The Chapter 7 means test -- the income threshold that determines whether a consumer debtor qualifies for Chapter 7 liquidation or must file under Chapter 13 -- is set to become more restrictive in April 2026 as updated Census Bureau median income figures take effect across most states.
How the Means Test Works
Under 11 U.S.C. section 707(b)(2), debtors with household income above the state median for their family size face a "presumption of abuse" if they file Chapter 7. These debtors must pass a detailed expense analysis or convert to Chapter 13, where they repay creditors over 3-5 years.
The U.S. Trustee Program updates median income figures periodically based on Census data and the Consumer Price Index. The April 2026 update reflects rising nominal wages that, paradoxically, may push more families above the means test threshold even as real purchasing power stagnates.
Key Changes for 2026
National trend: Median income thresholds are rising 3-5% in most states, tracking general wage inflation. However, because the means test compares gross income to state medians, families in high-cost-of-living areas may find themselves above the threshold despite persistent financial hardship.
| Household Size | 2025 National Median | 2026 Est. Median | Change |
|---|---|---|---|
| 1 person | $62,693 | $64,884 | +3.5% |
| 2 persons | $81,164 | $84,245 | +3.8% |
| 3 persons | $89,392 | $92,966 | +4.0% |
| 4 persons | $107,680 | $112,349 | +4.3% |
Sources: U.S. Census Bureau, U.S. Trustee Program. 2026 figures are estimates based on published CPI adjustments and pending USTP updates.
Impact on Filers
The practical effect is a narrowing of the Chapter 7 pathway for middle-income households. Consider a family of four in Missouri earning $110,000 -- comfortably below the 2026 threshold of $112,349 but potentially above it after including overtime, bonuses, or a spouse's part-time income.
For these borderline households, the difference between Chapter 7 (typically resolved in 4-6 months) and Chapter 13 (3-5 years of payments) is enormous. Practitioners should carefully evaluate all income sources and consider timing of filing relative to threshold updates.
State-by-State Variation
Median income thresholds differ substantially by state. States with higher costs of living generally have higher thresholds, but the relationship is imperfect. Some notable outliers:
- New Jersey, Connecticut, Maryland: Among the highest thresholds nationally, reflecting high median wages. More debtors qualify for Chapter 7 relative to income.
- Mississippi, West Virginia, Arkansas: Lowest thresholds. Even modest incomes can trigger the means test presumption of abuse.
- California, New York: High thresholds but extremely high costs of living can still push struggling families above the line.
The 1328(f) Discharge Eligibility Screener provides free, automated eligibility checks that account for filing date, case chapter, and discharge history. For detailed district-level data, visit the OBP Research Portal.
Methodology: All statistics in this article are derived from the Open Bankruptcy Project's analysis of 4.9 million federal bankruptcy case records obtained from the Federal Judicial Center's Integrated Database, supplemented by PACER docket data across 94 federal judicial districts. Data current as of March 2026.