Once your income lands above the median for your state, the means test stops asking what you actually spend and starts running your numbers through a set of standardized allowances instead. Some of those allowances are flat, national figures for things like food and clothing. Others vary by where you live and cover housing and transportation. On top of those, you also get to subtract your real secured and priority debt payments. Add it all up, and what's left is your "disposable income" under the formula - the number that decides whether the law presumes Chapter 7 is the right fit for you. None of the specific dollar figures are fixed; they update on a regular schedule, so this article explains how the pieces fit together and exactly where to look up the live numbers.
This is part two of a two-part explanation. If you haven't already, start with our guide to the Chapter 7 means test for the first step - comparing your six-month average income to your state's median - and see the means test when your income is above the median for how the full disposable-income result gets judged against the statute's thresholds. This page zooms in on the expense side of the calculation: where the standards come from, how each category works, and the traps people hit filling them out.
First, a quick reminder about the six-month look-back
Everything in the means test starts with "current monthly income," or CMI - a defined term under 11 U.S.C. § 101(10A). It's generally the average of your gross household income over the six full calendar months immediately before the month you file, not what you're earning the week you sit down with an attorney. Because it's a look-back average, a recent job loss or a recent raise may not show up the way you'd expect; the months before the change still count. Social Security income is excluded from CMI by statute, but most other income sources are included.
That six-month average, annualized, is what gets compared to your state's median-income figure by household size. Only filers who land above that median move on to the expense-standard calculation covered here - if you're at or below the median, this part of the form generally doesn't apply to you.
Where the expense standards actually come from
The allowances used on the expense side of the means test aren't invented by the bankruptcy system. They trace back to the IRS's collection-financial-standards program, which the IRS itself uses when evaluating a taxpayer's ability to pay overdue taxes. The food, clothing, and personal-care figures are built from Bureau of Labor Statistics consumer spending survey data; the housing, utility, and transportation figures blend Census and BLS data by region, state, and county. The Department of Justice's U.S. Trustee Program then adopts and republishes the current versions of these figures specifically for means-test use, and updates them on its own periodic schedule - a schedule that does not line up with the IRS's own update calendar. That's the version you need for a bankruptcy filing.
Because two different agencies maintain versions of similar-sounding standards for different purposes, don't assume a number you find on a tax-collection page is the one that applies to your bankruptcy case. Go to the U.S. Trustee Program's means-testing page and use the figures published there.
National Standards: food, clothing, and the other flat allowances
National Standards are flat dollar allowances that don't vary by where you live - only by household size (and, for one category, age). They're generally grouped into a small set of categories: food, housekeeping supplies, apparel and services, personal care products and services, and a miscellaneous catch-all, plus a separate allowance for out-of-pocket health care expenses.
You get the full standard amount regardless of what you actually spend. If your real grocery bill is lower than the National Standard, the form still credits you with the standard figure - this is one of the few places in bankruptcy math that can work in a filer's favor.
Health care is handled a bit differently. The health care allowance is also based on standardized, age-adjusted amounts, but the form has its own rules about when actual out-of-pocket costs can be used instead of, or in addition to, the standard figure. This is a detail worth confirming with the current form instructions or an attorney rather than assuming.
Local Standards: housing, utilities, and transportation
Local Standards work differently - they're set by county or metropolitan area, so two filers with identical incomes in different parts of the country can end up with different allowed deductions.
Housing and utilities. This allowance reflects typical housing and utility costs for your area and household size. How your actual mortgage or rent payment interacts with the standard figure involves technical rules that courts have not always applied the same way, and getting it wrong can change your result - this is a good line item to have a bankruptcy attorney check rather than estimate on your own.
Transportation - operating costs. A separate, regional allowance covers the day-to-day cost of operating a vehicle (gas, maintenance, insurance, and similar), available if you have a vehicle, regardless of whether you owe money on it.
Transportation - ownership costs. This is where a well-known trap sits. The ownership-cost allowance is meant to offset a car loan or lease payment. In Ransom v. FIA Card Services, N.A., 562 U.S. 61 (2011), the Supreme Court held that a filer who owns a vehicle free and clear - no loan, no lease - cannot claim the ownership-cost allowance, because there's no actual ownership expense for it to replace. You can still claim the operating-costs allowance for a paid-off car; you just can't also claim ownership costs you're not actually paying.
The trap: standards aren't a substitute for actual, documented debts
It's tempting to treat the National and Local Standards as your whole housing and living-expense picture, but they only cover the categories listed on the form. Real, documented monthly payments on debts you're keeping - and certain debts the law prioritizes - are handled separately, in addition to the standards.
What gets added on top: actual secured and priority debt payments
After the standardized allowances, the form has you subtract your real, documented payments in two more categories:
Secured debt payments. Your actual monthly payment on debts secured by property you intend to keep - typically a mortgage or a car loan - averaged over a 60-month period, plus any amount needed to catch up on a past-due balance (an arrearage) on that debt.
Priority debt payments. Obligations the Bankruptcy Code requires to be paid ahead of most other debts, such as certain recent tax debts or domestic-support arrears, also spread over 60 months.
