There is no fixed maximum income for Chapter 7 bankruptcy. Eligibility turns on how your income compares to the median for a household of your size in your state. If you’re at or below that median, you generally qualify. If you’re above it, a second calculation looks at whether your income minus standardized expenses leaves enough to repay creditors. This two-step screen is called the means test, and it’s the only income gate in Chapter 7.
One threshold matter before the numbers: the means test applies only if your debts are primarily consumer debts, like credit cards, medical bills, and personal loans. If more than half of your total debt is business debt, the income test doesn’t apply to you at all.1Office of the Law Revision Counsel. 11 U.S. Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
State Median Income Thresholds
The first part of the means test compares your annualized income to the median family income for your state and household size. These figures come from Census Bureau data and are published by the U.S. Trustee Program, which updates them periodically.2United States Department of Justice. Means Testing For cases filed on or after April 1, 2026, examples include:3U.S. Trustee Program. Census Bureau Median Family Income By Family Size
- 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 for each additional member.3U.S. Trustee Program. Census Bureau Median Family Income By Family Size The complete table for all states is on the U.S. Trustee’s website. If your annualized income lands at or below the applicable figure, you pass the means test and can file Chapter 7 without any further income scrutiny.
How Your Income Is Measured
The number you compare against the median isn’t your salary or your last tax return. It’s your “current monthly income,” defined as the average of all gross income you received during the six full calendar months before the month you file.4Legal Information Institute. 11 U.S. Code 101(10A) – Current Monthly Income Definition File on July 15 and the lookback covers January through June. Timing a filing around a period of lower earnings can move you from above-median to below-median.
The average is then annualized (multiplied by 12) to produce the figure compared against the state median.
What Counts
Wages, salary, business income, rental income, pension payments, unemployment benefits, and any regular contributions someone else makes toward your household expenses all go into the calculation. Both taxable and nontaxable income count.
What Doesn’t Count
A few categories are excluded. Social Security benefits are the biggest one for many filers. Payments to victims of war crimes or terrorism are also excluded.4Legal Information Institute. 11 U.S. Code 101(10A) – Current Monthly Income Definition
Veterans get a substantial exclusion under the HAVEN Act, which keeps disability compensation, combat-related pay, and survivor benefits paid under federal military and veterans’ statutes out of the calculation. A veteran whose total income sits above the state median may pass the means test once service-connected disability pay is removed.4Legal Information Institute. 11 U.S. Code 101(10A) – Current Monthly Income Definition
If You’re Married and Filing Alone
Your spouse’s income gets pulled into the calculation to the extent it regularly pays household expenses, even if your spouse isn’t filing with you. This surprises a lot of solo filers. You can take a “marital adjustment” for the part of your spouse’s income that doesn’t go toward shared costs, like their separate tax obligations or child support to a former partner. Courts scrutinize these deductions, so the split has to be honest and documented.
If You’re Above the Median
Being over the state median doesn’t disqualify you. It sends you to the second part of the means test, which asks whether enough of your income is truly available to repay creditors after standardized expenses. Many above-median filers still qualify at this stage.
The expenses used here are not what you actually spend. 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.5U.S. Department of Justice. Means Testing – Section: IRS Data and General Information for Completing Bankruptcy Forms You can also deduct payments on secured debts like a mortgage or car loan, taxes, mandatory payroll deductions, and childcare.
Subtract those allowable expenses from your current monthly income, and multiply what remains by 60 (five years of hypothetical payments). If that five-year total is under $10,275, or under 25% of your unsecured debts (whichever is greater), no presumption of abuse arises and you qualify. If the total is $17,150 or more, the presumption applies and Chapter 7 is presumed off the table. Between those two figures, whether the presumption applies depends on the percentage of your unsecured debts the disposable income could cover.1Office of the Law Revision Counsel. 11 U.S. Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 These dollar thresholds were adjusted effective April 1, 2025.6Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
When High Income Still Doesn’t Block Chapter 7
Even if the means test triggers a presumption of abuse, two paths remain.
Special Circumstances
You can rebut the presumption by showing special circumstances that justify additional expenses or income adjustments the standard test doesn’t capture. The statute specifically names a serious medical condition and a call to active military duty, though those aren’t the only qualifying situations.1Office of the Law Revision Counsel. 11 U.S. Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 The bar is high. You have to itemize each additional expense, document it, and sign under oath. If the adjusted numbers pull your disposable income below the threshold, the presumption is overcome.
The Business Debt Exception
The means test applies only when debts are “primarily consumer debts.”1Office of the Law Revision Counsel. 11 U.S. Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 If more than half your total debt is business debt, you can file Chapter 7 no matter how much you earn. This matters most for failed business owners, independent contractors, and anyone who personally guaranteed business loans. The distinction turns on why the debt was incurred: a loan for restaurant equipment is business debt; a credit card used for groceries is consumer debt.
If You Don’t Pass
When the presumption of abuse holds and you can’t overcome it, Chapter 7 isn’t available. The usual alternative is Chapter 13, which lets you keep your property while repaying some or all of your debts through a court-supervised plan of three to five years.7United States Courts. Chapter 13 – Bankruptcy Basics Chapter 13’s income requirement runs the other way: you need enough regular income to fund a plan.
For some filers, Chapter 13 is the better tool even when Chapter 7 is on the table. If you’re behind on a mortgage and want to keep the house, or you owe back taxes you need time to pay off, Chapter 13’s structured repayment can do things Chapter 7 can’t.