If you just heard the word bankruptcy and your stomach dropped, you are not alone, and this is not a judgment on you. This page answers one question in about two minutes: is Chapter 7 even on the table for your income?
Quick answer: There’s no single income cap for Chapter 7. Take your average gross income over the last six full months and multiply by 12. If that’s at or below your state’s median for your household size, you pass the income test. If it’s above, a second calculation using allowed expenses decides, and people above the median can still pass that one.
| Where you land | Result label | What it means |
|---|---|---|
| Below your state median | STEP 1 PASSED | Step 1 passed; the presumption of abuse doesn’t arise. |
| Above your state median | STEP 2 DECIDES | Step 2 decides, based on what’s left after allowed expenses. |
| Mostly business debt, or a qualifying disabled veteran | TEST MAY NOT APPLY | The means test may not apply at all. |
Check your numbers in 60 seconds: state, household size, last six months
The six months that count move every time the calendar turns, so filing one month earlier or later can change your result.
- How it works
- Your state’s limit
- The 6-month rule
- What counts
- Household size
- Above the median
- No test needed
- If you fail
Medians shown apply to cases filed on or after April 1, 2026. The U.S. Trustee Program reissued the table for cases filed on or after July 15, 2026 with the same figures, and had posted no newer table when we checked on November 5, 2026. It has updated its table around November 1 in recent years, so check the date before you file.
Chapter 7 Income Check
I’m above the median, show Step 2
Above-Median Screen
Enter monthly amounts. Each hint says where the number comes from. Leave a box blank if it doesn’t apply.
How the Chapter 7 Income Limit Actually Works
Chapter 7 has no flat income cap; it has a two-step test that compares your recent income with your state’s median and, if needed, looks at what’s left after allowed expenses.
The test applies to individuals whose debts are mostly consumer debts (11 U.S.C. §707(b)(1)). Courts generally measure “mostly” by dollar amount, not by how many debts you have.
Step 1 works out your current monthly income, or CMI: your average monthly income from all sources over the six full calendar months before the month you file (§101(10A)). Multiply it by 12 and compare it with your state’s median family income for your household size, as published by the U.S. Trustee Program.
At or below the median, the presumption of abuse doesn’t arise (§707(b)(7)) and you skip the second form. That is the STEP 1 PASSED result.
Step 2 is for filers above the median. Official Form 122A-2 subtracts IRS standard allowances and certain actual expenses from your income. The monthly amount left over is multiplied by 60 and compared with fixed dollar thresholds. That is the STEP 2 DECIDES result.
A “presumption of abuse” is not an accusation. It is a legal flag that lets the court dismiss a Chapter 7 case or, if you agree, convert it to another chapter. It can be rebutted, as the Step 2 section explains.
This is why it is only “kind of” an income limit. Going over the median doesn’t close the door, and passing doesn’t guarantee a discharge.
Above the median isn’t a “no.” It means Step 2 decides.
Your State’s Median Income for 2026
Your state’s median is a set of dollar figures, one per household size, published by the U.S. Trustee Program from Census Bureau data, and the current table applies to cases filed on or after April 1, 2026.
The table lists households of one to four people. For each person above four, add $11,100. For example, Ohio’s figure for four people is $123,702, so Ohio’s figure for a household of five is $134,802.
The agency reissued the table for cases filed on or after July 15, 2026 with the same figures. The IRS expense standards used in Step 2 changed on that July 15 date; the medians did not.
Updates have arrived in the spring and around November 1 in recent years. When we checked on November 5, 2026, no new table had been posted. The calculator reads every figure from one dated table, so a new table is a one-place change.
On a phone, use the state menu in the calculator above. It returns the median for your state and household size, so you don’t have to scroll a 51-row table.
| State | 1 person | 2 people | 3 people | 4 people | Each extra person |
|---|
Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands have their own rows in the official table, which isn’t reproduced here.
The 6-Month Look-Back: Why Your Filing Month Matters
The income test looks at the six full calendar months before the month you file, not at your salary this year, which is why the filing month can change the result.
The six months before your filing month are what count, not your annual salary.
If you file any time in November, the months that count are May through October. File in December and they become June through November. November’s income only enters the average once you have moved into December.
Here is one example with invented round numbers. They are illustrative only, and the $75,000 median below is a made-up figure, not any real state’s median.
