What's the Chapter 7 Median Income for Bankruptcy?

The Chapter 7 median income is a benchmark published by the U.S. Trustee Program, not a strict cutoff that automatically approves or denies your case. It represents the midpoint income for a household of your size in your state, meaning half of similar households earn more and half earn less.

Think of it as the first gate in the means test. If your current monthly income, averaged over the last six months, falls below your state's median, you typically qualify for Chapter 7 without further analysis. If you're above it, your case isn't automatically rejected, but you must complete the full means test calculation to see if you still have enough disposable income to pay creditors in a Chapter 13.

The 2026 Chapter 7 median income limits vary by state and household size, and there is no single national number that applies to everyone. The U.S. Trustee Program publishes updated figures several times a year, and the limit that matters is the one for your state and household size on the date you file.

Here is how the numbers typically shift with household size:

• 1-person household: This is the baseline median income for a single filer in your state. If your current monthly income annualizes below this number, you typically pass the means test automatically.
• 2-person household: The limit increases, often by roughly $10,000 to $14,000 above the 1-person figure, depending on your state.
• 3-person household: The allowed income rises again, reflecting the higher cost of supporting a larger household.
• 4-person household: This is a common benchmark size. In many states, the 4-person limit can be $15,000 to $25,000 higher than it is for a single person.
• For each additional person beyond 4: You add a set dollar amount. For 2026 cases, that number is generally around $9,000 to $9,900 per extra person, but you must check the exact figure from the U.S. Trustee.

Because the exact numbers vary so much (a single person in Alaska faces a much different limit than a single person in Mississippi), you should find your specific 2026 state and household size on the official means testing page from the U.S. Trustee Program. Using an incorrect household size is a common mistake that can push you over the limit and complicate your case.

Your state's Chapter 7 median income figures come directly from the U.S. Census Bureau. The Department of Justice uses the Census Bureau's most recent Current Population Survey data to calculate average gross incomes, broken down by state and household size. These numbers are updated multiple times per year, so the figures used in the means test always reflect relatively fresh economic data rather than a fixed, permanent chart.

Because the Census data measures gross income before taxes or deductions, you compare your gross income to these tables. The figures vary significantly by location to reflect the true cost of living, meaning a household of two in New York will face a much higher median than a household of two in Mississippi. This is why you must always check your specific state's numbers from an official source like the U.S. Trustee Program's means testing page rather than relying on national averages.

Your income number is the starting point for the means test, but it's just step one. The test doesn't use your raw salary. Instead, it compares your average monthly income over the last six months to your state's Chapter 7 median income for your household size. Here's how it works:

1. Calculate current monthly income (CMI). Add up all the money you received from almost every source during the six full calendar months before you file. Then divide that total by six. This is your CMI, and it's the number the court uses.
2. Annualize for comparison. Multiply your CMI by twelve to get your annualized current monthly income. This figure is placed directly next to the annual Chapter 7 median income for your state and household size.
3. Check the result. If your annualized income is at or below the median, you pass this part of the means test and typically qualify for Chapter 7. If it's above the median, you haven't failed yet, but you must complete the rest of the means test, which deducts allowed expenses to see if you have any disposable income left.

The key takeaway is that a temporary spike in income, like bonus pay or overtime, can inflate your six-month average and push you over the limit, even if your regular paycheck is well below it.

Being above the Chapter 7 median income doesn't automatically disqualify you, but it does shift the process to a more detailed financial review called the means test. You are not instantly blocked from filing. Instead, the court requires you to complete the second part of the means test, which deducts allowed monthly expenses to see if you have any disposable income left to pay creditors.

This is crucial because the means test is designed to measure your real ability to pay, not just your gross income. It subtracts things like housing costs, taxes, child support payments, and health insurance premiums from your income number. If these deductions absorb your income and leave nothing significant at the end of the month, you typically qualify for Chapter 7 even though your raw income was above the state median. Most people who find themselves above the median income still pass the means test after taking the allowed expense deductions.

Your household size directly determines which median income line you compare your income against, and a single person shift can sometimes double your income allowance. The bankruptcy forms use a very specific definition of "household size" that may not match your tax return or lease.

The key rule is that your household size equals the number of people you financially support who live with you, plus yourself. Changing this number adjusts the 2026 Chapter 7 median income figure pulled from the table, which can swing a case from "presumed eligible" to "presumed abusive."

• Adding a dependent lowers the bar: A family of four gets a much higher median income limit than a single filer. If you genuinely support a relative in your home, including them increases your household size and allows you to earn more while still passing the initial means test screen.
• Removing a contributor shrinks the pool: If a high-earning spouse moves out before filing, they generally aren't counted in the household, which lowers your household size. This may sound negative, but it also removes their income from the calculation, potentially dropping your combined earnings below the strict single-person limit.

Courts use the "heads on beds" or economic unit approach, meaning you usually cannot count a roommate or a tenant who pays their own way, even if they live with you. Before filing, always confirm how the local trustee calculates this number, because overstating your household to claim a higher median income can trigger a dismissal for bad faith.

For the means test, income means money from almost any source that is regular and taxable, received during the six-month period before filing. It is not just your take-home pay from a job.

Here is what the court typically counts:

• Wages, salaries, and overtime before deductions
• Business and self-employment income after ordinary operating expenses
• Rental income after standard property expenses
• Regular contributions from a non-filing spouse or partner toward household bills
• Unemployment benefits received during the look-back period
• Pension and retirement withdrawals that are not rolled over
• Disability insurance payments (unless sourced from the Social Security Act)

A local attorney can help you identify exactly which line items apply to your situation, because even rent from a roommate or consistent family support may need to be listed.

Most government assistance benefits and a few specific forms of support are typically excluded when calculating your income for the Chapter 7 means test. This isn't a loophole, but a recognition that these funds are meant to cover basic survival needs.

The most common exclusions include Social Security benefits (retirement, disability, or SSI), unemployment compensation, and payments received under the Victims of Crime Act. Money you receive from tax-exempt retirement accounts or as child support also generally doesn't count toward your current monthly income. Student loan disbursements used for education expenses and foster care payments are left out of the calculation as well.

For practical purposes, the big one people often miss is Social Security income. If a large portion of your household budget comes from Social Security, it may not push you over the Chapter 7 median income limit even if the raw annual number looks high. Always provide your attorney with documentation tracing every source of deposits into your accounts so they can correctly separate what counts from what doesn't.

If your pay just dropped, the most important step is to wait for that lower income to show up in your six-month look-back average. The Chapter 7 means test uses your income from the six full calendar months before you file, so a recent pay cut won't help you qualify until it drags that average down. Filing too soon while old, higher paychecks still dominate the calculation can lock you out of a Chapter 7 case you might otherwise pass.

In the meantime, carefully track every pay stub and document the reason for the drop, whether it's a layoff, reduced hours, or a job change. If your new monthly income clearly falls below your state's Chapter 7 median income for your household size, you may simply need to time your filing so that five or six months of the lower amount fill the look-back window. Some people pick up a short-term second job to stay afloat during this waiting period, but that extra income will count in the average, so it can be a tricky balance.

If waiting isn't an option and you're still above the median when you must file, you can present a 'special circumstances' argument to the court. This lets you explain that a permanent pay cut or job loss rebuts the presumption of abuse, even if the raw six-month number says otherwise. You'll need solid proof, like a termination letter or a written statement from your employer confirming the new, lower wage, so a bankruptcy attorney can help you build that record correctly.