$125,000 Credit Card Debt and $17,000 Monthly Income Trigger Bankruptcy Means Test Review

The debtor's situation centers on whether disability income counts toward the bankruptcy means test under 11 U.S.C. § 707(b). Current monthly income includes most government benefits, but courts apply state-specific median income thresholds and allowable deductions for health-related expenses. Primary records from the Administrative Office of the U.S. Courts show consumer filings increased 7 percent in 2023 amid elevated revolving debt levels tracked by the Federal Reserve's G.19 report.

Competing interests involve creditor recovery versus debtor fresh start. Means-test calculations treat disability income as revenue but permit offsets for medical costs, potentially qualifying the filer for Chapter 7 if net disposable income falls below thresholds. Federal Reserve data indicate credit card balances exceeded $1.1 trillion nationally in late 2023, with health-related income gaps driving a measurable share of filings.

Next steps require a precise six-month look-back calculation and attorney review of state exemptions. If the means test is failed, conversion to Chapter 13 would mandate a three-to-five-year repayment plan calibrated to actual disposable income after allowable expenses.