How to Calculate Monthly Disposable Income for Bankruptcy

To calculate monthly disposable income for bankruptcy, average your income from all sources over the six full calendar months before filing, subtract the deductions the means test allows (mostly IRS-standard allowances plus a few actual-expense categories), and the remainder is the figure that decides whether you qualify for Chapter 7 or how much you must pay through a Chapter 13 plan. The math follows Official Forms 122A-1 and 122A-2 for Chapter 7, or 122C-1 and 122C-2 for Chapter 13.¹ Each line matters. A wrong entry can push you out of Chapter 7 or inflate what you owe in Chapter 13.

Start With Your Current Monthly Income

The Bankruptcy Code defines current monthly income as the average monthly income from all sources during the six full calendar months before your filing date. That includes wages, salary, overtime, bonuses, commissions, self-employment earnings, rental income, interest, dividends, pension distributions, and any other regular income stream, taxable or not.²

Regular contributions from someone outside your household count too. If a parent covers your car payment every month, or a partner pays half the mortgage, add those amounts in.²

A few categories stay out of the total entirely. Social Security retirement and disability benefits are excluded, as are payments to victims of war crimes or terrorism and certain military disability compensation.² If Social Security is your only income, you’ll likely clear the means test without any further math.

The six-month window is where filers trip up. A one-time bonus, overtime burst, or severance paid during those months inflates your average even if your typical earnings run far lower. Waiting a month or two so an unusual paycheck falls out of the lookback can legitimately change the result.

If Only One Spouse Files

Joint filers include both incomes automatically. If you’re married and filing alone, add your non-filing spouse’s income first, then subtract the portion that isn’t regularly spent on the household. A spouse earning $4,000 a month who pays $1,500 toward their own student loans and personal expenses gives you a $1,500 marital adjustment. The form asks you to list each non-household use and the dollar amount allocated to it.³

Check Your State’s Median Income Before Going Further

Annualize your current monthly income (multiply by 12) and compare it to the median family income for your state and household size, published by the U.S. Trustee Program. If you’re below the median, you pass the means test and can file Chapter 7 without completing the rest of the calculation.⁴

The thresholds vary widely. For cases filed on or after April 1, 2026, a single earner in Mississippi must come in below $53,978, while a single earner in Massachusetts has room up to $88,202. A four-person household in Texas has a median of $117,962; in Maryland, it’s $166,173.⁵ Look up the current figure for your state and household size before assuming the rest of this calculation applies to you.

Subtract the Allowed Deductions

If you’re above the median, the means test lets you deduct specific expense categories. Most are standardized IRS allowances rather than your actual spending. A handful are based on what you actually pay.

Payroll Withholdings

Federal, state, and local income taxes come off the top, along with Social Security and Medicare contributions. Mandatory payroll deductions, like union dues, employer-required retirement contributions, and health insurance premiums, also qualify. Use your actual withholding amounts.

IRS National Standards

The IRS publishes fixed monthly allowances for food, clothing, housekeeping supplies, personal care, and miscellaneous expenses. You get the full allowance for your household size without providing receipts, and it doesn’t matter whether you actually spend less. As of February 2026, the combined monthly totals are:⁶

One person: $839
Two people: $1,481
Three people: $1,753
Four people: $2,129
Each additional person: add $394

IRS Local Standards

Housing, utilities, and transportation have separate allowances that vary by location. Housing and utility caps depend on your county and state. Transportation covers both vehicle ownership and operating costs, or public transit if that’s how you commute. These numbers can move the whole calculation. A filer in a high-cost county may deduct roughly twice as much for housing as someone in a rural area with identical income.⁷

Court-Ordered Payments and Past-Due Priority Debts

Current court-ordered obligations such as child support and alimony are deductible at their actual monthly amount. For past-due priority debts owed as of your filing date, including back child support and delinquent taxes, divide the total by 60 to get the monthly deduction.⁸

Charitable Contributions

Donations to qualified religious or charitable organizations are deductible up to 15% of gross annual income. If you’ve consistently given more than that, you may be able to deduct the higher amount by documenting the pattern.⁹

