How is means testing carried out?

Every person who files a chapter 7 case must file a document called Statement of Current Monthly Income and Means Test Calculation.  This document, when completed and filed, shows the person’s current monthly income and the current monthly expenses that the person is allowed to claim.  The person may also be questioned about his or her income and expenses at the meeting of creditors.  From these sources a person’s current monthly disposable income is calculated.  This figure is then used to determine the amount of the monthly payment that the person can afford to make to his or her unsecured creditors.  If the amount of this monthly payment is above a certain figure (usually $109.58), the person will almost always be disqualified from maintaining a chapter 7 case and the case will be dismissed or, with the person’s consent, converted to chapter 13.