A lot of people assume that a steady paycheck puts Chapter 7 bankruptcy out of reach. We hear that concern frequently from clients across Metro Atlanta, and it’s one of the most common misunderstandings about the process. The Chapter 7 means test in Georgia isn’t simply an income cutoff. It’s a two-part calculation that weighs your income against your allowable expenses, and passing the second part is often possible even when the first part looks discouraging.
Since 2007, we’ve guided clients through this exact question, including people who came in certain they earned too much and left with a clear path forward. Understanding how the means test actually works, not just that it exists, is the first step toward knowing where you stand.
What the Chapter 7 Means Test Actually Determines
The means test, completed on Form 122A-1, exists to distinguish filers who genuinely can’t pay their debts from those who could manage a structured repayment. Its purpose isn’t to screen out people with income. It’s to apply a standardized formula that accounts for household size, regional cost of living, and ongoing financial obligations.
Crossing the income threshold in Step One doesn’t end the analysis. It moves the filer into Step Two, a deeper calculation of disposable income that often changes the result. And even when the formula produces a presumption of abuse (a legal finding that Chapter 7 would be inappropriate), that presumption can be challenged with documented evidence of special circumstances. The process has more flexibility built into it than most people expect.
Step One: How Your Income Compares to Georgia’s Median
The starting point is your current monthly income, or CMI, which is the average of all gross income received during the six calendar months immediately before your filing date. That averaged monthly figure is then annualized and compared to the median family income for Georgia households of the same size. The U.S. Trustee Program publishes these figures twice a year, typically in April and November, so any income table you found online may already be outdated. Always confirm current figures at the time of filing. If your annualized CMI falls at or below Georgia’s median for your household size, you automatically pass the means test and can proceed with a Chapter 7 filing.
Step Two: What Happens When Your Income Exceeds the Median
When your income exceeds the state median, the second part of the means test subtracts a defined set of allowable expenses from your CMI to determine disposable income. These deductions aren’t based on what you actually spend. They’re drawn from IRS National Standards, which set allowances for categories like food, clothing, and household supplies, and IRS Local Standards, which govern transportation and housing costs by county. Filers can also deduct actual payments on secured debts (such as a car loan or mortgage) averaged over the next 60 months, along with taxes, mandatory payroll deductions, and health insurance premiums.
After all allowable deductions are subtracted, the remaining figure is your disposable income, which is then multiplied by 60. If the total falls below the statutory threshold set by the Bankruptcy Code, the presumption of abuse doesn’t arise, and Chapter 7 remains available. Many filers with above-median income still clear this threshold once their allowable deductions are applied.
If You Don’t Pass: Your Options Going Forward
A disposable income figure that exceeds the threshold triggers the presumption of abuse, but that’s still not a final answer. The Bankruptcy Code allows filers to rebut the presumption by demonstrating special circumstances the formula doesn’t capture. Examples include job loss that occurred after the six-month lookback period, significant medical expenses not reflected in IRS standards, or reduced income from military service. The key is documentation: written explanations and evidence to support each claimed adjustment.
It’s also worth noting that because the means test looks backward over six months, a recent income reduction can meaningfully change the calculation. If you lost a job or had your hours cut, your CMI may be lower than your current situation suggests, and the timing of your filing can affect your result.
Filers who can’t rebut the presumption are generally directed toward Chapter 13 bankruptcy instead. Rather than discharging most unsecured debt through liquidation, Chapter 13 restructures what you owe into a three-to-five-year repayment plan based on your disposable income. It’s a different path, but for many people it still leads to real relief and a way out from under unmanageable debt.
Filing in Henry County & the Northern District of Georgia
Stockbridge, located in Henry County, falls within the Atlanta Division of the U.S. Bankruptcy Court for the Northern District of Georgia. Cases filed by Henry County residents are handled through that division, and your means test schedules (including Form 122A-1) must be submitted with your bankruptcy petition to the correct court. Trustee practices and local procedural expectations can also vary across divisions, which is one reason local familiarity matters when preparing your filing.
Knowing Where You Stand Before You File
A means test result, whatever it shows, is a starting point rather than a verdict. Above-median income doesn’t close the door on Chapter 7, a presumption of abuse doesn’t eliminate all options, and even a result that points toward Chapter 13 can represent a workable path to financial recovery. What actually determines your options is a careful look at your specific numbers, run against current Georgia figures, with your household size and deductible expenses properly accounted for. The Bankruptcy Law Group LLC offers free initial consultations with evening and weekend appointments available, so you can review your actual numbers with us at your convenience. Call us at (770) 766-5004 to get started.