Get Means Test Form

Means-tested benefits have the advantage of being more narrowly targeted, and therefore less costly, than universal benefits. One disadvantage, however, is that a means-tested benefit imposes an implicit marginal tax on people with earnings close to the income level at which the benefit phases out.

You can earn a high income and still pass the means test if you have substantial expenses like a hefty mortgage, multiple car payments, taxes, childcare, health care, or care of an elderly or disabled person. However, if your disposable income is more than a certain sum, you will not be able to file.

The first form, 122A-1, determines whether your income is below the median income in Alabama. You will need to give the court information about all sources of income, how much income you have, your tax filing status, and your marital status.

A means test determines if a person or household is eligible to receive some sort of benefit or payment. Means-tested benefits include many government assistance and state and federal welfare programs that measure a family's income against the federal poverty line.

Means-tested programs limit eligibility to individuals and families whose incomes and or assets fall below a pre-determined threshold (means test).

For example, in countries with free college, wealthy people get something for free that they could easily pay for. The state is subsidizing a benefit for the rich at the same time that it's subsidizing a benefit for the poor and the middle class. That's one argument that's used in support of means-tested programs.

The purpose of the means test is to see that if the debtor is abusing the bankruptcy system by filing Chapter 7 bankruptcy cases even though they could afford to pay at least some of their debts. Therefore, the means test is mainly testing the ability of the debtor to pay the creditor(s).

The means test is calculated by comparing the debtor's average income for the past six months (current monthly income), annualized, to the median income for households of the same size in the debtor's state of residence.