Maria, a household of 3 in a made-up state with a $75,000 median, lost her job in month 4. She earned $7,000 a month until her job ended in April (month 4), got a last paycheck of $3,500 in April, and then received $1,600 a month in unemployment in May and June.
Filing in May looks at November through April: five months at $7,000 and one at $3,500, for $38,500. Divided by 6, that’s about $6,417 a month, or $77,000 a year. Against the made-up $75,000 median, that is STEP 2 DECIDES.
Filing in June looks at December through May: four months at $7,000, one at $3,500, and one at $1,600, for $33,100. That’s about $5,517 a month, or $66,200 a year: STEP 1 PASSED.
Filing in July looks at January through June, which totals $27,700. That’s about $4,617 a month, or $55,400 a year. Same woman, same debts, three different income figures, because the window moved.
A bonus works the same way. A $12,000 bonus received inside the window adds $2,000 to the monthly average and $24,000 to the annualized figure. When the calendar moves that month out of the window, it stops counting.
Many people start looking at Chapter 7 because a deadline is closing in, such as a paycheck garnishment, missed mortgage payments, or a car repossession. Those pressures are real, and you may not be able to wait.
The filing-month effect is simply how the test works, and thinking about timing is legitimate. But honesty matters. Delaying or speeding up income, spending down, or moving money around to change the numbers can lead a court to dismiss your case under §707(b)(3), and can cause worse problems. Ask a bankruptcy attorney or free legal aid before you pick a date.
The Income Check above has a “this month” box so you can see how next month’s window changes your numbers.
What Counts as Income and What Doesn’t
Current monthly income counts nearly everything you receive from any source, taxable or not, except a short list that the law leaves out.
Social Security and VA disability benefits don’t count as income here.
Count gross amounts, before taxes. For self-employment and rental income, count what is left after ordinary and necessary business or operating expenses.
The VA and Defense Department exclusion comes from the HAVEN Act of 2019 (Pub. L. 116-52). It covers certain monthly pay and benefits paid under titles 10, 37, and 38 of the U.S. Code because of a disability, a combat-related injury, or a service member’s death. Some retired pay is only partly excluded, so check the details with an attorney. If your VA claim itself is the problem, see how VA disability claims work.
| Source | Counts? | Note |
|---|---|---|
| Wages, salary, overtime, bonuses | Yes | Gross, before taxes. |
| Self-employment and business income | Yes | Net of ordinary and necessary business expenses. |
| Unemployment compensation | Yes, generally | The form lets a filer list it separately if they contend it is a Social Security Act benefit. Courts haven’t all treated it alike, so ask an attorney. |
| Pensions | Yes | One-time withdrawals from your own retirement accounts are treated differently by different courts. |
| Rent from property you own | Yes | Net of operating expenses. |
| Regular help from others toward household bills | Yes | Counts when it is paid on a regular basis. A one-off gift is a different question. |
| Child support received | Generally yes | The law counts income from all sources, taxable or not. Ask your attorney how your court treats it. |
| Interest, dividends, royalties | Yes | Average over the six months. |
| Social Security Act benefits | No | Retirement, disability, and survivor benefits are excluded. |
| VA and DoD disability pay | No, in most cases | HAVEN Act exclusion; scope is in §101(10A). |
| Certain payments to crime victims | No | War crimes and terrorism victim payments are excluded. |
A tax refund is not on the statute’s short list either way, and courts have not all treated refunds the same. List it and let an attorney advise.
Household Size: The Number People Get Wrong
The Bankruptcy Code doesn’t define household size, so courts use different methods, and your district’s approach can change which median applies to you.
Courts generally follow one of three approaches. The “heads on beds” (or census) approach counts everyone who lives in your home. The IRS-dependents approach counts people you could claim on a tax return. The economic-unit approach counts people who share income and expenses.
The answer is a range, not a rule, and your district may favor one of them. A larger household means a higher median, so this number matters in both directions.
Shared custody is a common question. Some courts look at where a child actually lives, others at who provides support or claims the child for taxes. Adult children who live with you are treated differently depending on whether they share expenses or depend on you.
Count honestly. Write down who lives with you and who you support, then ask an attorney how your district counts. An inflated count isn’t a fix, and a court can see through it.
