Utah Bankruptcy Means Test: Do You Qualify for Chapter 7?
Short answer: The "means test" is a federal calculation that determines whether your income is low enough to qualify for Chapter 7 bankruptcy, or whether you'd instead be steered toward Chapter 13. The first step compares your average household income over the past six months to Utah's median income for a household your size — if you're at or below that median, you generally pass without needing the more detailed second-step calculation.
Who this guide is for
Utah residents trying to figure out whether their income would qualify them for Chapter 7, before spending time on the rest of the bankruptcy process.
Step one: comparing your income to Utah's median
The test starts by annualizing your average gross household income from the six full months before filing, then comparing it to the U.S. Trustee Program's published median family income figure for Utah, broken out by household size. These figures are updated periodically (roughly twice a year) based on Census Bureau data, so the exact numbers change over time — check the U.S. Trustee Program's current means testing figures, or ask a bankruptcy attorney, rather than relying on a specific number that may already be outdated.
Step two: if you're above the median
If your income is above Utah's median for your household size, passing the means test isn't automatically ruled out — a second, more detailed calculation subtracts IRS-standardized allowable living expenses and certain actual debt payments from your income to determine your "disposable income." If what's left over is low enough (under thresholds set by the U.S. Trustee Program's formula), you can still qualify for Chapter 7; if not, the means test generally directs you toward Chapter 13 instead.
Why the means test exists
It was added to federal bankruptcy law specifically to prevent higher-income filers who could reasonably repay some debt from using Chapter 7's faster liquidation-and-discharge process instead of a Chapter 13 repayment plan — the mechanism Congress chose to sort filers between the two.
What counts as "household income" for this test
Generally, income from all sources for everyone in your household over the relevant six-month period — wages, self-employment income, and most other regular income — though certain benefits, like Social Security income, are generally excluded from the means test calculation specifically (even though they may still count as income elsewhere in your case).
Frequently asked questions
Where do I find the current median income figures for Utah? The U.S. Trustee Program publishes and periodically updates these figures by state and household size — a bankruptcy attorney will have the current numbers, since they change roughly twice a year.
Does failing the means test mean I can't file bankruptcy at all? No — it generally means Chapter 7 isn't available to you, not that bankruptcy itself is off the table; see Chapter 13 Bankruptcy in Utah: How It Works for the alternative.
Is the means test the only thing that determines which chapter I should file? No — even filers who pass the means test sometimes choose Chapter 13 for other reasons, like catching up on a mortgage or protecting non-exempt property; see Chapter 13 Bankruptcy in Utah: How It Works for when that applies.