The ‘means test’ calculates the disposable income of debtor’s household using the B22 form for Chapter 7 and Chapter 13. The purpose of the calculation is to determine debtor’s eligibility for bankruptcy relief. For instance, if debtor’s household consists of himself alone, his household size is one. If his annual income is over $48,000, in California, his household income is over the state median for a household of one. If he had a wife and 3 minor children, then his household size would be five and the relevant median income is about $86,000. In both cases, if the household income were below the state median, debtor would certainly qualify for Chapter 7 relief. If the household income were over the state median, debtor would have to ensure that he has enough eligible deductions to eliminate disposable income so that no presumption of abuse exists.

So, the household size is important to qualifying for bankruptcy relief because the bigger the size of the household, the bigger the eligible deductions. A single debtor with a household size of one and a gross income of $60,000 a year may end up in a Chapter 13 instead of a Chapter 7. But that same debtor’s household size was two, he would have no problem qualifying for a Chapter 7 because of a bigger household size. But how do you determine what the correct household size is? A debtor may have two adult children, one 27 years old who is a student and not working, another 28 years old who has part time employment making $500 a month but both still living with him in his house. If debtor files for Chapter 7 relief and claims that his household size is three because he has two children who still live with him, albeit adults, and the trustee objects to his claim of household size saying that his household size is only two excluding the 28 year old who has part time income, then who is correct? Is debtor’s household size three or two? If his household size is three he would be eligible for Chapter 7 relief, but if it were two, his case would have to be converted to Chapter 13 and he would have to pay a portion his debts of 36 to 60 months.