What is the means test?

The means test is a formula that determines whether you have enough disposable income to repay creditors. It compares your average monthly income over the last 6 months to New York's median income for your household size. If you are below the median, you qualify. If above, you subtract allowed expenses to see if you have sufficient disposable income to fund a Chapter 13 plan.

Can I choose between state and federal exemptions in New York?

Yes. New York is one of the states that allows debtors to choose between state and federal exemption schemes. The New York state homestead exemption ranges from $179,975 to $215,550 depending on the county. The federal homestead exemption is $27,900 for an individual (2024). A bankruptcy attorney can help determine which set protects more of your property.

Chapter 7 Eligibility in New York

Q: How often can I file Chapter 7?

You must wait 8 years between Chapter 7 discharge dates to receive another Chapter 7 discharge under 11 U.S.C. section 727(a)(8). If you received a Chapter 13 discharge, you must wait 6 years unless you paid 100% of unsecured claims or 70% in a good-faith plan. Check your eligibility with the 1328(f) screener.

Q: Who cannot file Chapter 7?

You cannot file Chapter 7 if: you fail the means test and have no special circumstances, you received a Chapter 7 discharge within the past 8 years, you had a prior case dismissed for abuse within 180 days, you have not completed credit counseling, or you are a stockbroker or commodity broker.

Chapter 7 eliminates most unsecured debt in 3-4 months, but you must qualify. The primary gatekeeper is the means test. Here is what New York filers need to know.

The means test compares your income to New York's median. For a 1-person household, the median is $66,973. For 2 persons it is $82,282; 3 persons $97,878; 4 persons $119,164. If your income is below the median, you pass automatically. If above, you may still qualify after deducting allowed expenses.

New York Means Test Income Limits

The means test compares your average monthly income over the last 6 calendar months to New York's median income. If you are below the median, you automatically qualify.

Household Size	Annual Median Income	Monthly Equivalent
1 person	$66,973	$5,581
2 persons	$82,282	$6,857
3 persons	$97,878	$8,157
4 persons	$119,164	$9,930

Add $10,300 for each person beyond 4. Figures updated periodically by the U.S. Trustee Program.

Above-Median Income? You May Still Qualify

If your income exceeds the median, the means test subtracts allowed expenses (housing, transportation, healthcare, taxes, childcare, etc.) from your income. If the remaining disposable income is too low to fund a meaningful Chapter 13 plan, you still qualify for Chapter 7.

Key deductions include:

Actual mortgage or rent payments
IRS Local Standards for transportation and housing
Health insurance and out-of-pocket medical costs
Childcare and education expenses (up to $2,025/child/year)
Payroll taxes and mandatory retirement contributions
Secured debt payments (car loans, mortgage)
Priority debts (tax debts, domestic support obligations)

New York's high cost of living often means above-median filers still pass after deductions.

Who Cannot File Chapter 7

Fail the means test with no special circumstances - you would need to file Chapter 13 instead
Prior Chapter 7 discharge within the last 8 years (measured from filing date to filing date) - 11 U.S.C. section 727(a)(8)
Prior Chapter 13 discharge within the last 6 years (unless you paid 100% of unsecured claims or 70% in a good-faith plan) - section 727(a)(9)
Prior dismissal for abuse within 180 days - section 109(g)
No credit counseling - you must complete an approved credit counseling course within 180 days before filing
Stockbrokers and commodity brokers - must use SIPA liquidation instead

New York Exemption Choice

New York lets you choose between state and federal exemptions. Key state exemptions:

Homestead: $179,975--$215,550 depending on county
Vehicle: $4,825
Personal property: Various limits for clothing, furniture, tools of trade

The federal exemption set has a homestead of $27,900 (individual) but offers a more generous wildcard exemption ($1,475 + up to $13,950 of unused homestead). If you do not own a home, federal exemptions may protect more of your other property.

Frequently Asked Questions

What is the income limit for Chapter 7 in New York?

The means test uses New York's median income: $66,973 for 1 person, $82,282 for 2, $97,878 for 3, $119,164 for 4. Below the median means automatic qualification. Above-median filers may still qualify after allowed expense deductions.

Can I choose between state and federal exemptions?

Yes. New York allows debtors to choose. State homestead: $179,975--$215,550 by county. Federal homestead: $27,900. The federal wildcard may be better if you do not own a home.

How often can I file Chapter 7?

You must wait 8 years between Chapter 7 filing dates. If you received a Chapter 13 discharge, you must wait 6 years unless you paid 100% of unsecured claims or 70% in a good-faith plan. Check with the 1328(f) screener.

Where do I file in New York?

The S.D.N.Y. has courthouses at One Bowling Green in Manhattan and 300 Quarropas Street in White Plains. Filing is typically done electronically through an attorney's CM/ECF account.