Frankfort, IL Means Test: Do You Qualify for Bankruptcy?
The bankruptcy means test screens consumer filers to assess eligibility for Chapter 7 and influences Chapter 13 plan terms. In Illinois, you compare household income to the applicable median and, if needed, subtract standardized and certain actual expenses to determine disposable income. Illinois exemptions protect certain property but do not replace the means test. Always use current official figures and local procedures.
The means test is a core step in many consumer bankruptcy cases. It is outlined in federal law and implemented through official forms and data updated by federal authorities. See the United States Courts overview and related resources for current means-testing information and figures: U.S. Courts – Means Testing and the U.S. Trustee Program means-testing site: USTP Means Testing.
What Is the Bankruptcy Means Test?
The means test is a financial screening used in consumer bankruptcy to assess whether a filer has sufficient disposable income to repay unsecured creditors. It compares household income to the applicable state median and, if necessary, analyzes allowed expenses and secured debt payments to estimate disposable income. The test is central to Chapter 7 eligibility and also informs Chapter 13 plan requirements. See 11 U.S.C. § 707(b) (presumption of abuse) and 11 U.S.C. § 1325 (confirmation standards).
Who in Frankfort, IL Must Take the Means Test?
Most individuals filing consumer bankruptcy in or near Frankfort (Will County) complete the means test forms. Limited exceptions may apply, including certain non-consumer debt cases and some military service-related circumstances. Because eligibility depends on your specific facts and timing, consult an attorney to determine whether an exception fits your situation. For background on when and how means testing applies, see the USTP Means Testing resource and the U.S. Courts overview.
Step 1: Compare Your Household Income to the Applicable Median
First, you determine current monthly income based on a defined lookback period and household size. If your annualized income is at or below the applicable Illinois median for your household size, you generally pass this step. If it is above, you proceed to a more detailed calculation. Median income figures are updated periodically by official sources, so always use the figures in effect when you file. See U.S. Courts – Means Testing and USTP Means Testing.
Step 2: Calculate Allowable Expenses and Disposable Income
If you are over the median, you complete a standardized expense analysis, combining set amounts (for items referenced to IRS standards) with certain actual expenses, plus secured debt payments, to estimate disposable income. The result can affect whether a Chapter 7 filing would be presumed abusive under 11 U.S.C. § 707(b) or whether a Chapter 13 plan is required and, if so, what you may need to pay to unsecured creditors under 11 U.S.C. § 1325. See also the USTP Means Testing page for current standards and forms guidance.
Documents and Information You’ll Need
- Pay stubs or proof of income for the lookback period and recent tax returns
- Documentation of other income (bonuses, side work, rental income, benefits)
- Mortgage and car loan statements
- Health insurance premiums and out-of-pocket medical costs
- Child support or alimony received or paid
- Records of necessary household expenses
Accuracy matters; even small omissions can change outcomes. Ensure your documentation matches the periods and categories used by the forms and applicable rules.
How Illinois Exemptions Fit In
Illinois has its own exemption laws that protect certain equity in your home, vehicle, personal property, and retirement assets. These exemptions help determine what you may keep in Chapter 7 and the minimum you must pay unsecured creditors in Chapter 13 under the best interests of creditors test in 11 U.S.C. § 1325(a)(4). See Illinois personal property exemptions at 735 ILCS 5/12-1001 et seq. and the homestead exemption at 735 ILCS 5/12-901. Illinois has opted out of the federal bankruptcy exemptions; see 735 ILCS 5/12-1201.
If Your Income Is Above the Median
Being over the median does not automatically disqualify you from Chapter 7. The second part of the means test may show little or no disposable income after allowed expenses. If a presumption of abuse arises, you may present additional circumstances to rebut it under 11 U.S.C. § 707(b), or consider Chapter 13. In Chapter 13, disposable income and median status can affect plan payments and whether your plan must run three or five years under 11 U.S.C. § 1325.
Local Considerations for Frankfort Residents
Most consumer cases for Frankfort residents are filed in the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division. Local procedures and trustee expectations may apply, including document requests before or at the meeting of creditors. Review the court’s site for current information: U.S. Bankruptcy Court, Northern District of Illinois.
Common Mistakes to Avoid
- Using outdated median income data or standards. These figures change periodically; confirm the current numbers on official sites (U.S. Courts; USTP).
- Misclassifying household size or income sources. Follow the definitions in the forms and applicable law; document all required income for the relevant period.
- Overstating or understating allowable expenses. Use standardized amounts where required and support any actual expenses where permitted.
- Ignoring secured debt payment timing. How and when payments are due can affect deductions.
- Overlooking local requirements in the Northern District of Illinois.
Practical Tips for Illinois Filers
- Pull your income data early and track any changes that could affect the six-month lookback average.
- Use the most recent median income and IRS standard tables posted by official sources on your filing date.
- Document special circumstances (e.g., recent job loss, medical needs) that may justify adjustments.
- Coordinate exemption planning with means test timing to avoid avoidable equity issues.
Pre-Filing Checklist
- Six months of pay stubs (or income proof) for every wage earner in the household
- Last two years of tax returns
- Statements for mortgages, auto loans, and other secured debts
- Insurance premiums, medical bills, and recurring prescriptions
- Child support/alimony orders and proof of payments
- Bank statements covering the lookback period
- List of monthly household expenses with supporting documentation
FAQs
Do Social Security benefits count as income in the means test?
For the statutory means test calculation, Social Security benefits are generally excluded from current monthly income, though they may still be relevant in overall feasibility and good-faith analyses.
What if most of my debts are business-related?
If your debts are primarily non-consumer, the means test may not apply the same way. A fact-specific review is required.
Will being over the median force a five-year Chapter 13 plan?
Usually yes; above-median debtors typically propose 60-month plans, subject to exceptions and local practice.
Can I choose federal exemptions in Illinois?
No. Illinois has opted out of the federal exemptions; Illinois exemptions apply for eligible residents.
How We Can Help
We can review your income, expenses, debts, and assets; run the means test using current official figures; advise on Chapter 7 versus Chapter 13; and coordinate your strategy with Illinois exemptions and local practice in the Northern District of Illinois. If your numbers are close, we can discuss timing, documentation, and lawful adjustments to present an accurate picture of your finances. Contact us to get started.
Ready to talk? Schedule a consultation today: Contact our Illinois bankruptcy team.
Disclaimer (Illinois): This blog is for general informational purposes only and is not legal advice. Laws and figures change, and results depend on your facts. Consult an attorney licensed in Illinois for advice about your situation.