North Carolina Bankruptcy Means Test: Figures and Forms

If you are considering filing for Chapter 7 bankruptcy in North Carolina, the first hurdle you will face is the means test, a mathematical formula that determines whether you qualify for Chapter 7.  

The means test was introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to ensure that filers who can afford to repay their debts are directed toward Chapter 13 repayment plans instead. Passing the means test is a requirement to file Chapter 7.

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

Key Takeaways on the North Carolina Means Test

• The Means Test: The Means Test is a mathematical formula that determines eligibility for Chapter 7 bankruptcy.
• Income Calculation (CMI): “Current Monthly Income” is the average of all income received in the six calendar months prior to filing.
• Strategic Filing Timing: Because the calculation relies on a six-month lookback period, an isolated spike in income can inflate your CMI. Strategically choosing your filing date may help exclude high-income months.
• Rebutting the Presumption of Abuse: “Failing” the means test triggers a presumption of abuse under §707(b). However, this can be rebutted with evidence of “special circumstances,” such as serious medical conditions or active military duty.
• Beyond the Means Test: Passing the means test does not guarantee a Chapter 7 filing; you must also consider non-exempt assets and your ability to maintain payments on secured debt.
• The Chapter 13 Advantage: Even if you qualify for Chapter 7, a Chapter 13 filing may offer unique advantages, such as curing mortgage arrears or restructuring auto loans.

How the Means Test Works

The means test is a one- or two-step calculation that focuses on your household income and allowable expenses.

Step 1 uses Official Form 122A-1 to compare your average monthly income against the North Carolina state median for your household size. If your income falls at or below the median, you automatically pass, but that doesn’t mean Chapter 7 is your best choice, as it also depends on the exemptions afforded to your assets. In addition, you must be current on your secured debt payments such as your car loan and mortgage, if you want to keep those assets.

If you do not pass step one, then you must proceed to Step 2, which requires completing Official Form 122A-2. With Step 2, the expenses listed are based on IRS-approved expense deductions that reduce your “disposable income” below a statutory threshold. Step 2 provides substantial deductions for secured debt such as car loans and mortgages, helping debtors pass the Means Test.

North Carolina Median Income Figures (Effective April 1, 2026)

The U.S. Trustee Program, drawing on U.S. Census Bureau data, publishes updated median family income figures periodically. These figures govern whether a North Carolina filer must complete Form 122A-2. The table below reflects the figures effective April 1, 2026:

Household Size	Annual Median Income	Monthly Median Income
1 Person	$67,117	$5,593
2 Persons	$84,384	$7,032
3 Persons	$101,535	$8,461.25
4 Persons	$116,737	$9,728.03

For households larger than 4, add $11,100 per person. Note that Means Test figures are updated twice annually.

Form 122A-1: The Income Calculation

The income figure used on Form 122A-1, known as current monthly income (CMI) under 11 U.S.C. §101(10A), is the average of all income received during the six calendar months immediately preceding the filing date. That six-month average is then multiplied by twelve to produce an annualized figure for comparison against the state median.

Income sources that count toward CMI include wages and salary, rental income, business net income, and regular contributions from other household members. However, certain income is explicitly excluded by statute, such as Social Security benefits under §101(10A)(B)), payments to victims of war crimes or crimes against humanity, and military combat pay.

Important Timing Consideration

If you received a one-time bonus, sold a rental property, or had unusually high income in any month during the six-month lookback window, that spike will inflate your CMI, even if your current earnings are much lower. Timing your filing date strategically can exclude a high-income month from the calculation entirely.

For example, if based on your six-month average, the fourth month puts you over the means test limits, you can delay filing for three months, so your new six-month average excludes the fourth month.

Form 122A-2: Expense Deductions When You Are Above Median

Above-median filers are not automatically disqualified from Chapter 7; they must simply do more math based on the IRS National Standards, which have set amounts for household expenses such as food, clothing, and personal care. This includes additional allowable expenses such as for housing, transportation, and insurance.

Note the figures do vary per county, and the latest figures are available on the U.S. Trustee Program website.

What Happens If You Fail the Means Test?

“Failing” the means test means your CMI exceeds statutory thresholds, which means a presumption of abuse arises under § 707(b), but that presumption can be rebutted under §707(b)(2)(B), with evidence of special circumstances such as a serious medical condition, a call to active military duty, or other significant changes.

As noted previously, even if you pass the means test, because of non-exempt assets or disposable income when comparing Schedule I (Income) to Schedule J (Expenses), you might have to file Chapter 13 regardless.

Chapter 13 does offer advantages that Chapter 7 cannot, including the ability to cure mortgage arrears, potentially reducing or removing second mortgages or HELOCS, known as lien stripping, and reducing the car loan balances (cramdown).

The Bottom Line on North Carolina’s Means Test

Knowing where your household income stands relative to the state median gives you a better understanding of what your options are when it comes to bankruptcy. If you believe Chapter 7 or Chapter 13 may be right for your situation, the next step is a consultation with a licensed North Carolina bankruptcy attorney who knows the local trustees, understands the district-specific requirements, and can calculate your means test figures before you file.

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.

Bankruptcy and Statutory References

• Chapter 7 Statement of Your Current Monthly Income.
• Chapter 7 Means Test Calculation.
• 11 U.S. Code §101 – Definitions.
• 11 U.S. Code §707 – Dismissal of a case or conversion to a case under chapter 11 or 13.