Chapter 7 Bankruptcy Income Limits and the Means Test

Chapter 7 bankruptcy income limits are not a single national number. You qualify if your household’s annualized income for the past six months falls below the median income for your state and household size, and if it doesn’t, you can still qualify by passing a means test that subtracts allowable expenses from your income to see whether you have enough left over to repay creditors. For cases filed between November 2025 and March 2026, the single-filer state median ranges from about $52,594 in Mississippi to $86,314 in Washington, and a family of four spans roughly $91,270 in West Virginia to $173,947 in Massachusetts.¹ Earning above your state median doesn’t disqualify you. It just moves you to a second, more detailed test.

The State Median Income Check

Start with a simple calculation. Add up your household’s gross income from the six months before you plan to file, divide by six to get a monthly average, then multiply by twelve. Compare that annualized figure to the median income the U.S. Trustee Program publishes for your state and household size.² These figures come from Census Bureau data and change periodically, so the number that applies to your case depends on your filing date.

Fall below the median and you qualify on income. The means test doesn’t apply. For many filers, this is where the eligibility analysis ends.

Some representative state medians for cases filed between November 1, 2025, and March 31, 2026:¹

California: $77,221 single filer / $135,505 family of four
Texas: $65,123 single filer / $114,938 family of four
Florida: $68,085 single filer / $111,819 family of four
New York: $71,393 single filer / $135,475 family of four
Illinois: $71,304 single filer / $134,366 family of four

For households larger than four, add $11,100 for each additional person.¹ The full state-by-state table is on the U.S. Trustee Program’s website.

What Counts as Income

The figure used for the median comparison is called current monthly income, and it captures more than wages. Federal law defines it as the average monthly income from all sources received during the six months before filing.³ Included: wages, salary, tips, bonuses, net business income, rental income, investment dividends, interest, pension and retirement distributions, and unemployment compensation.

One easily overlooked source: regular contributions to your household expenses from a non-filing partner, family member, or roommate count toward your total. If someone consistently pays part of your rent or utilities, that money goes in.³

Social Security is the significant exclusion. The statute carves it out entirely, so retirement, SSDI, and survivor benefits don’t count toward current monthly income.³ For retirees and disabled individuals living primarily on Social Security, that exclusion alone often keeps them under the median.

The Marital Adjustment

Married but filing alone? Your spouse’s income initially gets included in your current monthly income figure. You can then subtract any portion of your spouse’s income not regularly used for your household expenses or the expenses of your dependents.⁴ Money a spouse uses for their own separate tax obligations, student loans, or expenses for a separate residence due to work can come out. This adjustment matters most when only one spouse carries the consumer debt.

Household Size and Why It Matters

Household size controls which column of the median table applies to you, so getting the count right is worth some care. The Bankruptcy Code doesn’t define “household” with perfect clarity, and courts have taken different approaches. The most common is the Census Bureau method, which counts everyone whose primary residence is your home, whether or not you claim them as tax dependents. Children, stepchildren, an elderly parent living with you, or any other permanent resident all increase the count.

A larger household means a higher threshold, which makes qualification easier. A single Texas filer faces a $65,123 median. A Texas household of four faces $114,938.¹ If your count is contested, the court in your district will apply whichever method it follows, so check the local approach before filing.

The Means Test for Above-Median Earners

Earning above your state median doesn’t end the case. It triggers a detailed calculation called the means test, which is the heart of Chapter 7 income limits for higher earners.⁵ The test asks whether, after paying necessary expenses, you have enough disposable income left to make meaningful payments to creditors through a Chapter 13 plan instead.

The math: take your current monthly income, subtract the allowable expenses, and multiply what remains by 60 (a five-year repayment horizon). If that five-year total is below $10,275, you pass. If it reaches $17,150 or more, the court presumes filing Chapter 7 is an abuse of the system, no matter how much debt you’re carrying.⁶

If your five-year disposable income lands between those two numbers, the result depends on your total unsecured debt. You still pass if 25 percent of what you owe unsecured creditors exceeds your projected disposable income.⁵ Small differences in expense deductions can tip the answer in this middle zone.

Triggering the presumption of abuse doesn’t permanently bar you from bankruptcy. Usually it means the court expects you to convert your case to Chapter 13 and repay a portion of your debts over three to five years.

The Expense Deductions That Actually Decide the Test

The expense side is where most above-median filers still qualify. The deductions combine standardized allowances with actual costs, and they’re often more generous than people expect.

Standardized living expenses come from data the U.S. Trustee Program publishes, split between national and local components.² National standards cover food, clothing, personal care, and similar household costs by household size. Local standards cover housing, utilities, and transportation and vary by county to reflect regional cost-of-living differences. Out-of-pocket healthcare gets its own allowance. You claim these standardized amounts whether or not you actually spend that much.

On top of the standardized allowances, you deduct actual amounts for:

Income taxes and payroll withholdings, including Social Security, Medicare, and state and local taxes actually withheld
Secured debt payments such as your mortgage and car loans
Priority debts like back child support, alimony, and certain tax obligations, divided over 60 months
Childcare and dependent care while you work
Term life insurance premiums and mandatory employment-related costs
Reasonably necessary education expenses for disabled children

Combined, these deductions routinely bring disposable income low enough to eliminate the presumption of abuse.⁵ Filers earning $80,000 or $90,000 a year commonly pass once a mortgage, car payment, taxes, and childcare come off the top.

The Totality of Circumstances Backstop

Passing the means test doesn’t guarantee your case survives. A court can still dismiss a Chapter 7 filing for abuse based on the overall picture of your finances, even when the numbers on the form work out.⁵ This is the “totality of the circumstances” analysis.

Courts look at things like voluntarily hanging onto expensive luxury items (boats, recreational vehicles, second homes) while claiming inability to pay creditors, or budgets that reflect an unwillingness to trim any spending. A filer who technically passes but is financing a $60,000 truck used for weekend camping may face questions. It’s a safety valve rather than a routine obstacle, but it does mean stacking deductions while keeping a lavish lifestyle carries real risk.

Who Skips the Income Analysis Entirely

Three categories of filers bypass the income test regardless of what they earn.

Disabled Veterans

If you’re a disabled veteran and your debts were primarily incurred while you were on active duty or performing a homeland defense activity, no means testing applies.⁵ You claim the exemption on Form 122A-1Supp by stating your veteran status and the timing of your debts.⁷

Activated Reservists and National Guard Members

Reservists and National Guard members called to active duty after September 11, 2001, who served at least 90 days, are exempt from means testing during their service and for 540 days after release.⁵ The window gives returning service members time to stabilize before facing the standard income hurdles.

Primarily Business Debtors

The means test and the income-based presumption of abuse apply only when your debts are “primarily consumer debts.”⁵ If more than half your total debt comes from business activity, whether failed business loans, personal guarantees on commercial leases, or equipment financing, your income doesn’t affect Chapter 7 eligibility. Owners who close down a business and are left with six figures in commercial debt often take this route.

1
U.S. Trustee Program. Census Bureau Median Family Income By Family Size
2
United States Department of Justice. Means Testing
3
Office of the Law Revision Counsel. 11 USC 101 – Definitions
4
United States Courts. Official Form 122A-2 Chapter 7 Means Test Calculation
5
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
6
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
7
United States Courts. Official Form 122A-1Supp – Statement of Exemption from Presumption of Abuse Under 11 USC 707(b)(2)