German YusufovApril 7, 2026

Debt relief through bankruptcy can stop collection calls, pause a foreclosure, and give you the room to breathe again. For business owners, the law can also keep doors open while debts get reworked. At Yusufov Law Firm PLLC, serving Mesa, Phoenix, and Tucson, we help individuals and businesses work through tough money problems and get back on steady ground.

We have handled a wide range of issues, from medical bills and credit card lawsuits to distressed companies that need a plan that fits their goals. Every situation is different, so we build a path that fits your facts. This article explains the Arizona bankruptcy means test, who is exempt from the test, and what happens if you need to complete it.

What is the Means Test?

The means test is a mathematical calculation of disposable income that must generally be completed by individuals filing for Chapter 7 bankruptcy.  The purpose of the test is to determine if the person filing for Chapter 7 bankruptcy has the means to pay his or her creditors.  If the person filing has the means to pay creditors, then he or she is not eligible for Chapter 7, but can file another type of bankruptcy, like Chapter 13.  If the test shows that the person has the means to pay creditors, we say that the person “failed the means test.”  And if the test shows that the person does not have the means to pay creditors, we say that the person “passed the means test.”

Who is Exempt from the Means Test?

Not everyone needs to complete the means test. The law carves out a few groups, and if you fit one of them, you can often file Chapter 7 without the full calculation. Here are the most common exemptions.

Debts That Are Not Primarily Consumer Debts

If most of your debt is not personal or household in nature, you can be exempt from the means test. Non-consumer debt includes business loans, personal guarantees on business credit lines, and debts tied to investment property. Large tax debts and some tort claims can also fall into the non-consumer bucket.

If you are unsure whether your debts are mainly business or consumer, talk with a bankruptcy lawyer before you file. One small change in the mix can swing the exemption either way.

Disabled Veterans

Disabled veterans can qualify for an exemption when their debts were incurred while on active duty or while performing a homeland defense activity. Congress created this exception for Qualifying Service Members and Veterans. If this applies to you, you can usually proceed without the means test.

Keep any records that show the timing of debts and your service status. Clear paperwork helps avoid delays in court.

Income Below Arizona Median

If your household income falls under the Arizona median for your household size, you are generally exempt. The figures are updated a few times each year using U.S. Census Bureau data. You compare your six-month average income to the current chart for Arizona.

If your average is lower than the one listed in the chart, you pass this step. You can still choose Chapter 13 if it better fits your goals, but Chapter 7 remains available.

How to Determine if Your Income is Below the Arizona Median

The median income data comes from the U.S. Census Bureau and is updated periodically. Courts and trustees use the version posted on the U.S. Courts website at the time you file. Your job is to calculate your six-month average and then compare it to the current Arizona chart.

Add up your gross income for the six full calendar months before your filing month, then divide by six. If you are married, count both spouses’ income, even if only one person is filing. This combined figure is called the current monthly income under the bankruptcy forms.

Income to include typically covers the following sources:

  • Wages, salary, overtime, and bonuses
  • Business income if you are self-employed
  • Rental income after necessary rental expenses
  • Child support received
  • Spousal support received
  • Pension and retirement plan distributions
  • Unemployment compensation

Social Security retirement and SSI are not counted in this part of the test. VA disability payments are generally excluded as well.

What Happens if Your Income is Above the Arizona Median?

If your average income is higher than the Arizona median, you must complete the full means test. The forms you will use include Official Form 122A-1 and, if needed, Official Form 122A-2. These forms look at income and allowed expenses to see if you have enough disposable income to repay creditors.

The calculation subtracts a set of allowed expenses from your current monthly income. Some deductions use standard amounts from federal tables, and others reflect your actual spending. The result is a number that shows whether a Chapter 7 filing is presumed abusive or not.

Allowable Deductions in the Means Test Calculation

The means test permits a range of paycheck and household deductions. Some are based on national or local standards published by the IRS and Bureau of Labor Statistics, and others rely on your actual figures. Here are common categories you can claim.

  • Payroll taxes, Medicare, and Social Security withholding
  • Health, dental, and vision insurance premiums
  • Term life insurance premiums
  • Mandatory retirement contributions 
  • Mortgage and car loan payments

You can also list necessary monthly expenses that support your household. Keep records for each item to back up the numbers if a trustee asks for proof. Common entries include the following:

  • Childcare or eldercare 
  • Expenses required for work
  • Out-of-pocket medical costs, like prescriptions and copays
  • Education expenses required by a job or for a disabled child
  • Court-ordered child support and spousal support payments

Housing, utilities, food, clothing, and transportation are often used in standard expense tables. If your actual costs are higher for a documented reason, the forms give a way to explain that variance. Good documentation helps here, such as leases, invoices, and service contracts.

What Happens if You Fail the Means Test?

Failing the means test means Chapter 7 is not available right now. You still have a strong path in Chapter 13. Chapter 13 is a court-approved plan that repays part of your debt over three to five years, often at a fraction of the original balance.

Payments depend on your income, allowed expenses, and the type of debts you have. Many individuals save a home or car through Chapter 13, or cure arrears over time. Filing also stops lawsuits and garnishments while the plan is active.

Considering Bankruptcy? Contact Us Today!

At Yusufov Law Firm PLLC, we focus on real solutions that fit your life, whether you are in Mesa, Phoenix, or Tucson. If you want clear guidance on the means test or which chapter works best, feel free to call us at our Tucson office at 520-745-4429 or our Mesa/Phoenix office at 480-788-0098. You can also reach us through our Contact Us page to schedule a consultation. We welcome your questions, and we are ready to help you move forward with confidence.