In late 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted into law. Among other things, this act requires a “means test” to see if debtors qualify for Chapter 7 bankruptcy relief. The means test examines your monthly income and expenses and compares them to the median income in and around your area.
Typically, if you make less than the median income for a family of your size, you are allowed to file Chapter 7. If your income exceeds the median income, you may not be allowed to file Chapter 7, but may be allowed to file Chapter 13, which may require repayment of some of your debts within three to five years.