The California Chapter 7 Means Test

The means test is the income screen that decides whether you qualify to file Chapter 7 bankruptcy. Congress created it in 2005 to keep higher-income debtors from wiping out debts in Chapter 7 when they could afford to repay something through a Chapter 13 plan. For most Californians the test is straightforward — if your income is below the state median for your household size, you pass. But the calculation has a second stage for higher earners, and the dollar figures change twice a year, so it is worth understanding how it works before you file.

This guide offers general information about the federal means test as it applies in California and is not legal advice. The median-income figures and expense standards are updated periodically; always verify the current numbers. For advice about your eligibility, consult an attorney licensed by the State Bar of California.

What the means test is for

The means test is part of the federal Bankruptcy Code and applies the same way nationwide, using state-specific income figures. Its purpose is to measure your ability to repay. If the test shows you have little or no disposable income, you may file Chapter 7 and discharge qualifying debts quickly. If it shows you could fund a meaningful repayment plan, Chapter 7 is presumed to be an “abuse” of the system, and you are generally directed to Chapter 13 instead. The test is completed on official bankruptcy forms (the 122A series for Chapter 7).

Step one: the California median-income comparison

The first step compares your current monthly income — your average gross household income over the six full calendar months before filing, annualized — to the California median family income for your household size. If you are at or below the median, you pass the means test and may proceed with Chapter 7 without the second-stage calculation.

For cases filed on or after April 1, 2026, the California median family income figures published by the U.S. Trustee Program are approximately:

These figures are updated by the U.S. Trustee Program (typically each spring and fall), so confirm the current number for your filing date and household size before relying on the table.

What counts as income — and what does not

The means test uses a broad definition of income. It includes wages, salary, tips, bonuses, commissions, self-employment income, rental income, interest and dividends, regular contributions from others toward household expenses, and certain other sources, averaged over the six months before filing. Importantly, the look-back is the six full calendar months before the month you file, so a recent raise or a recent job loss can change the average significantly depending on when you file. One notable exclusion is Social Security income, which is generally not counted as current monthly income for the means test. Because timing affects the average so much, choosing when to file can matter.

Step two: the disposable-income calculation

If your income is above the California median, you do not automatically fail — you move to the second stage. Here you subtract a series of allowed expenses from your income to find your monthly disposable income. Many of these expenses are not your actual bills but standardized amounts set by national and local standards (for food, clothing, housing, utilities, transportation, and so on), while others — like taxes, mandatory payroll deductions, certain secured-debt payments, and health-care costs — use your actual figures. The result is a projection of how much you could pay creditors over five years.

If your disposable income is low enough, the presumption of abuse does not arise and you may still file Chapter 7 even though you are over the median. If your disposable income is high enough to fund a meaningful plan, the presumption of abuse applies and Chapter 7 is generally off the table. Many above-median Californians still pass after the expense deductions, so being over the median is not the end of the road.

A short example shows how the second stage can rescue an over-median filer. Suppose a single Californian earns enough to land a few thousand dollars above the state median, so step one alone would flag the case. At the second stage, the filer deducts taxes and mandatory payroll withholdings, the standardized national and local allowances for food, housing, utilities, and transportation, actual health-care costs, and required payments on a car loan and any priority debts. After all of those allowed deductions, the filer's monthly disposable income turns out to be small — not nearly enough to fund a meaningful five-year repayment plan. Because the disposable-income figure is low, no presumption of abuse arises, and Chapter 7 remains available even though the filer started out over the median. This is why being above the median line is a reason to do the full calculation, not a reason to give up on Chapter 7.

What happens if you do not pass

Failing the means test does not mean you cannot file bankruptcy — it means Chapter 7 is presumed inappropriate, and your realistic path is Chapter 13. In Chapter 13 you keep your property and repay creditors through a plan funded by your income. The same income figures that determine whether you pass the means test also set your Chapter 13 plan length: three years if you are below the median, five years if you are above it. For many over-median filers, Chapter 13 still delivers substantial relief, discharging remaining qualifying balances at the end of the plan. To weigh the two routes, see our guide to Chapter 7 vs. Chapter 13 in California.

Special-circumstances exceptions

The Bankruptcy Code allows a filer who would otherwise fail to rebut the presumption of abuse by showing special circumstances — for example, a serious medical condition or a call to active military duty — that justify additional expenses or income adjustments with no reasonable alternative. There are also categories of filers, such as certain disabled veterans whose debts arose primarily during active duty, who may be exempt from the means test altogether. These exceptions are fact-specific and require documentation, so they are best handled with an attorney.