Unlike the National and Local Standards, these two categories are not flat allowances - they're based on your real numbers, backed up by loan statements, mortgage statements, and court orders. Bring documentation, not estimates.
Putting it together: what the final number does
Subtract the National Standards, the Local Standards, your actual secured and priority debt payments, and a handful of other narrower categories (things like mandatory retirement contributions, union dues, term life insurance premiums, and court-ordered support) from your current monthly income, and what's left is your monthly disposable income under the formula. Multiplied by 60, that figure is measured against thresholds written into 11 U.S.C. § 707(b)(2). Because those breakpoints are periodically adjusted, this article intentionally doesn't quote them - see the means test when your income is above the median for how that comparison works and what it means if the presumption of abuse arises.
Where to find the live tables
Always pull the current figures immediately before you rely on them - not from an old printout, a forum post, or this article:
DOJ U.S. Trustee Program (justice.gov/ust) - the official means-testing page publishes the current National Standards, Local Standards by state and county, and median-family-income tables by state and household size, updated on their own schedule.
U.S. Courts (uscourts.gov) - the official Chapter 7 means test forms (Form 122A-1 and Form 122A-2) and instructions, which explain exactly how each standard is applied line by line.
Your state's exemption statutes - a separate question from the means test entirely: what property you actually get to keep. Those dollar amounts are adjusted periodically too, so check your own state's current statute rather than assuming a figure.
What to do
Confirm you're actually in Step 2 - the expense standards only matter if your six-month average income is above your state's median for your household size. If you're at or below it, most of this page doesn't apply to your case.
Pull the current National and Local Standard tables from justice.gov/ust for your household size and county as close to your filing date as possible.
Gather documentation for your actual secured and priority debt payments - mortgage or loan statements, tax notices, and support orders - since those categories aren't flat allowances.
Complete a credit counseling course from a U.S. Trustee-approved agency. This is a hard, separate deadline: with narrow exceptions, you generally must complete an approved course within the 180 days before filing, or your case can be dismissed. The U.S. Trustee Program's website lists approved agencies by state.
Have a bankruptcy attorney review the completed form before you file, especially the housing-standard interaction and the vehicle-ownership line - these are common, technical sources of means-test errors that can affect whether your case is presumed to qualify.
If cost is a barrier, look into legal aid organizations, law-school bankruptcy clinics, and your local bankruptcy court's self-help resources, several of which are linked from uscourts.gov.
Beware of scams and unauthorized advice
People working through means-test paperwork are often under real financial pressure, which makes them a target. Be wary of for-profit debt-settlement or "debt relief" companies that promise to erase your debt outside of bankruptcy for a large upfront fee - the Federal Trade Commission has pursued enforcement against operations like this, and they are not a substitute for the legal protections bankruptcy provides. Also be cautious of non-attorney "bankruptcy petition preparers": by law they may only type your paperwork, not tell you which standard applies to your situation or how to fill out the form, and many illegally cross that line anyway. A licensed bankruptcy attorney, a legal aid office, a law-school clinic, or your court's self-help center are safer places to get this form reviewed.
This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. Means-test calculations are technical and mistakes can affect whether your case qualifies - consider consulting a qualified bankruptcy attorney, or a U.S. Trustee-approved credit counseling agency, before relying on any figures you calculate yourself.
Frequently asked questions
Do I get to deduct what I actually spend on groceries and clothes?
No. For the National Standards categories - food, housekeeping supplies, clothing and personal care - the means test uses a flat, IRS-derived allowance based on your household size, not your real receipts. You get the same deduction whether you spend more or less than that amount.
What if my rent or mortgage is higher than the Local Standard for my area?
Housing and utilities have their own wrinkle: the form generally lets you use the greater of the Local Standard or your actual mortgage/rent payment in certain circumstances, but the details are technical and courts have not always agreed on how to apply them. This is a good question to bring to a bankruptcy attorney rather than guess on your own.
I own my car outright with no loan - can I still claim the vehicle ownership allowance?
Generally no. In Ransom v. FIA Card Services (2011), the Supreme Court held that the ownership-cost allowance is only available to filers who actually make a loan or lease payment. If you own your car free and clear, you can still claim the separate operating-costs allowance, just not ownership costs.
Where do the National and Local Standard dollar amounts come from?
They originate with the IRS, which builds them from Bureau of Labor Statistics consumer spending data (for National Standards) and Census/BLS regional data (for Local Standards). The Department of Justice's U.S. Trustee Program republishes the current figures for bankruptcy use at justice.gov/ust, typically updating them a few times a year.
Are these the same numbers used for IRS tax collection?
They're closely related but not always identical in application. The IRS uses similar National and Local Standards when evaluating offers in compromise and payment plans, but the bankruptcy means test applies them under its own statutory rules. Don't assume a figure quoted for one purpose automatically applies to the other - check the version published for means-test use.
This article is general legal information, not legal advice, and may not reflect the most current law or the law in your jurisdiction. Laws vary by state and change over time. For advice about your specific situation, consult a licensed attorney.
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