Bankruptcy Means Test by State: 2026 Income Limits and Eligibility

Who Is Exempt from the Means Test?

The means test only applies to individual debtors with primarily consumer debts. Several categories of filers are exempt:

Key Income Factors by State

Several state-specific factors affect your means test outcome:

• Median income level - Higher-median states (Connecticut, New Jersey, Maryland, Massachusetts) allow more income before triggering Step 2. Lower-median states (Mississippi, West Virginia, Arkansas) have tighter thresholds.
• Cost of living - States with higher housing and transportation costs often see filers pass Step 2 even with above-median income, because allowed expense deductions are larger.
• State vs. federal exemptions - About two-thirds of states allow filers to choose between state and federal exemption sets. The rest require state exemptions only. This affects what property you can protect, not the income test itself, but it is a critical part of the filing decisión.
• Number of bankruptcy districts - Large states like California (4 districts), New York (4), and Texas (4) have multiple districts with different local rules and procedures.
• IRS local standards - Housing and utility deductions in Step 2 are based on IRS local standards, which vary by county. Two filers with identical income in the same state but different counties may get different deduction amounts.

Income That Counts - and Income That Does Not

The means test uses current monthly income (CMI), defined as average monthly gross income from all sources during the 6 full calendar months before filing. This includes:

• Wages, salary, tips, bonuses, overtime, commissions
• Net business income (gross revenue minus ordinary and necessary business expenses)
• Rental income, interest, dividends, royalties
• Pension and retirement income
• Contributions to household expenses from non-filing persons (including a non-filing spouse)
• Unemployment compensation, workers' compensation, disability payments

Excluded from CMI: Social Security benefits (retirement, disability, SSI, survivor benefits) are excluded by statute. This is one of the most commonly misunderstood rules - many filers assume Social Security disqualifies them when it does not count at all.

Common Mistakes to Avoid

The means test is mechanical, but errors are common. The most frequent mistakes include:

1. Wrong household size - Courts use different methods to count household members. Some circuits use Census-based definitions; others use an economic-unit test or IRS dependency rules. Getting this wrong shifts your entire threshold.
2. Including Social Security income - Social Security is excluded from CMI by statute, but many filers (and some software) include it anyway, creating a falsely inflated income figure.
3. Wrong 6-month window - The test uses the 6 full calendar months before filing. If you file on March 15, the window is September 1 through February 28 - not the last 180 days.
4. Missing deductions in Step 2 - Filers who fail Step 1 often overlook deductible expenses: health insurance premiums, mandatory payroll deductions, education expenses for dependents, and court-ordered payments.
5. Using net pay instead of gross - CMI is based on gross income, not take-home pay. Taxes, insurance, and retirement contributions come off as deductions in Step 2, not in the income calculation.

For a detailed breakdown, see our common mistakes guide.

The Forms You Will File

The means test is completed on official bankruptcy forms filed with your petition:

• Form 122A-1 (Chapter 7 Statement of Your Current Monthly Income) - calculates your CMI and compares it to the state median. Every individual Chapter 7 filer completes this form.
• Form 122A-2 (Chapter 7 Means Test Calculation) - only required if you are above the median. Subtracts allowed deductions and determines whether a presumption of abuse arises.
• Form 122A-1Supp (Statement of Exemption from Means Test) - filed instead of 122A-1 if you qualify for an exemption (disabled veteran, primarily business debts, etc.).

Download the official forms at uscourts.gov.

Means Test vs. Chapter 13

The means test under Section 707(b) only applies to Chapter 7. There is no income ceiling for Chapter 13 - anyone who meets the debt limits under Section 109 can file Chapter 13 regardless of income.

However, income still matters in Chapter 13. If your income is above the state median, your Chapter 13 plan must run for 5 years rather than 3 years, and you must commit all projected disposable income to the plan. For a full comparison, see our Chapter 7 vs. Chapter 13 guide.

