The New York Bankruptcy Means Test: Figures and Forms (2026)

Filing for Chapter 7 bankruptcy in New York begins with the means test, a statutory formula created under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The means test determines whether a debtor has sufficient disposable income to repay creditors through a Chapter 13 plan rather than proceeding with Chapter 7 liquidation.

The means test compares your household’s “Current Monthly Income” (CMI) against New York’s median income levels to determine Chapter 7 eligibility.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways: New York Means Test

• The Means Test Formula: The means test evaluates whether your household’s “Current Monthly Income” (CMI) exceeds the state median. The Means Test is based on the average income six months before filing.
• Timing Strategy: Because income can increase because of a short-lived overtime boost or a bonus, delaying your filing to eliminate high-income months helps qualify for Chapter 7 bankruptcy.
• Presumption of Abuse: Exceeding the average income of your state triggers a “presumption of abuse” under 11 U.S.C. §707(b), forcing an analysis of allowable IRS expenses.
• Beyond Qualifying for Chapter 7: Passing the means test satisfies the initial Chapter 7 requirements, but it does not account for non-exempt assets or catching up on payments for secured debts like mortgages and car notes.

The Chapter 7 Means Test

Passing the Means Test is a one- or two-step process, depending on your income. Step one of the Means Test requires completing Official Form 122A-1. The average of all income in the preceding six months is calculated, then multiplied by two to compare it against the official New York median family income for your household size. Falling at or below the median income exempts you from the second phase.

However, eligibility still hinges on comparing your income to expenses to determine your disposable income. This is done with Schedule I (Income) and Schedule J (Expenses). Assuming you “pass” the Means Test, whether Chapter 7 is your best option also depends on New York exemption laws and being current on your secured debt payments.

New York Median Income Figures (2026)

The U.S. Trustee Program adjusts the income levels twice annually using U.S. Census Bureau data. The latest income figures for 2026 in New York are outlined below:

Household Size	Annual Median Income	Monthly Median Income
1 Person	$73,272	$6,106.00
2 Persons	$92,902	$7,741.83
3 Persons	$115,579	$9,631.58
4 Persons	$139,040	$11,586.67

For each individual beyond a household of four, add $11,100.

Failing the Means Test

Under Section §101(10A), “Current Monthly Income” (CMI) includes virtually all household income received in the six months before filing, including a non‑filing spouse’s earnings. This figure is used both in the Means Test and on Schedule I. Certain income sources, however, are excluded from CMI, most notably Social Security benefits, which are expressly carved out under §101(10A)(B) and can help a household remain below New York’s median income threshold.

If your CMI exceeds New York’s median for your household size, you must proceed to step two of the Means Test and complete Official Form 122A‑2. This phase applies a more detailed statutory formula that allows you to subtract standardized IRS expense allowances for categories such as housing, utilities, food, and transportation, along with actual payments on secured debts like mortgages and vehicle loans.

These deductions are designed to measure whether your remaining disposable income is low enough to justify Chapter 7 relief despite being above the median.

Importantly, exceeding the median does not bar you from Chapter 7. Step two permits additional deductions beyond the IRS standards, including necessary expenses such as health insurance premiums, court‑ordered support obligations, and ongoing secured‑debt payments.

These deductions can reduce disposable income below statutory thresholds and eliminate the “presumption of abuse,” allowing an above‑median debtor to qualify for Chapter 7.

When Chapter 13 Bankruptcy is a Better Alternative

Even if a debtor successfully passes the means test, Chapter 7 is not always the best choice. Chapter 13 often provides tools that Chapter 7 does not. For example, Chapter 13 allows for curing mortgage arrears to prevent foreclosure, with the missed payments spread out through the three-to-five year plan.

Chapter 13 also allows the removal of wholly unsecured junior liens or second mortgages when the property’s value no longer supports those liens, effectively stripping them and treating the balances as unsecured debt. Lien stripping can save a homeowner tens of thousands of dollars.

In addition, vehicle loans may be reduced to the car’s fair market value, a process known as the cramdown. For example, suppose your car loan balance is $25,000, but the fair market value is $18,000. With the Chapter 13 cramdown, the car loan balance is reduced to $18,000, and the $7,000 difference is treated as unsecured debt.

For additional guidance, you can search Bankruptcy.blog for district‑specific resources, including court information, trustee directories, and exemption summaries.

Educational Resources

• For Institutions: Colleges and universities may request examination copies of my textbook directly from Routledge Publishing.
• For Students & Practitioners: Single print and digital copies are available via Amazon Books.
• Video Lectures: Stream comprehensive legal breakdowns and video explanations on the Bankruptcy.blog YouTube Channel.

Bankruptcy Court & Consumer Resources

Explore additional consumer guides and state-specific directories to navigate your legal options:

• A step-by-step master guide to completing and understanding the bankruptcy petition.
• Bankruptcy Court Directory: Full listings for the federal bankruptcy court system and trustee contact information.
• State Bankruptcy Exemptions: Review your state‑specific exemptions or compare them with the federal exemptions.
• 341 Meeting Procedures: Prepare for your court date with updated rules, expectations, and practical guidance.

Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.

References

• Chapter 7 Statement of Your Current Monthly Income.
• Chapter 7 Means Test Calculation.
• 11 U.S. Code §101 – Definitions.