Seasonal Work and the Bankruptcy Means Test
One of the most frustrating conversations we have with clients goes like this:
Client:
“There’s no way I can afford a payment. I’m barely getting by.”
Then we calculate the Means Test and it shows income that looks… much higher.
Client:
“But I’m not making that now! That was during busy season.”
If you work seasonal employment — construction, landscaping, retail, hospitality, tax preparation, farming, education support, tourism, or any industry with peak months — this situation is very common.
Let’s talk about why this happens and what it really means.
Why the Means Test Doesn’t Reflect What You’re Making Right Now
The Bankruptcy Means Test does not use your current income.
It uses your average income over the last six full calendar months before filing.
This is called your Current Monthly Income (CMI) — and the name is misleading. It does not mean “what you’re currently earning.”
It means:
Total gross income received in the last six full months ÷ 6
That’s it.
The form does not ask:
- Are you in your slow season?
- Did overtime just end?
- Was that holiday rush temporary?
- Was that bonus a one-time event?
It simply averages the past six months.
How Seasonal Work Skews the Numbers
Let’s say:
- You earn $7,000/month during peak season.
- You earn $2,500/month during slow season.
- You file during slow season.
If the six-month lookback includes four busy months and two slow months, the Means Test average might show:
$5,500/month income.
But you are now living on $2,500/month.
That difference can be massive when calculating:
- Median income qualification
- Disposable income
- Presumption of abuse
The Means Test may make it appear that you have money available — when in reality, your income has already dropped.
Why the Law Is Written This Way
The six-month lookback was created in 2005 under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).
Congress wanted a standardized formula to prevent people from:
- Quitting jobs right before filing
- Artificially lowering income
- Manipulating timing to qualify for Chapter 7
So instead of using current paystubs, they created an average.
The goal was predictability.
But for seasonal workers, commission-based employees, and people with fluctuating hours, that average can distort reality.
What Happens If the Means Test Shows Too Much Income?
If the average income pushes you:
- Over your state’s median income, or
- Into a “presumption of abuse” calculation,
it does not automatically mean you cannot file Chapter 7.
It means we look deeper.
It Doesn’t Stop at the Math
Here’s the part many people don’t realize:
The Means Test is not the only analysis.
If your income has dropped and is genuinely lower going forward, we can examine:
1. Current Income vs. Historical Income
Your bankruptcy schedules (separate from the Means Test) reflect your actual current monthly income.
Trustees understand that seasonal work fluctuates.
If you are now in a slow period and that slowdown is legitimate and expected to continue for a meaningful period, that matters.
2. Timing Strategy
Sometimes timing makes a major difference.
If we wait until:
- More slow-season months fall into the six-month lookback window,
- The higher months fall out of the calculation,
the Means Test average may drop significantly.
Filing one or two months later can completely change the outcome.
This isn’t manipulation — it’s strategic and lawful timing.
3. Special Circumstances
In certain cases, the law allows adjustments for circumstances that make the six-month average misleading.
Seasonal income drops can sometimes be addressed through deeper legal analysis, especially when the high-income period is clearly temporary.
Why Clients Feel Confused (And Frustrated)
From your perspective:
- You know what’s in your bank account.
- You know what your bills are.
- You know you’re struggling.
Then a legal form says you “make” far more than you’re actually bringing home right now.
It feels disconnected from reality.
That frustration is valid.
The Means Test is a formula. Real life is not.
Does Seasonal Income Mean You Can’t File Chapter 7?
Absolutely not.
It means we have to:
- Analyze your income pattern carefully.
- Review the timing.
- Look at your full financial picture.
- Consider both Chapter 7 and Chapter 13 options.
Many seasonal workers successfully file Chapter 7.
Others benefit from Chapter 13 structured around fluctuating income.
The key is understanding the rhythm of your earnings.
The Most Important Takeaway
If you work seasonal employment and are thinking:
“The numbers don’t reflect my real situation.”
You are probably right.
That’s exactly why a detailed review matters.
Online calculators do not understand:
- Construction seasons
- Holiday retail spikes
- Tourism cycles
- Overtime fluctuations
- Commission swings
- School-year employment
But we do.
Bankruptcy Is About Reality, Not Just Averages
The Means Test is a screening tool.
It is not a moral judgment.
It is not the final answer in every case.
If your income fluctuates, your case requires thoughtful planning — not assumptions.
The question isn’t:
“What did I make six months ago?”
The question is:
“What does my financial life actually look like now — and going forward?”
That’s the analysis that truly matters.
If you’re dealing with seasonal income and mounting debt, we can walk through the numbers carefully and develop a strategy that reflects your real-world situation — not just a mathematical average.