Timing Your Filing Strategically

Because the means test uses your average income over the 6 full calendar months before filing, the timing of your petition can significantly affect whether you pass. Consider these scenarios:

• Recent job loss or income reduction - If your income dropped recently, waiting until the high-earning months fall outside the 6-month window can lower your CMI enough to pass Step 1.
• Seasonal income - Workers with seasonal peaks (construction, retail, agriculture) may benefit from filing during or shortly after their low-income season.
• Large one-time payments - Bonuses, severance packages, insurance settlements, and tax refunds are included in CMI for the month received. If you received a large lump sum, waiting 6 months from the date of receipt can remove it from the calculation.
• Overtime reduction - If you have been working significant overtime, reducing hours before the 6-month window begins can lower your average income.
• Non-filing spouse income - A non-filing spouse's income is included in CMI on Form 122A-1. However, a "marital adjustment" on the same form allows you to subtract the spouse's income that is not regularly used for household expenses.

Caution: Strategic timing is legitimate, but intentionally manipulating income - quitting a job solely to pass the means test, hiding income, or delaying filing to run out the clock on a bonus - can raise red flags with the U.S. Trustee. The distinction is between planning around your genuine financial situation and fabricating one. Consult an attorney if you are unsure.

State Income Groups: How States Compare

While exact figures change every April and November, states generally fall into three income tiers for means test purposes. These approximate ranges are for a single-person household:

Note: These groupings are approximate and based on recent Census data. Actual thresholds depend on household size and the most recently published DOJ figures. Select your state above for current numbers.

What Happens After You Pass

Passing the means test is necessary but not sufficient for a successful Chapter 7 case. After passing, you still must:

1. Complete credit counseling - You must receive a briefing from an approved credit counseling agency within 180 days before filing. The agency will issue a certificate that you file with your petition.
2. File your petition and schedules - The petition includes detailed schedules of all assets, liabilities, income, expenses, executory contracts, and a statement of financial affairs. Accuracy matters - omissions can result in denial of discharge.
3. Attend the 341 meeting - About 30-45 days after filing, you attend a meeting of creditors where the trustee and any creditors can ask questions under oath.
4. Complete debtor education - After filing, you must complete a financial management course from an approved provider before receiving your discharge.
5. Wait for discharge - In a typical no-asset Chapter 7 case, discharge enters approximately 60-90 days after the 341 meeting, assuming no objections.

For a full walkthrough, see How to File Bankruptcy.

Prior Filing Restrictions

Even if you pass the means test, you may be barred from receiving a Chapter 7 discharge if you received a prior discharge too recently. Under 11 U.S.C. Section 727(a)(8), you cannot receive a Chapter 7 discharge if you received a Chapter 7 or Chapter 11 discharge in a case filed within the preceding 8 years. Under Section 1328(f), a prior Chapter 13 discharge within 6 years can also block a Chapter 7 discharge, with exceptions.

Use the free discharge screener to check your eligibility based on prior filing history.

Means Test for Self-Employed Filers

Self-employed debtors face additional complexity. The means test uses net business income - gross revenue minus ordinary and necessary business expenses - not gross receipts. Key considerations:

• Business expenses reduce CMI - Legitimate business costs (rent, supplies, payroll, insurance, vehicle expenses) are subtracted from gross revenue before CMI is calculated. This can significantly reduce your income figure.
• The 6-month lookback applies - Your business income is averaged over the same 6-month window as wage income. Seasonal businesses with uneven revenue should consider timing carefully.
• Separate business debt - If more than 50% of your total debt is business debt (not consumer debt), you may be exempt from the means test entirely under Section 707(b). This exemption applies to sole proprietors, not just corporations or LLCs.
• Avoid the double-count trap - Some expenses (like a home office or vehicle used for both personal and business purposes) can be deducted as business expenses in the CMI calculation or as personal deductions in Step 2, but not both. Claiming the same expense twice can trigger a U.S. Trustee objection.
• Documentation is critical - Self-employed filers should have detailed profit-and-loss statements, bank records, and tax returns ready. The trustee will scrutinize business income more closely than W-2 wages.

For a full guide, see Self-Employed Means Test on our sister site.

Household Size: Who Counts?

Your household size determines which median income figure you are compared against - and getting it wrong shifts your entire threshold. Unfortunately, the Bankruptcy Code does not define "household size," and courts have adopted three different approaches:

• Census Bureau definition - Everyone living under your roof, regardless of relationship or financial contribution. This tends to produce the largest household size.
• IRS dependency test - Only people you could claim as dependents on your tax return. This tends to produce the smallest household size.
• "Economic unit" test - People whose finances are intertwined with yours, sharing income and expenses as a single economic unit. This is the most flexible standard.

Which method applies depends on your circuit. Check your state's page for guidance on the local approach, or see our detailed household size guide.