What is a means test?
A means test is a federally mandated calculation that compares a debtor's household income against Ohio's median income to determine whether they qualify for Chapter 7 bankruptcy liquidation or must file Chapter 13 reorganization instead.
The means test is a required financial evaluation under federal bankruptcy law that uses your household income to decide which chapter you can file under. If your income falls below Ohio's median income for your family size, you pass the means test and may be eligible for Chapter 7 bankruptcy. If your income exceeds the median, you must proceed to the second part of the calculation, which deducts allowed expenses and debts to determine your disposable income. If you have disposable income remaining, the court may require you to file Chapter 13 instead, committing to a three-to-five-year repayment plan.
The Ohio median income figures are updated regularly by the U.S. Trustee Program and vary based on household size. For a single debtor, the threshold is one amount; a family of four has a higher threshold. These numbers matter in Cleveland Metro bankruptcies because they are the first gate through which filers pass. Foreclosure situations often involve substantial unsecured debt alongside mortgage obligations, making the means test outcome critical to your filing strategy.
Attorneys handling foreclosure cases in the Cleveland area use the means test to advise whether Chapter 7 offers a fresh start through asset liquidation or whether Chapter 13 restructuring is your required path. Filing without properly completing this calculation can result in dismissal, so the test is not optional, even though it is sometimes called a "calculation" rather than a formal hearing.