Arizona Chapter 7 Bankruptcy Income Limits: Median and Means Test

To qualify for Chapter 7 bankruptcy in Arizona based on income, your household’s annualized earnings must fall below the state median published by the U.S. Trustee Program. For cases filed between November 1, 2025 and March 31, 2026, that median is $72,039 for a single filer and $118,067 for a four-person household.¹ Earning more than that doesn’t disqualify you. It only sends you to a second calculation, the means test, where your expenses may still bring you under the line.

Current Arizona Income Thresholds by Household Size

These are the figures in effect for Arizona Chapter 7 petitions filed between November 1, 2025 and March 31, 2026:¹

1 person: $72,039
2 people: $86,745
3 people: $102,274
4 people: $118,067
Each additional person: add $11,100

The U.S. Trustee Program revises these numbers every six months, so confirm the current figures on the Trustee’s website before you file. If your annualized current monthly income is below your household’s threshold, you’ve passed the income screen and can proceed without working through the full means test. If you’re above, you still have a path forward, but you’ll need to complete additional paperwork.

How to Calculate Your Income for the Test

The income figure that matters is not what you’re earning today. Federal law defines “current monthly income” as the average of everything you received during the six full calendar months before you file.² File on March 15 and the lookback runs from September 1 through February 28. Add up every dollar received during those six months, divide by six for the monthly figure, then multiply by twelve for the annual number you compare against the Arizona median.

What goes into that total: wages, salary, business revenue, rental income, retirement distributions, and regular contributions from anyone who helps pay your household expenses, including a non-filing spouse.² That last piece surprises people. A parent or partner who regularly covers your rent or your groceries is contributing income for means test purposes, even though the money never passed through your bank account. You report the current monthly income on Official Form 122A-1.³

Pull together your pay stubs, bank statements, tax returns, and any records of outside financial help covering the full six-month window. Accuracy is not optional. Underreporting can lead to fraud allegations and dismissal.

Income That Doesn’t Count

Social Security benefits are excluded from the means test calculation entirely.² Retirees and disabled filers whose main income is Social Security usually land well below the Arizona threshold no matter their household size. The same statute excludes certain military disability pay, combat-related compensation, and payments to victims of terrorism or war crimes.

One catch: even though Social Security stays off the means test forms, you still disclose it on Schedule I as part of your current budget. If your schedules show substantial money left over each month after expenses, the trustee can still question your Chapter 7 filing on general abuse grounds even after you’ve passed the income screen.

Counting Your Household Correctly

Household size controls which threshold applies, and it can swing the outcome. A single filer earning $80,000 is above the one-person median of $72,039 but comfortably below the two-person figure of $86,745. Courts have not settled on a single counting method, and three approaches show up in bankruptcy cases.

The “heads on beds” approach counts everyone living in your home as their primary residence, regardless of financial support. The economic unit approach counts only people whose finances are genuinely intertwined with yours, such as a partner who shares bills. The tax dependent test counts only people you claim as dependents on your return. Arizona courts have discretion to apply whichever approach fits your situation.

In practice, children you support financially almost always count. A roommate who pays their own way and files their own taxes usually does not. In split-custody cases, courts often look at how much of the time the child lives with you. When your household size is ambiguous, document your living arrangements carefully, because the trustee will ask.

If Your Income Is Above the Median: The Means Test

Being above the Arizona median triggers step two: Official Form 122A-2. The means test is a two-step process in federal bankruptcy law designed to steer people with enough income to repay their debts away from Chapter 7.⁴ Form 122A-2 subtracts IRS-approved living expenses, secured debt payments, and certain priority obligations from your monthly income.⁵ The remaining amount, your theoretical disposable income, is multiplied by 60 months.

If that five-year total is less than $10,275 (or less than 25% of your unsecured debts, whichever is greater), no presumption of abuse arises and you can proceed with Chapter 7. If the total reaches $17,150 or more, the court presumes abuse. A presumption isn’t the end of the case. You can rebut it by showing special circumstances, such as a serious medical condition or a military deployment obligation, that justify higher expenses than the standard allowances permit.⁶ If you can’t overcome it, the court will dismiss the case or convert it to Chapter 13.

The Expense Allowances Are Standardized

The expenses on Form 122A-2 are not what you actually spend. The form uses standardized IRS allowances for basic living costs: food, clothing, housekeeping supplies, personal care, and miscellaneous expenses.⁷ A single person’s combined monthly allowance across those categories runs roughly $839, and a four-person household gets about $2,129. Housing and transportation use local standards based on your Arizona county, which tend to be more generous than the national figures. You can also deduct actual payments on secured debts like a mortgage or car loan, required tax withholdings, mandatory insurance premiums, and court-ordered obligations such as child support.

Filers Who Skip the Income Test Altogether

Two groups bypass the means test regardless of income.

Veterans with any disability rating from the VA or Department of Defense are exempt if at least half their debt was incurred while on active duty or performing homeland defense activity. Even a 10% rating qualifies. The exemption is documented on Official Form 122A-1Supp instead of the full means test.⁵

Debtors whose obligations are primarily non-consumer, meaning more than half their total debt comes from business losses, investment obligations, tax liabilities, or similar non-personal spending, are also exempt from the presumption of abuse.⁴ A failed small-business owner carrying $60,000 in business credit card debt and $30,000 in personal medical bills, for example, uses the supplemental exemption form rather than working through the income analysis.

One Final Qualification Rule

Income is only one eligibility test. You cannot receive a Chapter 7 discharge if you received one in a prior case filed within the last eight years, measured from filing date to filing date rather than from the earlier discharge date.⁸ Every individual filer also has to complete a credit counseling briefing within the 180 days before filing, through a provider approved by the U.S. Trustee Program for the District of Arizona.⁹ Passing the income limits gets you to the starting line; these conditions keep you there.

1
United States Department of Justice. Median Family Income Table – November 2025
2
Office of the Law Revision Counsel. 11 US Code 101 – Definitions
3
United States Courts. Official Form 122A-1 Chapter 7 Statement of Your Current Monthly Income
4
Office of the Law Revision Counsel. 11 US Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
5
United States Department of Justice. Means Testing
6
United States Courts. Chapter 7 – Bankruptcy Basics
7
Internal Revenue Service. National Standards: Food, Clothing and Other Items
8
Office of the Law Revision Counsel. 11 US Code 727 – Discharge
9
Office of the Law Revision Counsel. 11 US Code 109 – Who May Be a Debtor