Is there a means test for Chapter 11 bankruptcy?

Yes, there is a means test for Chapter 11 bankruptcy in California. The purpose of the means test is to determine whether the individual filing for Chapter 11 bankruptcy qualifies to file under Chapter 11 or must file under Chapter 13 bankruptcy. In order to be eligible for Chapter 11 bankruptcy, the debtor must pass one of two tests. The first test is the median income test which compares the debtor’s household income to the median income of California households. If their income is below the median, they qualify for Chapter 11 bankruptcy. If their income is above the median, they must pass the second test, the disposable income test. This test looks at whether the debtor has any disposable income left after paying their reasonable monthly expenses. If there is no disposable income, the debtor qualifies for Chapter 11 bankruptcy. However, if there is disposable income, the debtor may be ineligible for Chapter 11 and must file under Chapter 13.

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Is there a means test for Chapter 11 bankruptcy?

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