Chapter 7 Income Limits: State Median, Means Test, and Exemptions

Chapter 7 income limits aren’t a single national number. You qualify in one of two ways: your household income falls below the median for your state and family size, or it’s above that median but a detailed calculation called the means test shows you don’t have enough left over each month to repay creditors. For cases filed on or after April 1, 2026, the state medians for a single-person household run roughly $54,000 to $89,000 a year, with higher figures for larger households.¹

The Two-Step Income Screen

Step one is a comparison. Take your average gross monthly income from the six months before you file, multiply by 12, and set it next to the median income for a household your size in your state. Below the median, you pass. You can file Chapter 7 without going further on income.

Above the median, you move to step two. The means test subtracts a set of standardized living expenses from your monthly income and projects what’s left over a five-year window. If the leftover is small enough, you still qualify. If it’s large enough, the court presumes you can afford a repayment plan and pushes you toward Chapter 13 instead.²

Where Your State’s Median Falls

The U.S. Trustee Program publishes updated median income tables using Census Bureau data. The figures below apply to cases filed on or after April 1, 2026.³

One-person household: roughly $54,000 to $89,000 per year, depending on the state
Two-person household: roughly $69,000 to $115,000 per year
Three-person household: roughly $82,000 to $142,000 per year

Each additional household member above four typically adds several thousand dollars. The full state-by-state table is on the U.S. Trustee Program’s website and is the exact data used on the official bankruptcy forms.¹ Look up your state before assuming you’re over or under. The median runs higher in some areas than people expect.

What Counts as Your Income

The bankruptcy code defines “current monthly income” as the average of all gross income you received in the six full calendar months before the month you file.⁴ File in July, and you average January through June. The calculation reaches beyond your paycheck. It covers business income, rental income, pension payments, and regular financial contributions from anyone in your household who helps pay expenses.

One category is specifically excluded. Social Security benefits don’t count toward current monthly income.⁴ For retirees and disabled people living mostly on Social Security, that exclusion by itself often drops them below the median.

The six-month lookback matters in another way. A recent job loss, pay cut, or hours reduction can work in your favor, because the calculation reflects what you actually earned in that specific window rather than what you used to earn. If your income has recently dropped, timing your filing a few months after the drop can make a real difference.

You report the figure on Official Form 122A-1, the Chapter 7 Statement of Your Current Monthly Income.⁵ If your annualized number is below your state’s median, the income analysis ends there. If not, you fill out Form 122A-2 for the means test.

The Means Test If You’re Over the Median

The means test doesn’t let you deduct whatever you actually spend. It uses IRS National Standards for food, clothing, and personal care, and IRS Local Standards for housing, utilities, and transportation that vary by county.⁶ On top of those standardized figures, you deduct actual payments on secured debts such as mortgages and car loans, required tax payments, and certain priority obligations like child support.

Whatever is left after those deductions is your monthly disposable income. The test then multiplies that number by 60, representing a five-year repayment window, and compares the result to two dollar thresholds. For cases filed on or after April 1, 2025, those thresholds are $10,275 and $17,150.⁷

Five-year disposable income below $10,275 (roughly $171 per month or less): no presumption of abuse, and you pass.
Five-year disposable income of $17,150 or more (roughly $286 per month or more): presumption of abuse applies regardless of your debt level.
Between $10,275 and $17,150: whether you pass depends on how that figure compares to 25% of your nonpriority unsecured debts. If your disposable income over five years could cover at least 25% of those debts, the presumption applies.

These dollar amounts adjust periodically for inflation, so check the current figures before filing.² The standardized approach also means the result isn’t something you can eyeball from your bank statements. The allowed expenses are what the IRS says a household in your county should spend, not what you actually spend.

Who Doesn’t Have to Take the Means Test

Three groups skip the income screen entirely, regardless of what they earn:

Filers with primarily business debts. If more than half your total debts came from business activities rather than personal spending, the means test doesn’t apply. This is the most commonly used exemption.⁷
Qualifying military service members. Members of the National Guard or reserves who served on active duty or homeland defense for at least 90 days are exempt for a period following their service.
Disabled veterans whose debts were incurred primarily while on active duty or performing homeland defense activities.

If any of these apply, your income doesn’t gatekeep your Chapter 7 case.

If You Fail the Means Test

Triggering the presumption of abuse doesn’t end the case automatically, but it opens the door for the U.S. Trustee or the court to move for dismissal. From there you have two realistic paths: convert to Chapter 13 and repay creditors through a three-to-five-year plan, or try to rebut the presumption.

Rebutting it requires showing “special circumstances” that justify additional expenses or income adjustments the standard means test doesn’t capture.⁷ The statute names two examples: a serious medical condition and a call to active military duty. You’ll need detailed documentation showing why those circumstances create expenses the standard allowances don’t cover, and that the extra expenses are large enough to drop your disposable income below the threshold. Courts scrutinize these claims closely.

For most filers who fail the means test, converting to Chapter 13 is the practical move. The debts aren’t discharged immediately, but qualifying balances left after a court-approved repayment plan are wiped out at the end.

Income Isn’t the Only Thing That Can Block a Filing

Passing the income screen doesn’t automatically mean you can file. Two other requirements catch people regularly.

If you received a Chapter 7 discharge in a prior case, you cannot receive another one unless at least eight years have passed since that earlier case was filed.⁸ The clock runs from the prior filing date, not the discharge date.

Every individual filer must also complete credit counseling with an approved nonprofit agency within 180 days before filing, and submit the certificate of completion with the petition.⁹ The U.S. Trustee Program maintains a list of approved providers by state.¹⁰ A second course, debtor education, is required after filing but before any debts are discharged.¹¹ Both are required even if your income puts you well under the median.

1
United States Department of Justice. Census Bureau Median Family Income By Family Size
2
United States Courts. Chapter 7 – Bankruptcy Basics
3
United States Department of Justice. Means Testing
4
Office of the Law Revision Counsel. 11 USC 101 – Definitions
5
United States Courts. Official Form 122A-1 Chapter 7 Statement of Your Current Monthly Income
6
Internal Revenue Service. Collection Financial Standards
7
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
8
Office of the Law Revision Counsel. 11 USC 727 – Discharge
9
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
10
United States Department of Justice. List of Credit Counseling Agencies Approved Pursuant to 11 USC 111
11
United States Courts. Credit Counseling and Debtor Education Courses