For most people considering bankruptcy, the first real question is simple. Do I qualify? The answer for Chapter 7 runs through a calculation called the means test, which compares your household income to the median income for a Utah household of your size. Pass it and the fastest form of debt relief is on the table. Land above the limits and the path usually shifts toward Chapter 13 instead.
This guide walks through the current Utah income limits, how the two-step calculation actually works, who is exempt from the test entirely, and what your options look like if your income is above the line.
The means test was created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Its job is to act as the gatekeeper for Chapter 7, reserving that chapter’s fast and complete discharge for filers who genuinely lack the income to repay a meaningful portion of their debts. The test applies to individuals whose debts are primarily consumer debts, and it works in two steps. Step one compares your income to Utah’s median. Step two, needed only if your income is above the median, digs into your expenses.
The test starts with your current monthly income, which despite the name is backward looking. It is the average of your gross income over the six full calendar months before you file. It counts nearly every income source in the household, including wages, self-employment income, rental income, pension income, unemployment, and regular contributions from others toward household expenses. Social Security benefits are excluded from the calculation under the Bankruptcy Code’s definition of current monthly income in 11 U.S.C. Section 101(10A).
That monthly average is annualized and compared to the median family income for a Utah household of your size, using figures published by the U.S. Trustee Program.
If your annualized income is at or below the median for your household size, you pass the means test at step one. No presumption of abuse arises, and Chapter 7 remains fully available. Most Utah filers qualify right here, and the rest of the analysis never happens.
Earning above the median does not disqualify you. It just means the test continues to the longer form, Official Form 122A-2, which measures whether you have enough disposable income to meaningfully repay creditors.
This calculation subtracts allowed expenses from your income. Some expenses come from IRS national and local standards, such as food, clothing, housing, utilities, and transportation. Others use your actual costs, including taxes, mandatory payroll deductions, health insurance, court-ordered support payments, childcare, and payments on secured debts like a mortgage or car loan.
What remains after those deductions is your monthly disposable income, projected out over 60 months. For cases filed between April 1, 2025 and March 31, 2028, the law sets these trigger points under 11 U.S.C. Section 707(b)(2). If your 60-month disposable income is below $10,275, no presumption of abuse arises and Chapter 7 remains available. If it is $17,150 or more, the presumption of abuse arises. In between those figures, the presumption arises only if your disposable income could pay at least 25 percent of your unsecured nonpriority debts.
Even when the presumption arises, it can be rebutted by documenting special circumstances, such as a serious medical condition or a call to active military duty, that justify additional expenses or income adjustments. This is detailed, evidence-heavy work where an experienced attorney earns their keep.
Some filers never have to take the test at all. If your debts are primarily business debts rather than consumer debts, the means test does not apply to your Chapter 7 filing. Certain disabled veterans whose debts were incurred primarily during active duty or homeland defense activity are also exempt, and the law provides temporary exclusions for some reservists and National Guard members called to active duty. If any of these might describe you, raise it with your attorney at the first meeting, because it can take the entire income question off the table.
Failing the means test does not mean bankruptcy is unavailable. It means Chapter 13 becomes the likely route, and for many families it is the better tool anyway, since it can stop foreclosure, catch up secured debts, and protect co-signers while you repay what your budget actually allows. Our guide to how Chapter 13 works in Utah covers the full picture.
Chapter 13 has its own version of this analysis, often called the disposable income test. Instead of deciding eligibility, it sets the terms of your repayment plan. Your disposable income after allowed expenses determines what you pay unsecured creditors, and your income relative to the Utah median determines your commitment period. Below-median filers generally propose three year plans, while above-median filers generally commit to five years. When the plan finishes, remaining qualifying unsecured debt is discharged.
Timing also matters more than most people realize. Because the means test looks at a rolling six month window, a recent job loss, pay cut, or end of overtime changes the calculation as each month passes. Someone who fails the test today might pass it after their reduced income has been in place for a few months, which is one of several reasons the filing date itself is a strategic decision.
Qualifying for Chapter 7 answers the income question, but a good filing strategy also looks at what you own. Utah has opted out of the federal exemption scheme, so Utah’s exemption laws determine what property you keep in a Chapter 7 case. For a fuller view of how a case unfolds from filing to discharge, see our guide to Chapter 7 bankruptcy in Utah, and if you are still weighing the two chapters against each other, our comparison of Chapter 7 and Chapter 13 lays out the tradeoffs.
Find Out Where You Stand in One Conversation
The means test looks intimidating on paper, but with your income records in hand, an experienced attorney can usually tell you where you stand quickly. At Blue Bee Bankruptcy Law, we run the numbers with you, explain your options in both chapters, and help you time your filing for the strongest result. Call (801) 285-0980 to schedule a consultation.
The means test is the two-step calculation that determines whether you qualify for Chapter 7 bankruptcy. Step one compares your household income to the median income for a same-size household in your state. Step two, used only when income is above the median, subtracts allowed expenses to measure whether you have enough disposable income to repay creditors.
For cases filed on or after July 15, 2026, the U.S. Trustee Program lists Utah’s median family income as $87,898 for a household of one, $95,757 for two, $112,751 for three, and $131,741 for four, with $11,100 added for each additional person. Income at or below these figures passes the means test at step one. The figures adjust periodically.
Nearly all gross income received during the six full calendar months before filing counts, including wages, self-employment and business income, rental income, unemployment compensation, pension income, and regular contributions others make toward your household expenses. The six month average is annualized for comparison to the state median.
No. Social Security benefits are excluded from the definition of current monthly income under 11 U.S.C. Section 101(10A), so they do not count against you in the means test calculation.
The Bankruptcy Code does not define household size, and courts have applied different approaches, from counting every person living in the home to counting only those who function as one economic unit. Because the count determines which income limit applies, situations involving roommates, adult children, or shared custody deserve an attorney’s analysis.
You move to the second step, which subtracts allowed expenses to calculate your disposable income over 60 months. For cases filed between April 1, 2025 and March 31, 2028, no presumption of abuse arises below $10,275, the presumption arises at $17,150 or more, and between those figures it arises only if you could pay at least 25 percent of your unsecured nonpriority debts.
Yes. Filers whose debts are primarily business debts rather than consumer debts are not subject to the means test. Certain disabled veterans whose debts arose primarily during active duty or homeland defense activity are exempt, and temporary exclusions exist for some reservists and National Guard members on active duty.
Chapter 13 uses a related calculation to set the terms of your repayment plan rather than to decide eligibility. Your disposable income determines what unsecured creditors receive, and your income relative to the Utah median sets the commitment period, generally three years for below-median filers and five years for above-median filers.
Effectively yes, because the test measures a rolling six month income window. If your income has recently dropped, waiting until the lower income fills more of that window can change the result. An attorney can help you evaluate whether timing your filing differently would matter in your case.
No. It generally means Chapter 7 is presumed unavailable and Chapter 13 becomes the path, with a repayment plan built around your actual budget. In some cases the presumption of abuse can also be rebutted by documenting special circumstances that justify additional expenses or income adjustments.