Married? Filing Alone vs. Together
If you’re married and file alone, your spouse’s income generally counts in Step 1 when you share a household, even though your spouse isn’t filing.
In a joint filing, both spouses’ income and the whole household count. When one spouse files alone, Official Form 122A-1 has a separate column for the other spouse’s income and asks you to include it unless you are living separately or legally separated.
The form has a box for spouses who live separately, and then the spouse’s column is left blank. Whether that fits your situation is a legal question to take to an attorney.
Step 2 then allows a marital adjustment. It subtracts the part of your spouse’s income that is not used for the household expenses of you or your dependents. Trustees look at this closely, so it needs records.
That is how the Income Check treats it: your spouse’s full income goes into Step 1, and the unused portion carries over to the Above-Median Screen. If you’re married and filing alone, talk to a bankruptcy attorney or free legal aid first.
Above the Median: How Step 2 Works
Step 2 (Official Form 122A-2) subtracts allowed expenses from your income, multiplies what’s left by 60, and compares the result with fixed dollar thresholds.
The deductions are ones the statute and the form provide. They include IRS National Standards (food, clothing, personal care and similar), IRS Local Standards (housing and utilities, vehicle costs), and certain actual expenses.
Those actual expenses include taxes, health insurance and out-of-pocket health care, child care, court-ordered payments, secured debt payments averaged over 60 months, and priority debts divided by 60. The form allows others too, such as care for an ill or disabled household member. Many categories are capped at the lower of your actual cost and the table amount.
The IRS standards used in bankruptcy cases filed on or after July 15, 2026 were announced by the U.S. Trustee Program on June 30, 2026. Use the tables for your filing date.
The thresholds were last adjusted on April 1, 2025 and will next change on April 1, 2028.
| Monthly disposable income × 60 | What it means |
|---|---|
| Below $10,275 | The presumption of abuse does not arise. |
| $10,275 to $17,149 | The presumption arises only if the 60-month figure is also at least 25% of your nonpriority unsecured debt. This is the 25% test. |
| $17,150 or more | The presumption arises. |
An invented example of the 25% test: say monthly disposable income is $200, so ×60 is $12,000. With $60,000 of unsecured debt, 25% is $15,000, and $12,000 is below it, so the presumption doesn’t arise. With $40,000 of unsecured debt, 25% is $10,000, and $12,000 is above it, so the presumption arises.
Even then, it is not final. A presumption can be rebutted by documented special circumstances, such as a serious medical condition or a call to active duty (§707(b)(2)(B)). The court then looks at whether those circumstances justify adjustments that bring the numbers down.
Passing the test doesn’t guarantee a discharge. The court looks at the whole picture.
Open the Above-Median Screen near the top of this page to run your own figures. It is a rough guide, and an attorney should confirm the real numbers.
When the Means Test Doesn’t Apply at All
The means test applies only to individuals whose debts are mostly consumer debts, so people with mostly business debt, and certain disabled veterans, may not have to take it.
Business debt. If more than half of your total debt by dollar amount is business debt, the means test generally does not apply. Classification can be disputed. A personal guarantee of a business loan, for example, is not always simple, so list every debt and have an attorney look at the split.
Disabled veterans. A disabled veteran, as defined in 38 U.S.C. §3741(1), is exempt if the debts arose mostly while on active duty or performing a homeland defense activity (§707(b)(2)(D)(i)). That definition covers a veteran rated 30 percent or more disabled, or a veteran whose discharge from active duty was for a disability incurred or aggravated in the line of duty. The exemption claim is made on Official Form 122A-1Supp.
Reservists and National Guard. Members called to active duty after September 11, 2001 for at least 90 days, or who did homeland defense work for at least 90 days, are excluded while serving and for 540 days afterward. This exclusion applies to cases begun through December 2027, unless Congress extends it.
The label is TEST MAY NOT APPLY, not “exempt.” Other Chapter 7 requirements still apply, and the court can still look at the whole case.
If You Fail the Means Test
If the presumption of abuse arises and you can’t rebut it, the usual outcomes are a different chapter, a different date, or a non-bankruptcy route, and none of them is the end of your options.
First, check that the numbers are right. Wrong household size and counted Social Security are the most common errors. Then ask whether documented special circumstances apply.
