What is The Income Limit for Filing a Chapter 7 Bankruptcy in 2024

If you’re looking to file for bankruptcy as a form of relief, one of the first things that you may need to determine is whether you meet the income limit for Chapter 7 Bankruptcy. Chapter 7 bankruptcy is often, the easiest, and most affordable form of bankruptcy.
Information in this article does not constitute legal advice, it is for informational purposes only, and may not constitute the most up-to-date information. Readers should contact their attorney for advice on any particular legal matter.

Individuals who withhold debt may meet the Chapter 7 income requirements under the means testing to receive a bankruptcy discharge. A discharge releases you from the legal responsibility to repay any day. Without the discharge, you may continue to owe your debt.

Chapter 7 Income Limit Bankruptcy Calculator 

Income is interchangeable and complicated. Many variables play a role in receiving income, such as changing jobs, variable income, job loss, etc. In addition, it is important to know where you fall in the income limit to verify if you qualify for filing a Chapter 7. To make it easier, we built a free Chapter 7 income limit bankruptcy calculator to provide you with an estimate of your qualifications. The calculator uses the most recently updated median income figures to determine where your income currently lies within the limit.

Keep on reading, or jump ahead to the section that interests you the most.

Table of Contents

Bankruptcy Means Testing Median Income Numbers

The Chapter 7 Bankruptcy means test numbers are updated every 6 months or so through the justice.gov website. The table provides the latest figures for cases filed on or after April 1, 2024.

See income limit by states below:








District of Columbia




















North Carolina

North Dakota


New Hampshire

New Jersey

New Mexico


New York





Rhode Island

South Carolina

South Dakota








West Virginia


Why are there income limits for Chapter 7 Bankruptcy cases?

When bankruptcy laws were revised in 2005, congress added an income limit for Chapter 7. BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act) changed the way debtors qualified for bankruptcy discharge in Chapter 7. The purpose of this act was to prevent bankruptcy abuse by limiting Chapter 7 cases to individuals who could not afford to repay any portion of their unsecured debts.

Why Income Limits are Important in Chapter 7 Cases

The income limits in a Chapter 7 does not prevent you from filing a Chapter 7, however, it does prevent you from receiving a bankruptcy discharge. You can file for Chapter 7 regardless of how much you earn.

In other words, if your income exceeds the Chapter 7 income limits and you still decide to file a Chapter 7 bankruptcy, it does not result in debt relief. The court can deny your bankruptcy discharge based on abuse.

What if my income exceeds Chapter 7 income limits?

When your income exceeds the Chapter 7 income limits, you may want to consider filing under Chapter 13 to receive a bankruptcy discharge. The assumption is that if your income is higher than the maximum income limit for Chapter 7, that means you can afford to pay a percentage of what you owe to your unsecured creditors.

It’s important to note that unsecured creditors do not have liens on your property. Some examples of unsecured debt are credit cards, personal loans, and medical bills.

How to Calculate Income for the Chapter 7 Means Test?

The first step is to gather proof of income from the past six months. When filing for Chapter 7 bankruptcy, the court will look at your income for the six months before you file your Chapter 7 case. For example, if you file your Chapter 7 bankruptcy petition on July 15, you need to report all income from January 1, all the way through June 30. You can find the exact language to calculate income in this form of the bankruptcy means test forms.

Which Income is Included in The Chapter 7 Bankruptcy Means Test?

The first step is to understand what type of income is included, income earned and income received are both included, except income that comes from the Social Security Act, Social Security retirement income, SSDI, and SSI  are all not included as income in Chapter 7 bankruptcy means test.

Below are some more examples of income used in the Chapter 7 Means Test:

  • Wages and salaries, including overtime, bonuses, and commissions.
  • Net income from self-employment or operation of a business.
  • Net income from rental property.
  • Unemployment income.
  • Worker’s compensation income.
  • Interest, royalties, and dividends.
  • Annuities, retirement income, and pensions.
  • Private disability insurance income.
  • Child support and spousal support.
  • Regular income contributed by another person for household expenses, such as non-filing spouse’s income and money from a roommate, domestic partner, parent, or friend.

Completing the Means Test

Section One - Median Income

Before completing the first part of the Chapter 7 Means Test, you need to understand two terms - current monthly income (CMI) and annual median income. 

To calculate your CMI, you take all the income you received during the six months before filing and divide it by six. For example, if your income for six months is $25,000, your current monthly income equals $4,166,67 ($25,000 divided by 6)

The annual median income is based on your CMI. To calculate the annual median income, you multiply your CMI that you calculated by 12. Using the example above, median income is $50,000 ($4,166.67 x 12). 

If your annual median income is lower than the median income of your state, then you are presumably eligible for a bankruptcy discharge under Chapter 7.

Once you understand and have your median income, you may want to take the Chapter 7 means test calculator to estimate whether you qualify for a Chapter 7 bankruptcy. You can use the calculator below to estimate your qualification.

Section Two - Statement of Exemption from Presumption of Abuse

Certain provisions may exempt you from the means test altogether. These are related to whether the debts are consumer-related and whether you are a disabled veteran or whether you are or have been a member of the National Guard or a Reservist. See the bankruptcy form, "Statement of Exemption from Presumption of Abuse Under §707(b)(2)" for more information.

Section Three - Disposable Income

If you earn too much income than the income limit to qualify for Chapter 7 under the median income test, you could qualify for Chapter 7 under the disposable income test. Disposable income is the amount of money you have each month left over after deducting your ordinary living expenses and mandatory payroll deductions. 

In Chapter 13 cases, you have to include disposable income in your Chapter 13 plan. See the median calculator below to see whether you may still qualify for a Chapter 7 bankruptcy even if your income exceeds the median income based on your household size and state.

In a Chapter 7 bankruptcy case, if your disposable income is below a certain level, you can still qualify for a bankruptcy discharge even though your annual median income is higher than the income limit for Chapter 7 bankruptcy. Examples of expenses that may be deducted from CMI to calculate disposable income include:

  • Required payroll deductions, such as payroll taxes, uniforms, union dues, and mandatory retirement savings
  • Food, clothing, and household expenses
  • Car payments, rent, lease payments, and mortgage payments
  • Out-of-pocket healthcare costs
  • Health insurance, term life insurance, and disability insurance premiums
  • Childcare costs and school expenses for minor children
  • Vehicle operating costs or public transportation costs
  • Court-ordered child support or alimony payments

The expenses are based on how many people live in your home. Also, some monthly expenses are limited and based on national standards for living expenses. Some of your monthly expenses may not be used, such as expensive memberships to gyms or golf clubs. Also, if your expenses exceed “normal” amounts, you may need to justify and provide proof of the expense. For example, your healthcare costs are very high because your child has a disability.


In short, the income limit for Chapter 7 bankruptcy is based on the state you reside in, the household size, and your income level. Hopefully, this article helped you understand just how to calculate your annual income for bankruptcy forms.

Don’t forget to use the Chapter 7 Bankruptcy Means Test Calculator to see if you qualify for Chapter 7. For additional information about Chapter 7 cases or to find a Chapter 7 attorney near you, feel free to reach out. You can call or text us at (310) 307-5134 if you have questions or need help.

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