Missouri Chapter 7 Means Test: Do You Qualify?

Although the median-income figures used in the test are Missouri-specific data points, the means test itself is a creature of federal bankruptcy law, not Missouri statute. Congress added it in 2005 to keep higher-income debtors from using Chapter 7's quick discharge when they could realistically repay some of their debts through a Chapter 13 plan. This guide walks through how each stage works for a Missouri filer.

Why the means test exists

Before 2005, eligibility for Chapter 7 was judged loosely. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) changed that by adding the means test to 11 U.S.C. § 707(b). The test is essentially a gatekeeper: it asks whether granting a Chapter 7 discharge to a particular debtor would be an "abuse" of the system because the debtor has enough income to fund a meaningful repayment plan.

It is important to keep the law straight. The means test is federal — every Chapter 7 filer in the country runs the same calculation under the same Code section. What makes it "Missouri-specific" is only the data plugged into the first step: the Missouri median family income by household size. That number changes periodically, and it is separate from Missouri's property exemptions (RSMo Chapter 513), which are a different topic entirely and play no role in the means test.

Step 1: The median-income comparison

The first step compares your income to the Missouri median for a household of your size. Most filers never have to go further than this.

Calculating current monthly income

The starting figure is your current monthly income (CMI) — a defined term that is not simply your salary. CMI is the average of your gross monthly income over the six full calendar months before filing, drawn from almost all sources: wages, self-employment income, rental income, interest, regular contributions from others toward household expenses, and more. A few items are excluded, most notably Social Security benefits. Because it is a six-month look-back, a recent raise, a lost job, or seasonal overtime can swing the number, so timing a filing can matter.

You then annualize that monthly average (multiply by 12) to get a yearly figure you can compare against the published median.

Comparing to the Missouri median

Next, you compare your annualized CMI to the Missouri median family income for your household size. These figures are published by the U.S. Trustee Program (drawn from Census Bureau data) and are updated periodically, so you must always check the current table rather than rely on an old number. Larger households are allowed a higher median, reflecting greater living costs.

• If your income is at or below the Missouri median for your household size, you pass the means test. The presumption of abuse does not arise, and you generally need not complete the longer calculation at all. Most consumer filers land here.
• If your income is above the Missouri median, you are not disqualified — but you must move on to Step 2, the full means-test calculation.

Step 2: The means-test calculation for above-median filers

Being above the median is not the end of the road. Step 2 measures how much disposable income you actually have after subtracting allowed living expenses. If too little is left to repay creditors, you can still qualify for Chapter 7.

Subtracting allowed expenses

This is where the calculation gets detailed. Rather than using your real budget line by line, the test relies heavily on standardized expense allowances so that filers are treated consistently:

• IRS National Standards cover categories like food, clothing, personal care, and household supplies, based on household size.
• IRS Local Standards cover housing, utilities, and transportation, varying by county and region.
• Actual allowed amounts are used for certain other expenses — for example, required taxes, mandatory payroll deductions, certain secured-debt payments (like a mortgage or car loan), and limited amounts for items such as health insurance or care for a dependent.

You subtract these allowed expenses from your CMI to arrive at your monthly disposable income, then project it over 60 months.

Whether the presumption of abuse arises

The Code uses dollar thresholds (which are adjusted over time) to interpret that 60-month figure. In general terms:

• If your projected disposable income is low enough, no presumption of abuse arises, and you may proceed with Chapter 7.
• If your projected disposable income is high enough to repay a meaningful portion of your unsecured debts, a presumption of abuse arises under 11 U.S.C. § 707(b)(2).

A presumption is not an automatic bar. You can try to rebut it by showing special circumstances — for example, a sudden medical emergency or a job loss after the look-back period — that justify additional expenses or income adjustments. But rebutting the presumption is demanding and fact-specific.

What happens if the presumption of abuse arises

If the presumption arises and you cannot rebut it, Chapter 7 is generally not available on its terms. The practical outcomes are:

• Dismissal of the Chapter 7 case, or
• Conversion to a different chapter, or
• Filing Chapter 13 instead — a three-to-five-year repayment plan in which you pay creditors out of your disposable income. For many above-median filers, Chapter 13 is the realistic path to relief.

The U.S. Trustee or the court can raise the abuse issue, so an above-median filer should expect the calculation to be scrutinized closely.

Special rules and important limits

A few statutory exceptions and cautions are worth knowing.

Disabled veterans and reservists

The means test contains relief for certain service members. A qualifying disabled veteran whose debts were incurred primarily during active duty or homeland-defense activity may be excused from the means test under § 707(b). Certain reservists and National Guard members called to active duty may also qualify for a temporary exclusion. These rules are narrow.

Primarily business (non-consumer) debts

The § 707(b) means test applies to debtors whose debts are primarily consumer debts. If more than half of your total debt is business debt rather than consumer debt, the means test generally does not apply to you — though a separate "bad faith" or totality-of-circumstances analysis can still come into play. This is a meaningful carve-out for failed-business owners.

Passing is about eligibility, not keeping property

Finally, do not confuse the two halves of Chapter 7. Passing the means test answers only whether you are eligible to file. It says nothing about which property you get to keep — that depends entirely on Missouri's exemptions (RSMo Chapter 513), a separate analysis. You can pass the means test easily and still have a non-exempt asset a trustee could sell, or fail it while owning very little. The test is an income screen at the front door, not a guarantee about the outcome inside.

Frequently Asked Questions