The Georgia Bankruptcy Means Test: Current Income Limits and How the Calculation Works

Since 2005, every individual who files Chapter 7 with primarily consumer debt has had to pass the means test, a formula Congress added to the Bankruptcy Code to steer higher-income debtors into Chapter 13 repayment plans. The test sounds simple, compare your income to the state median, but the details decide outcomes: which six months count, whose income is included, what the household size is, and which expenses can be deducted. This article explains how the test works for Georgia filers and where the figures come from.

Step One: Current Monthly Income

The test begins with “current monthly income,” a defined term in 11 U.S.C. § 101(10A) that does not mean what you earn now. It is the average of all income received during the six full calendar months before the month in which the case is filed. A case filed on any day in November, for example, looks at May through October. The six-month average is then multiplied by twelve and compared to the median for your household size.

Current monthly income is broad. It includes wages and salary, overtime and bonuses, self-employment and business income, rental income, interest and dividends, pension and retirement income, unemployment compensation in many courts, and regular contributions from anyone else toward household expenses, such as a non-filing spouse, a partner, or a parent. In a joint case, both spouses’ income is included. In a case filed by one spouse, the other spouse’s income is generally still counted to the extent it is contributed to the household.

A few categories are excluded by statute. Social Security benefits do not count. Benefits paid to veterans and service members in connection with a service-related disability or death are excluded under the HAVEN Act. Payments to victims of war crimes, crimes against humanity, and terrorism are also excluded.

Step Two: The Median Income Comparison

If annualized current monthly income is at or below the Georgia median for the household size, the debtor passes. No presumption of abuse arises, and under 11 U.S.C. § 707(b)(7) neither the trustee nor creditors may file a motion to dismiss the case as abusive based on the means test. The debtor files Form 122A-1, checks the box indicating no presumption of abuse, and does not complete the longer calculation.

Household size is often where the analysis gets contested. Courts in different jurisdictions use different approaches, from counting everyone who lives in the home to counting only dependents claimed on a tax return, and the difference between a household of three and a household of four moves the median by more than $22,000. How the household is counted should be settled before filing, not after.

Step Three: The Full Calculation for Above-Median Filers

A debtor whose income exceeds the median does not automatically lose access to Chapter 7. He or she must complete Form 122A-2, which deducts a prescribed set of expenses from current monthly income to arrive at monthly disposable income. The deductions include:

• IRS National Standards for food, clothing, housekeeping supplies, personal care, and miscellaneous expenses, based on household size rather than actual spending.
• IRS Local Standards for housing, utilities, and transportation, based on the county of residence and the number of vehicles.
• Actual expenses for taxes, mandatory payroll deductions, term life insurance, court-ordered support, childcare, health insurance, education for employment or for a disabled child, and certain other categories.
• Secured debt payments that will come due over the sixty months after filing, divided by sixty, plus any arrears needed to keep collateral.
• Priority debts such as recent taxes and support arrears, also divided by sixty.
• Chapter 13 administrative expenses at a percentage set by the U.S. Trustee for the district.

The result is multiplied by sixty. For cases filed on or after April 1, 2025, if sixty-month disposable income is less than $10,275, no presumption of abuse arises. If it is more than $17,150, abuse is presumed. Between those figures, abuse is presumed only if the amount would pay at least 25 percent of the debtor’s non-priority unsecured debt. These thresholds adjust every three years; the next adjustment is scheduled for April 1, 2028.

Rebutting the Presumption

A presumption of abuse is not the end of the analysis. Under 11 U.S.C. § 707(b)(2)(B), the debtor can rebut it by demonstrating special circumstances, such as a serious medical condition or a call to active military duty, that justify additional expenses or adjustments to income for which there is no reasonable alternative. The debtor must itemize and document each item and attest to its accuracy under oath. Courts apply this provision narrowly, and the documentation requirement is strict.

Who Is Exempt from the Means Test

The means test applies only to debtors whose debts are primarily consumer debts. An individual whose debts are mostly business-related, for example a failed company’s guaranteed obligations, is not subject to it at all, though the schedules must still be accurate and the case can still be reviewed for bad faith. Disabled veterans whose debts were incurred primarily during active duty or homeland defense activity are exempt, and so are reservists and National Guard members called to active duty for at least ninety days after September 11, 2001, for the duration of that service and 540 days afterward.

Passing the Means Test Is Not the Whole Story

Even a debtor who passes can face a motion to dismiss under 11 U.S.C. § 707(b)(3) if the case was filed in bad faith or if the totality of the circumstances of the debtor’s financial situation demonstrates abuse. The classic example is a debtor whose actual budget shows substantial room to pay creditors even though the formula does not. Trustees in the Northern District of Georgia review Schedules I and J alongside the means test forms, and a large gap between them invites questions.

The Means Test in Chapter 13

Chapter 13 filers complete a parallel set of forms, 122C-1 and 122C-2. The median income comparison determines the applicable commitment period: three years for below-median debtors and five years for above-median debtors. For above-median debtors, the disposable income calculation also sets the minimum amount that must be paid to unsecured creditors over the life of the plan. A below-median debtor proposes a plan based on actual income and expenses from Schedules I and J.

Why Filing Date Matters

Because the lookback is six calendar months and the calculation ignores what happens afterward, the filing date can change the result. A debtor who lost a job three months ago still has three months of full salary in the average; waiting until those months roll off the window may bring the average below the median. The reverse is also true: a bonus, a severance payment, or a short-term increase in hours can push a borderline debtor over the median for six months. These are legitimate timing considerations, and reviewing them is part of preparing a case.

Common Mistakes

• Counting the wrong six months, or using current pay instead of the lookback average.
• Omitting a non-filing spouse’s contribution to household expenses.
• Including Social Security benefits that should be excluded.
• Claiming a household size that cannot be supported.
• Deducting payments on a secured debt the debtor intends to surrender.
• Treating the means test as the only abuse screen and ignoring the actual budget.

Frequently Asked Questions

What is the income limit for Chapter 7 in Georgia?

There is no fixed limit. If your annualized six-month income is at or below the Georgia median for your household size, currently $68,478 for one person and $123,481 for a family of four for cases filed on or after April 1, 2026, you pass the first step. Above the median, eligibility depends on the disposable income calculation.

Does my spouse’s income count if only I file?

Generally yes, to the extent it is used to pay household expenses. The form allows a “marital adjustment” for the portion of the non-filing spouse’s income that is not contributed to the household, such as payments on that spouse’s separate debts.

Do I have to take the means test if my debts are business debts?

No. The test applies only when debts are primarily consumer debts. If more than half of your total debt arose from a business, you file a short statement of exemption instead of the calculation.

How often do the Georgia median income figures change?

The U.S. Trustee Program updates the Census Bureau figures periodically, most often with effective dates in the spring and in November. The IRS expense standards used in the second part of the test are updated on a separate schedule. The figures that apply are the ones in effect on the date the case is filed.

What happens if I fail the means test?

A presumption of abuse arises, and the U.S. Trustee will typically move to dismiss the Chapter 7 case unless you rebut the presumption or convert to Chapter 13. For many debtors, Chapter 13 was the better option in the first place, and the plan payment is often less than the formula suggests.

Georgia Chapter 7 and Chapter 13 Counsel

The means test is a calculation, but the inputs are judgment calls: the household, the lookback months, the deductions, and the filing date. Rountree Leitman Klein & Geer’s bankruptcy attorneys prepare these forms for clients throughout metro Atlanta and north Georgia and represent debtors when a trustee challenges the result. Contact our office to review your income and expenses before you file.