costly and time consuming. You can avoid these problems by using the Upsolve Wisconsin Means Test calculator that is continually updated. And is free to use!

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What Happens If I Fail The Means Test for Wisconsin?

Not everyone who would like to file a Chapter 7 bankruptcy will pass the Chapter 7 Means Test. The Chapter 7 Means Test was intentionally designed to prevent individuals who earn enough income to be able to pay their bills from obtaining a discharge in a Wisconsin bankruptcy. This is known as a presumption of abuse. It is possible that while your individual income is not high enough for a presumption of abuse to arise, your household income is. If this is the case the first thing you can do is go through your monthly expenses and make sure you have entered all of the expenses allowed as well as the specific amount of those expenses where requested in the Upsolve Chapter 7 Means Test calculator. Often you may be tempted to just estimate your expenses when using the Chapter 7 Means Test calculator in order to save time. You should not do this. Answer each entry and answer each entry thoroughly and specifically. If you are still unable to overcome the presumption of abuse Upsolve offers several suggestions for obtaining the aid of an attorney to go over options specific to you and your situation.

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