Exemption from the means test for non-consumer debts

All debtors are not required to pass the means test.

11 U.S. Code Section 707(b) allows for Chapter 7 bankruptcy cases to be dismissed or converted to Chapter 11 or Chapter 13 bankruptcy if the Chapter 7 case if the Debtor’s debts are “primarily consumer debts” and if granting relief would be an “abuse” of the bankruptcy code.

If the debts are not primarily consumer debts, then typically the Debtor is not required to complete and pass the means test; even if their income is above the median income.

What is a consumer debt for bankruptcy purposes? 11 U.S. Code Section 101(8) provides that consumer debt is debt incurred by an individual for a personal, family, or household purpose. A non-consumer debt, for this exemption from the means test, typically is a business-related debt. If a debtor owned their own business and incurred a debt for that business, then that debt may be a non-consumer debt for purposes of this means test exemption.

In order to figure out if this exemption from the means test applies in your case, the Debtor will need to be able to categorize each of their debts as a “consumer” or “non-consumer” debt. It is also important to be able to document why a specific debt is a non-consumer debt. From there, the Debtor and their attorney will determine whether their debts are “primarily” consumer debts or not.

It can take quite a bit of documentation to successfully prove that this exemption from the means test applies in your bankruptcy case. It is still less documentation, though, than you would likely have to provide if you were required to submit the long form means test.


Elizabeth Rosar Chermack is a bankruptcy lawyer with an office in Burnsville, and can help you analyze whether an exemption to the bankruptcy means test applies to you. Call (952) 491-0390 or send an email to liz@chermacklaw.com to schedule a consultation.

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