If the case is dismissed, you could file again later, when a different six-month window gives a different, honest answer. That is a real reason to see an attorney early, not a way to game the result.
Chapter 13 is the main alternative. A Chapter 7 debtor generally may convert to Chapter 13 (§706(a)). For costs and process, see Chapter 7 vs. 13 and what a bankruptcy lawyer costs.
| Question | Chapter 7 | Chapter 13 |
|---|---|---|
| Income test | Means test; above the median, Step 2 decides. | Income sets how long the plan runs and how much you pay. Debt limits apply: currently $526,700 unsecured and $1,580,125 secured. Congress passed a bill in September 2026 to replace them with one $2.75 million limit; check whether it has been signed before you file. |
| How long it lasts | Usually a matter of months. | A plan of three to five years; above the median it usually runs five. |
| Keeping property | The trustee may sell property that isn’t exempt. Exemptions are a separate question. | You generally keep property while you make plan payments. |
| What you pay | No repayment plan. | Monthly payments to a trustee, based on your income and expenses. |
| Next step | Attorney or legal aid review. | See Chapter 7 vs. 13 for costs. |
If you don’t want bankruptcy, or can’t file Chapter 7, these routes are worth a look: a debt management plan, settling a credit card debt, and what to do if you’re broke and sued for a debt.
Passing Isn’t Everything: The Other Chapter 7 Requirements
Passing the means test is one gate; a Chapter 7 case also needs credit counseling, a clear 8-year window, a filing fee or waiver, and a court that sees no abuse in the whole picture.
Credit counseling. You must complete a counseling course within the 180 days before filing (§109(h)) with a provider on the U.S. Trustee Program’s approved list.
Debtor education. After you file, you must also complete a second course from an approved provider before the court grants a discharge (§727(a)(11)). It is separate from the credit counseling course.
The 8-year rule. You can’t receive a Chapter 7 discharge if you got one in a case filed within the previous 8 years (§727(a)(8)). Other kinds of earlier cases have their own timing rules.
Fee. The Chapter 7 filing fee is $338, per the federal fee schedule and court websites. You can ask to pay in installments. If your income is below 150% of the poverty line for your family size and you can’t pay in installments, you can apply for a waiver. The 150% figures are on uscourts.gov.
The whole picture. Even if you pass, a court can dismiss a case for abuse under the totality of the circumstances (§707(b)(3)).
Property. What you can keep depends on state and federal exemptions, which are a separate question from the income test.
One more thing: debt discharged in bankruptcy is generally excluded from taxable income (§108(a)(1)(A)). See whether forgiven debt is taxable for the rest.
Mistakes That Sink a Means Test
Most means test errors come from using the wrong months, the wrong person count, or the wrong table, and nearly all of them are avoidable.
| Mistake | Why it matters | What to do instead |
|---|---|---|
| Using annual salary instead of the six months | The test measures the six full calendar months before filing, not this year’s pay. | Gather pay records for those six months. |
| Counting Social Security | Social Security Act benefits are excluded, so counting them can push you over the median. | Leave them out of the income boxes. |
| Wrong household size | A different size means a different median. | List who lives with you and who you support, then ask how your district counts. |
| Forgetting the spouse’s income | A non-filing spouse’s income counts in Step 1 in the same household. | Include it, then look at the marital adjustment in Step 2. |
| Ignoring the filing-month effect | The window moves each month, so the result can change. | Check this month and next month, and keep your timing honest. |
| Using an outdated median table | Old tables and AI-written pages can show wrong figures. | Use the official table for your filing date. |
Before You File
This checklist covers what to gather and confirm before you file, and you can copy it into a note or email.
Before-You-File Checklist
Once your numbers look workable and you’re ready for the filing process itself, see filing bankruptcy without a lawyer.
Frequently Asked Questions
What is the income limit for Chapter 7 in 2026?
There is no single dollar cap. Your average income for the six full months before filing, times 12, is compared with your state’s median for your household size. At or below it, you pass Step 1; above it, Step 2 decides.
Do I make too much money for Chapter 7?
Not necessarily. Being above the median means Step 2 decides, using allowed expenses, and people above the median can still pass it. A bankruptcy attorney can run the official forms.
How is the means test calculated?
