What Is the Max Income for Chapter 7 Bankruptcy?

There is no fixed maximum income for Chapter 7 bankruptcy. Eligibility turns on a two-step calculation called the means test: first, your income is compared to the median for a household of your size in your state, and if you’re above that median, a second calculation looks at whether your income minus standardized expenses leaves enough to repay creditors. Pass either step and you qualify.

The State Median Threshold

The first number to check is your state’s median family income for a household your size. If your annualized income falls at or below it, you pass the means test and the income inquiry stops.

These figures come from Census Bureau data and are published by the U.S. Trustee Program, with updates taking effect periodically throughout the year.¹ For cases filed on or after April 1, 2026, here are some examples of the annual thresholds:²

Alabama: $64,321 (1 earner), $77,451 (2 people), $92,698 (3 people), $106,740 (4 people)
California: $79,253 (1 earner), $102,797 (2 people), $116,541 (3 people), $139,071 (4 people)
New York: $73,272 (1 earner), $92,902 (2 people), $115,579 (3 people), $139,040 (4 people)
Texas: $66,837 (1 earner), $86,714 (2 people), $99,273 (3 people), $117,962 (4 people)

For households larger than four, add $11,100 per additional member.² The full table for every state sits on the U.S. Trustee’s website.

What Counts as Income

The figure compared against the median isn’t your tax return’s wage line. It’s “current monthly income,” defined as the average of all gross income you received during the six full calendar months before you file.³ File on July 15, and the window runs January 1 through June 30. Timing a filing to capture lower-earning months can sometimes change the outcome.

The calculation sweeps in wages, salary, business income, rental income, pension payments, unemployment benefits, and regular contributions anyone else makes toward your household expenses. Taxable or not, it counts.

Income That Doesn’t Count

A few categories drop out. Social Security benefits are the biggest exclusion for most filers, and payments to victims of war crimes or terrorism are also excluded.³

Veterans get a particularly valuable carve-out. The HAVEN Act amended the bankruptcy code to exclude disability compensation, combat-related pay, and survivor benefits paid under federal military and veterans’ statutes, putting them on equal footing with Social Security. A veteran whose total income sits above the state median can pass the means test once service-connected disability pay is pulled out of the calculation.³

If You’re Married and Filing Alone

Your spouse’s income gets pulled into the calculation to the extent it regularly pays household expenses. This surprises many filers who assume only their own paycheck matters. You can take a “marital adjustment” deduction for the portion of your spouse’s income that doesn’t go toward shared costs, such as your spouse’s separate tax obligations or support payments to children from another relationship. Courts scrutinize these deductions, so the split needs to be honest and documented.

If You’re Over the Median: The Disposable Income Test

Being over the median doesn’t disqualify you. It moves you to the second part of the means test, which asks whether your income minus standardized expenses leaves enough to fund a repayment plan. Many above-median filers still qualify at this stage.

The expenses used aren’t your actual spending. They’re standardized amounts set by the IRS and published by the U.S. Trustee Program. National standards cover food, clothing, and out-of-pocket healthcare. Local standards, which vary by county and metropolitan area, cover housing, utilities, and transportation.⁴ You also deduct payments on secured debts like a mortgage or car loan, taxes, mandatory payroll deductions, and childcare costs.

Subtract those allowable expenses from your current monthly income, then multiply the remainder by 60 for a five-year projection. If that total is below $10,275 or below 25% of your unsecured debts (whichever is greater), no presumption of abuse arises and you qualify for Chapter 7. If the total is $17,150 or more, the presumption applies. Between those two thresholds, whether the presumption kicks in depends on the percentage of your unsecured debt you could repay.⁵ Those dollar thresholds were adjusted effective April 1, 2025.⁶

When High Income Still Doesn’t Block Chapter 7

Even when the means test produces a presumption of abuse, two routes remain open.

Special Circumstances

Federal law lets you rebut the presumption by showing special circumstances that justify expense or income adjustments the standard means test doesn’t capture. The statute specifically mentions a serious medical condition and a call to active military duty as examples, though those aren’t the only possibilities.⁵ The bar is high: you must itemize each additional expense, provide documentation, and sign everything under oath. If the adjusted numbers bring your disposable income below the threshold, the presumption is overcome.

The Business Debt Exception

The means test only applies when your debts are “primarily consumer debts.”⁵ If more than half your total debt comes from business activities rather than personal spending, you can file Chapter 7 regardless of income. This is a significant opening for failed business owners, independent contractors, and anyone who personally guaranteed business loans. The distinction turns on why the debt was incurred: a loan to buy restaurant equipment is business debt, while a credit card used for groceries is consumer debt.

Income Isn’t the Only Gate

Passing on income doesn’t automatically mean you can file. If you received a Chapter 7 discharge in a case filed within the last eight years, you can’t receive another one. The clock runs from filing date to filing date, not from the date of the earlier discharge.⁷

If your prior case was a Chapter 13, the waiting period for a new Chapter 7 is six years, with an exception: if your Chapter 13 plan paid 100% of unsecured claims, or at least 70% when the plan was proposed in good faith and represented your best effort, the six-year bar doesn’t apply.⁷

If the means test ultimately closes the door, Chapter 13 is the usual alternative. It lets you keep property and repay some or all of your debts through a court-supervised plan lasting three to five years, with its own income requirement running in the opposite direction: you need enough regular income to fund the plan.⁸

1
United States Department of Justice. Means Testing
2
U.S. Trustee Program. Census Bureau Median Family Income By Family Size
3
Legal Information Institute. 11 U.S. Code 101(10A) – Current Monthly Income Definition
4
U.S. Department of Justice. Means Testing – Section: IRS Data and General Information for Completing Bankruptcy Forms
5
Office of the Law Revision Counsel. 11 U.S. Code 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
Office of the Law Revision Counsel. 11 U.S. Code 727 – Discharge
8
United States Courts. Chapter 13 – Bankruptcy Basics