Illinois Means Test Analysis: Chapter 7 Eligibility Help
TL;DR: The Chapter 7 means test compares your six-month average income against Illinois medians and, if needed, calculates disposable income using IRS standards. Passing helps, but it doesn’t guarantee your case can’t be challenged. If you don’t pass, Chapter 13 or documented special circumstances may still provide relief. Contact us to review your options.
What Is the Means Test?
The bankruptcy means test is a two-part screening used in Chapter 7 cases to evaluate whether a filing is presumed abusive under the Bankruptcy Code. The framework for the presumption appears in 11 U.S.C. § 707, particularly subsection (b)(2). Even if there is no presumption, a case may still be challenged for abuse based on bad faith or the totality of the circumstances under § 707(b)(3). If the means test indicates a presumption of abuse, you may consider Chapter 13 or present special circumstances that could rebut the presumption.
Who Must Complete the Means Test in Illinois
Most individual consumer debtors must complete the means test. By statute, the test applies only if the debtor is an individual whose debts are primarily consumer debts (11 U.S.C. § 707(b)(1)), so those with primarily non-consumer debts are not subject to it. There is also a specific exemption for certain disabled veterans whose indebtedness was incurred primarily during active duty or homeland defense (§ 707(b)(2)(D)).
How the Illinois Means Test Works
Step 1: Compare your income to Illinois medians
The means test first looks at your current monthly income, which is generally the average of most income received in the six full months before filing, as defined in 11 U.S.C. § 101(10A). Certain Social Security benefits are excluded by statute. Your average is then compared to Illinois median income for your household size; the U.S. Trustee Program publishes updated figures and resources here: USTP Means Testing.
Step 2: Calculate allowed expenses and disposable income
If your income is above the applicable median, the analysis turns to allowed deductions using the IRS National and Local Standards, plus certain actual expenses permitted by the Code (IRS Standards; see § 707). The Local Standards vary by area, including Chicago and other regions of Illinois. Household size is fact-specific and may vary by court; it typically includes those you support or with whom you share substantial expenses.
Documents and Information You’ll Need
- Recent pay stubs and proof of income for all household earners
- Non-wage income records (business, rental, gig work, retirement, unemployment)
- Six months of detailed income data and the last two years of tax returns
- Regular expense records (housing, utilities, transportation, healthcare, childcare)
- Secured debt statements (mortgage, auto) and lease agreements
- Domestic support obligations or other court orders
- Proof of special circumstances (for example, medical documentation, job loss, disaster-related costs)
Common Pitfalls in Illinois Filings
- Miscounting household size or dependents
- Omitting non-wage income (side jobs, rental income, support received)
- Using estimates instead of documentation
- Confusing which expenses are controlled by IRS Standards versus actuals
- Mixing up gross income and net take-home pay in the six-month average
- Filing at a time that creates an unfavorable six-month average due to income volatility
An attorney can help ensure your numbers align with statutory definitions and local practice and can prepare the correct forms, including Official Forms 122A-1 and 122A-2 (U.S. Courts forms).
Special Circumstances and Adjustments
Even if the initial calculation suggests you do not qualify, the Code allows special circumstances adjustments that, if properly documented, can rebut a presumption of abuse—for example, necessary medical expenses, care for an elderly or disabled family member, or an involuntary pay cut. These require itemization, documentation, and a detailed explanation under 11 U.S.C. § 707(b)(2)(B).
Illinois-Specific Considerations
While the means test formula is federal, Step 1 relies on Illinois-specific median figures that change periodically, and Step 2 uses IRS Local Standards that vary by geography, including the Chicago area. Always work from the latest official publications (USTP Means Testing). Each Illinois bankruptcy district (Northern, Central, Southern) may have local guidance on documentation and practice.
If You Don’t Pass the Means Test
Failing the means test does not necessarily end your bankruptcy options. Chapter 13 may allow a repayment plan based on your disposable income and can protect assets that might be non-exempt in Chapter 7. In some situations, adjusting the filing date (to change the six-month average) or documenting special circumstances may alter the outcome. Even if you pass the means test, cases can still be reviewed under § 707(b)(3) for bad faith or the totality of the circumstances.
Practical Tips for Illinois Filers
- Time your filing after a drop in income if feasible to improve the six-month average.
- Document every expense you intend to claim; unsupported estimates are often disallowed.
- Verify the latest Illinois median income and Local Standards the week you file.
- Discuss household size with counsel if your situation is nontraditional.
Pre-filing Checklist
- Six months of income records for all earners in your household
- Two years of federal and state tax returns
- Statements for mortgages, car loans, and leases
- Bills for housing, utilities, transportation, insurance, and childcare
- Healthcare and prescription cost documentation
- Proof of support obligations and arrears
- Evidence of special circumstances with itemized explanations
- Photo ID and Social Security card
How an Attorney Can Help
- Confirm eligibility and any statutory exemptions (for example, veterans, non-consumer debtors)
- Compile accurate income and expense data consistent with § 101(10A) and IRS Standards
- Apply the latest Illinois medians and Local Standards (USTP; IRS)
- Document and present special circumstances under § 707(b)(2)(B)
- Prepare Official Forms 122A-1 and 122A-2 (U.S. Courts forms)
- Advise on filing timing and respond to U.S. Trustee or trustee inquiries
FAQs
Do I have to include my spouse’s income?
If you are married and living together, the means test generally requires including your spouse’s income, with a marital adjustment for amounts not used for household expenses.
Are Social Security benefits counted?
Certain Social Security benefits are excluded from current monthly income by statute, but disclose them to your attorney so the forms are completed correctly.
Can special circumstances help me qualify?
Yes. Properly documented special circumstances, such as necessary medical costs or an involuntary pay cut, can rebut a presumption of abuse.
What if my income recently dropped?
Timing matters. Waiting a month or two can change the six-month average. Discuss strategy before filing.
Next Steps
Schedule a consultation to review your income, household size, debts, and expenses. Bring six months of income records, your latest tax returns, and details of major expenses. We will conduct a tailored Illinois means test analysis, discuss Chapter 7 eligibility, and outline alternatives such as Chapter 13 if appropriate. Ready to start? Contact us.
Sources
- 11 U.S.C. § 707
- 11 U.S.C. § 101(10A)
- 11 U.S.C. § 707(b)(2)(D)
- 11 U.S.C. § 707(b)(1)
- 11 U.S.C. § 707(b)(3)
- 11 U.S.C. § 707(b)(2)(B)
- U.S. Trustee Program Means Testing
- IRS National and Local Standards
- Official Forms 122A-1 and 122A-2
Disclaimer: This blog is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. Bankruptcy law is largely federal, but local rules and practices vary by district in Illinois; consult a licensed Illinois bankruptcy attorney about your specific situation.