If you're considering filing for Chapter 7 bankruptcy in Arizona, one of the first steps is passing the means test—a calculation used to determine whether your income qualifies you for a discharge of debts under Chapter 7. The means test is designed to limit Chapter 7 relief to individuals who truly cannot afford to pay their debts, but don't stress too much as most people qualify for Chapter 7 bankruptcy.
In this post, we’ll explain how the means test works, how it’s calculated in Arizona, and how Arsenal Law helps you navigate the process.
The means test is a financial assessment that compares your household income to the median income in Arizona for a household of your size. It also considers your allowable living expenses to determine if you have any disposable income left to repay creditors.
If your income is below the state median, you pass the means test automatically even if only by the slightest amount. If your income is above the median, the test becomes more complex and includes deductions to calculate whether you have enough income to repay some of your debts through a Chapter 13 repayment plan instead. Essentially, it is a calculation that considers your income compared to your expenses to see if you qualify.
The first part of the means test is relatively straightforward. You’ll calculate your average monthly income over the past six months, then multiply it by 12 to get your annual income. This amount is then compared to the Arizona median income for your household size.
⚖️ As of 2025, the Arizona median income estimates (subject to change) are approximately:
- 1 person: $58,000
- 2 people: $77,000
- 3 people: $87,000
- 4 people: $96,000
If your income is below the applicable number, you qualify for Chapter 7 based on income alone.
If your income exceeds the median, the second part of the test calculates your disposable income by deducting allowable living expenses. These expenses are based on national and local IRS standards, and may include:
If, after these deductions, your disposable income is too high, you may not qualify for Chapter 7. However, you may still be eligible for Chapter 13, which involves a repayment plan over time.
You are required to take the means test unless:
If you don’t pass the means test, don’t panic. Many individuals still qualify for relief through Chapter 13 bankruptcy, which lets you repay some debts over 3–5 years while protecting your property from foreclosure, repossession, or garnishment.
The means test is more complicated than it looks. One small error in calculating your income or expenses could result in a dismissal or delay in your case. An experienced Arizona bankruptcy attorney will:
At Arsenal Law, we help Arizona clients understand whether they qualify for Chapter 7 and walk them through the means test with clarity and confidence. We'll explain your options, gather the necessary documentation, and ensure your case is handled properly from the start.
We believe that bankruptcy is a powerful legal tool—not a failure—and we’re here to help you use it wisely.
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Call us today at 480-582-5228 or visit arsenallawaz.com to see if Chapter 7 bankruptcy is right for you.