Retirement Loan Repayments

Monthly repayments on a 401(k) or similar qualified retirement plan loan are excluded from disposable income entirely, at the actual payment amount.¹⁰

Chapter 13 Administrative Expenses

If your calculation points toward Chapter 13, you can also deduct projected administrative costs for the plan, mainly the trustee’s fee. The U.S. Trustee Program publishes a multiplier by federal judicial district. For cases filed on or after April 1, 2026, those multipliers run roughly 4.6% to 10%.¹¹

The Full Sequence

Add all income from every source, excluding Social Security and other statutory exclusions, for the six full calendar months before filing. Divide by six.
If married and filing alone, subtract the portion of your non-filing spouse’s income that doesn’t go to the household.
Multiply the result by 12 and compare it to your state’s median for your household size. Below the median, you pass.
Above the median, subtract the deductions above: IRS national and local standards, payroll withholdings, court-ordered support, past-due priority debts divided by 60, retirement loan payments, charitable contributions, and (if applicable) Chapter 13 administrative expenses.
What’s left is your monthly disposable income. Multiply by 60 for the five-year total that gets measured against the abuse thresholds.

What the Result Means for Chapter 7

Multiply your monthly disposable income by 60. The result falls into one of three zones that determine whether filing Chapter 7 triggers a presumption of abuse:¹²

Below $10,275 over 60 months (about $171 a month): no presumption of abuse. Chapter 7 is open to you.
Between $10,275 and $17,150: presumption arises only if that amount would pay at least 25% of your nonpriority unsecured debt. Very high unsecured debt can still get you through.
$17,150 or more over 60 months (about $286 a month and up): presumption of abuse applies regardless of debt level. The U.S. Trustee, a creditor, or the court can move to dismiss.

These thresholds were last adjusted effective April 1, 2025.⁴

Triggering the presumption isn’t necessarily the end of Chapter 7. You can rebut it by showing special circumstances, such as a serious medical condition or a military call-up, that justify expenses the standard deductions don’t cover. You’ll need to itemize each additional expense, provide documentation, give a written explanation of why it’s necessary, and sign everything under oath. If the added expenses bring your 60-month total below the lower threshold, the presumption falls away.¹²

What the Result Means for Chapter 13

When disposable income is too high for Chapter 7, the same figure sets your Chapter 13 payment. If a trustee or unsecured creditor objects, the court can approve the plan only if you commit all projected disposable income to payments for the plan’s duration.⁹

Plan length depends on your income relative to the state median. Below-median filers get a three-year plan. Above-median filers must commit to at least five years.¹³ An above-median filer with $400 in monthly disposable income would pay $24,000 to unsecured creditors over 60 months. Falling short gives the court grounds to reject the plan.

For Chapter 13 purposes, disposable income also excludes child support received on behalf of a dependent child and foster care payments, on top of the Social Security exclusion. Above-median filers must compute reasonably necessary expenses using the same IRS standards from the means test, not their actual spending.⁹

Get the Numbers Right the First Time

Bankruptcy relies on self-reported figures, and courts scrutinize them. A court that finds inaccurate schedules can dismiss the case, deny your discharge, or bar you from refiling for a period. Deliberate concealment or fabrication is a federal crime.¹⁴ Pull your pay stubs for the full six-month lookback, document any outside contributions, and verify your household size, state median, and local standards against the current U.S. Trustee and IRS tables before signing the form.

1
United States Courts. Means Test Forms
2
Office of the Law Revision Counsel. 11 USC 101 – Definitions
3
United States Courts. Chapter 7 Means Test Calculation – Official Form 122A-2
4
United States Courts. Chapter 7 Bankruptcy Basics
5
United States Department of Justice. Median Family Income Table – On or After April 1, 2026
6
Internal Revenue Service. National Standards – Food, Clothing and Other Items
7
Legal Information Institute. IRS Expenses
8
United States Courts. Chapter 7 Means Test Calculation – Official Form 122A-2
9
Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan
10
Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan
11
United States Department of Justice. Chapter 13 Administrative Expenses Multiplier
12
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion
13
United States Courts. Chapter 13 Bankruptcy Basics
14
Office of the Law Revision Counsel. 18 USC 152 – Concealment of Assets; False Oaths and Claims; Bribery