California and federal authority

The means test itself is federal law — it lives in the Bankruptcy Code at 11 U.S.C. § 707(b), and the disposable-income concept that drives Chapter 13 plan payments appears at 11 U.S.C. § 1325(b). The income figures are California-specific: the median family income comes from Census Bureau data published by the U.S. Trustee Program for California, and the expense standards come from national and local collection standards. California’s own contribution to a bankruptcy case is its exemption law — the property you keep — which is separate from the means test; see our guide to California bankruptcy exemptions.

Household size: who counts

Your household size drives which median figure applies, and a larger household means a higher income ceiling — so getting the count right matters. The Bankruptcy Code does not define “household” with perfect precision, and courts in California have used more than one approach. Some look at the number of dependents you claim on your tax return; others use a broader “heads on beds” approach that counts everyone who actually lives in your home and shares income and expenses, such as a non-filing spouse, children, or other relatives you support. A non-filing spouse’s income is generally included in the calculation (subject to a deduction for amounts not contributed to household expenses), even though that spouse is not filing. Because the right method can change whether you pass, household size is worth discussing with a California bankruptcy attorney, especially in blended or multi-generational households.

The marital-adjustment deduction

When a married person files alone, the means test still asks for the non-filing spouse’s income, but it allows a marital adjustment: you may deduct the portion of the non-filing spouse’s income that is not regularly contributed to the household’s expenses — for example, the spouse’s separate debt payments, support obligations from a prior relationship, or personal expenses. This deduction can be the difference between passing and failing for a married filer whose spouse earns income that does not actually fund the household. Documenting these amounts carefully is essential, because the trustee may scrutinize the adjustment.

Timing your filing around the test

Because the means test averages your income over the six full calendar months before the month you file, when you file can change the outcome. If you recently lost a job, took a pay cut, or had an unusually high six months because of overtime, a bonus, or seasonal work, waiting a month or two can drop the high-income months out of the look-back window and lower your average. Conversely, an upcoming raise or bonus might make filing sooner advantageous. This kind of timing strategy is legitimate and common, but it has to be balanced against other pressures — a looming garnishment or foreclosure may make waiting unwise. A bankruptcy attorney can help you find the filing date that gives you the best result without exposing you to harm in the meantime.

How to work through the means test

1. Determine your household size for bankruptcy purposes.
2. Add up your gross household income for the six full calendar months before the month you plan to file, then annualize it.
3. Compare that figure to the current California median for your household size.
4. If you are at or below the median, you pass — Chapter 7 is available.
5. If you are above the median, complete the second-stage form, subtracting the allowed standardized and actual expenses.
6. If your disposable income is low enough, no presumption of abuse arises and Chapter 7 remains available.
7. If the presumption of abuse applies, consider Chapter 13, or whether special circumstances may rebut the presumption.
8. Have a California bankruptcy attorney review the result before you file.

Frequently asked questions

What income period does the means test use?

It uses your average gross household income over the six full calendar months before the month you file, annualized. Because this is a backward-looking average, the timing of a raise, bonus, or job loss can change whether you pass.

Is Social Security counted?

Generally no. Social Security benefits are typically excluded from current monthly income for the means test, which can help retirees and disabled filers qualify for Chapter 7.

I am over the median — am I disqualified from Chapter 7?

Not necessarily. Being over the median sends you to the second-stage expense calculation. Many above-median filers still pass once allowed expenses are deducted, so do not assume you are barred.

How often do the median figures change?

The U.S. Trustee Program updates the California median-income figures periodically, generally in the spring and fall. Always use the figures in effect on your filing date, not an older table.

Does passing the means test mean I should file Chapter 7?

Passing means you are eligible, not that Chapter 7 is necessarily best. If you are behind on a mortgage or have nonexempt property to protect, Chapter 13 may still serve you better. A bankruptcy attorney can help you decide.

Which bankruptcy form is the means test completed on?

The Chapter 7 means test is completed on the official 122A series of bankruptcy forms. The first form handles the median-income comparison, and a second form in the series handles the disposable-income calculation for filers who are above the California median.

Does my non-filing spouse's income count?

Generally yes. A non-filing spouse's income is included in the means-test calculation, but you may take a marital adjustment to deduct the portion of that income not regularly contributed to household expenses — such as the spouse's separate debts, support obligations, or personal expenses. Documenting those amounts carefully is important because the trustee may scrutinize the adjustment.

Find a California bankruptcy attorney

The means test can be deceptively technical, especially in the second-stage calculation, and a small error can change your eligibility. Our directory connects you with attorneys licensed by the State Bar of California who handle bankruptcy across all 58 counties and all four federal districts — free to browse, with no obligation. For the full picture, start with our overview of bankruptcy in California, and to compare your options if you do not pass, read Chapter 7 vs. Chapter 13 in California.