Step 1 compares your annualized six-month average income with your state median. If you’re above it, Step 2 subtracts allowed expenses, multiplies what’s left by 60, and compares it with set thresholds.
What months count for the means test?
The six full calendar months before the month you file. Filing in November uses May through October; filing in December uses June through November.
Can losing my job help me qualify for Chapter 7?
It can lower the six-month average, but only as the lower-income months enter the window. Timing is legitimate to consider if it’s honest. Ask an attorney before choosing a date.
Does a bonus or tax refund affect the means test?
A bonus received inside the six-month window counts as income, averaged across the six months. Courts have not all treated tax refunds alike, so list it and ask an attorney.
Does Social Security count as income for Chapter 7?
No. Benefits under the Social Security Act are excluded from current monthly income. Other income, such as wages or a pension, still counts.
Does VA disability count in the means test?
Generally not. The HAVEN Act of 2019 excludes certain VA and Defense Department disability pay from current monthly income. Some retired pay is only partly excluded, so confirm the details with an attorney.
Does unemployment count?
Generally yes, in the months you receive it. The form lets you list it separately if you contend it is a Social Security Act benefit, and courts differ, so ask an attorney how your court treats it.
Does my spouse’s income count if I file alone?
Usually yes if you share a household. The non-filing spouse’s income counts in Step 1, and Step 2 allows a marital adjustment for the part not used for household expenses.
How is household size determined?
No statute defines it. Courts use a head count, IRS dependents, or an economic-unit approach, so check how your district counts before you rely on a number.
Can I file Chapter 7 if I’m above the median income?
Possibly. Above the median, Step 2 decides, and a presumption of abuse can be rebutted with documented special circumstances. This is a good time to talk to an attorney.
What is the presumption of abuse?
A legal presumption, triggered by Step 2 numbers, that a Chapter 7 filing may be abusive. It can be rebutted. It can lead to dismissal, or to conversion with your consent. It is not a penalty.
What happens if I fail the means test?
The case can be dismissed, or converted to Chapter 13 if you agree. You can also recheck the numbers, document special circumstances, or look at non-bankruptcy routes.
Can I convert from Chapter 7 to Chapter 13?
Generally yes. A Chapter 7 debtor can generally convert to Chapter 13 under §706(a), as long as you meet Chapter 13’s eligibility rules, including its debt limits.
Does the means test apply to business debt?
Only when debts are mostly consumer debts. Courts generally measure by dollar amount, so mostly business debt may mean no means test. Classification can be disputed, so ask an attorney.
Are disabled veterans exempt from the means test?
Some are. A disabled veteran whose debts arose mostly during active duty or homeland defense can be exempt under §707(b)(2)(D)(i). Reservists have a separate, temporary exclusion.
When do the median income figures change?
The U.S. Trustee Program posts updated tables periodically, with recent updates effective April 1 and November 1. Check the table date for the month you file.
Sources
U.S. Trustee Program, Means Testing (median tables, IRS standards, effective dates) · Median family income table, cases filed on or after July 15, 2026 · 11 U.S.C. §101(10A) · §707(b) · §109(e), (h) · §727(a)(8), (a)(11) · §706 · 38 U.S.C. §3741 · Official Forms 122A-1, 122A-1Supp, and 122A-2 on uscourts.gov · IRS Collection Financial Standards · uscourts.gov fee schedule · HAVEN Act, Pub. L. 116-52 · Judicial Conference dollar adjustments effective April 1, 2025 (Federal Register notice) · H.R. 7730, Bankruptcy Threshold Adjustment Act (bill text).
Last updated: . Re-verify whenever the U.S. Trustee Program posts a new median table, after each April 1 threshold adjustment, and when H.R. 7730 is signed.
This page is general information, not legal advice. Bankruptcy eligibility depends on official forms, your district’s case law, and facts a calculator can’t see. Figures were verified on November 5, 2026 and are subject to change.
Daniel Hayes is the founder and sole researcher at AdvoraHQ. He covers U.S. personal finance, insurance, and consumer law — working directly from IRS publications, federal and state statutes, court opinions, and SEC filings rather than secondary summaries. His focus is the gap between what readers think they know and what the source documents actually say. Daniel is not a licensed attorney, CPA, or financial advisor; his articles are educational and not personalized advice. Reach him at Daniel.Hayes@advorahq.com.
