Chapter 7 Means Test in California: Income Limits & Allowances

In California, you pass the Chapter 7 means test automatically if your household’s annualized income for the six months before filing is below the state median for your household size: $77,221 for one person, $100,161 for two, $113,553 for three, and $135,505 for four, with $11,100 added for each additional person. These figures apply to cases filed between November 1, 2025, and March 31, 2026.¹ If you’re under the line, nothing else in the test matters. If you’re over it, you move to a detailed calculation that compares standardized expense allowances to your income to see whether a court would call your filing an abuse of the Chapter 7 system.

The California Median Income Line

The test does not look at your current paycheck. It looks at your “current monthly income,” which is your average monthly income from all sources over the six full calendar months before your filing date, annualized by multiplying by twelve.² Compare that annual figure to the California median for your household size:

1 person: $77,221
2 people: $100,161
3 people: $113,553
4 people: $135,505
Each additional person: add $11,100

These numbers come from Census Bureau data published by the U.S. Trustee Program and change roughly every six months, so confirm the figure for the window in which you plan to file.¹ Under the line, you’re done with the means test. Over the line, keep reading.

What Counts as Income

Current monthly income includes wages, salary, tips, bonuses, commissions, rental income, business income, pension payments, unemployment compensation, and regular contributions from anyone else toward your household expenses.² If a parent or partner regularly pays part of your rent or utilities, that counts even though the money never touches your account.

The biggest exclusion that catches California filers off guard is Social Security. Benefits received under the Social Security Act, including retirement, SSDI, and survivor benefits, are completely excluded from the means test calculation. For retirees and disabled filers living primarily on Social Security, that exclusion alone can drop countable income below the median. Keep in mind that Social Security still appears on Schedule I when the court evaluates your overall budget; it just isn’t part of the means test math. Military disability pay, certain combat-related compensation, and payments to victims of war crimes or terrorism are also excluded.²

When Only One Spouse Files

If you’re married and filing alone, your spouse’s income still goes into the initial calculation. California’s community property rules make this especially relevant. Form 122A-2 provides a “marital adjustment” on Line 3 that lets you subtract the portion of your spouse’s income that doesn’t go toward your household expenses or your dependents’ expenses.³ If your spouse earns $3,000 a month but $800 goes to their own student loans and separate tax debt, you can deduct that $800. You have to itemize each expense and its amount on the form.

The Full Means Test for Over-Median Filers

If your annualized income exceeds the California median, you fill out Form 122A-2.⁴ The form doesn’t ask what you actually spend. It assigns you standardized expense allowances based on IRS National and Local Standards, then checks whether your income minus those allowances leaves enough to fund a repayment plan.

IRS Standardized Allowances

The IRS publishes national allowances for food, clothing, housekeeping supplies, personal care, and similar living expenses. Every household of the same size gets the same deduction for these categories regardless of where in California they live.

Housing and transportation use local standards that vary by county, and the spread is enormous. The housing allowance for a single filer in Marin County is $4,314 a month; in Modoc County it’s $1,549. Los Angeles County sits at $2,999 and San Francisco County at $4,181 for a single person.⁵ A Bay Area filer and a Central Valley filer with identical paychecks will reach very different results on the same form.

Actual Expenses You Can Add

On top of the standard allowances, Form 122A-2 lets you deduct certain real expenses: health insurance premiums, court-ordered child support or alimony, mandatory payroll deductions beyond taxes, childcare costs, education expenses for dependent children under 18 (up to a capped monthly amount per child), and care expenses for elderly or disabled household members.⁴ Each line needs documentation, so pull pay stubs, insurance statements, and court orders before you start.

How the Pass/Fail Numbers Work

Subtract all allowed deductions from your current monthly income to get a monthly disposable income figure. Multiply that by 60 for a five-year total. Where that 60-month total lands decides the case:⁴

Below $9,075: no presumption of abuse. You pass.
Above $15,150: presumption of abuse. The court presumes you can afford a repayment plan.
Between $9,075 and $15,150: the court compares your 60-month disposable income to 25% of your total nonpriority unsecured debt. Less than 25% and you pass; 25% or more and the presumption applies.

These dollar thresholds adjust periodically, so check the current form for the figures in effect on your filing date.

Who Skips the Means Test Entirely

Some filers never run the calculation regardless of income.

Disabled veterans whose debts were incurred primarily while on active duty or performing a homeland defense activity are exempt from means testing. You qualify with a disability rating of at least 30% or if you were discharged because of a service-connected disability.⁶

National Guard members and reservists called to active duty or homeland defense activities for at least 90 days after September 11, 2001 are also exempt during the entire period of active duty plus 540 days after release.⁶ File within that window and you attach Form 122A-1Supp to claim the exemption.⁷

The means test also applies only when your debts are “primarily consumer” in nature. If more than half your total debt comes from business operations, professional investments, or similar non-consumer obligations, the test doesn’t apply.⁸ Classifying debt correctly takes care. A credit card used 60% for business supplies and 40% for groceries is a mixed bag, and the court will look closely at how you’ve drawn the line.

Rebutting a Presumption of Abuse

Triggering the presumption doesn’t automatically end your Chapter 7 case. You can rebut it by showing “special circumstances” that make the standard calculation misleading.⁶ The statute names a serious medical condition or a military call to active duty as examples, but courts have recognized others where income or expenses during the six-month lookback don’t reflect the filer’s real ongoing finances.

Most contested means test cases are won or lost here. You need to document the special circumstance thoroughly and show the standard calculation has no reasonable way to account for it. A one-time bonus that inflated your six-month average, a job loss after the lookback period ended, or recurring medical expenses above the IRS health care allowance are the kinds of facts that carry this argument. Vague claims about financial hardship without supporting records will not get you past the U.S. Trustee’s review.⁸

What Happens If You Fail

If the presumption stands and you can’t rebut it, the court or the U.S. Trustee can move to dismiss your Chapter 7 case or, with your consent, convert it to Chapter 13.⁶ Most people who fail end up in Chapter 13, repaying a portion of their unsecured debt over three to five years based on their disposable income.

Dismissal has its own costs. You cannot refile for 180 days if your case was dismissed because you failed to follow court orders, or if you voluntarily dismissed after a creditor sought relief from the automatic stay.⁹ Even outside those triggers, a dismissed filing stays on the court record and makes a later case harder. Dealing with a likely means test failure before filing almost always beats dealing with it afterward.

Timing the Filing

Because the test uses a six-month income average, when you file can matter as much as what you earn. A big bonus, severance payment, or stretch of heavy overtime inflates your average. Waiting until those months drop out of the lookback window can push your calculated income below the California median.

The reverse applies if your income has fallen. File now and the higher-earning months are still in the average; wait a few months and lower-income months replace them. This is not gaming the system. The statute explicitly uses a backward-looking average and courts expect filers to understand how it works. Timing has limits, though. Creditor lawsuits, wage garnishments, and other pressures often don’t leave room to wait for the ideal window.

1
United States Department of Justice. Median Family Income Based on State/Territory and Family Size
2
Office of the Law Revision Counsel. 11 USC 101 – Definitions
3
United States Bankruptcy Court Central District of California. Official Form 122A-2 – Chapter 7 Means Test Calculation
4
United States Courts. Official Form 122A-2 – Chapter 7 Means Test Calculation
5
Internal Revenue Service. Allowable Living Expenses Housing Standards
6
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
7
United States Courts. Official Form 122A-1 – Chapter 7 Statement of Your Current Monthly Income
8
United States Courts. Chapter 7 – Bankruptcy Basics
9
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor