What Are the Arkansas Chapter 7 Bankruptcy Income Limits?

The Arkansas Chapter 7 bankruptcy income limits for cases filed on or after April 1, 2026 start at $58,421 for a single earner and rise to $97,054 for a household of four. If your household income falls below the Arkansas median for your household size, you qualify for Chapter 7 without further income scrutiny. Earn more, and you have to pass a second calculation called the means test that measures disposable income after allowed expenses.

Arkansas Median Income by Household Size

The Department of Justice publishes updated median income figures roughly twice a year using Census Bureau data. For Chapter 7 cases filed on or after April 1, 2026, the Arkansas thresholds are:

One earner: $58,421
Two people: $73,630
Three people: $82,329
Four people: $97,054
Each additional person: add $11,100

The numbers that count are the ones in effect on the day you actually file, not the day you start preparing paperwork.¹ Come in below the median for your household size and the court does not apply the means test at all.

How Your Income Gets Calculated

The bankruptcy code defines “current monthly income” as the average of everything you received during the six full calendar months before the month you file. File on June 15 and the lookback runs December 1 through May 31. Every dollar of gross income during that window counts, taxable or not.²

What feeds into the calculation: wages, salary, overtime, bonuses, commissions, self-employment earnings, rental income, interest, dividends, pension payments, alimony, and child support you receive. Regular contributions from someone else toward your household expenses also count. If a parent pays your electric bill every month, that goes in.

Total the six months, divide by six for the monthly average, then multiply by twelve. That annualized figure is what gets compared to the Arkansas median.

What Doesn’t Count

Social Security benefits of any kind are excluded from the income calculation entirely. You still disclose them on your bankruptcy schedules, but they do not affect the means test figure. The same exclusion applies to payments received by victims of war crimes or terrorism, and to most military disability compensation, combat-related pay, and survivor benefits paid under federal military statutes.² For retirees and disabled veterans whose income looks high on paper but consists largely of protected benefits, this exclusion often decides eligibility.

Timing the Filing Date

The six-month window can help or hurt you. A large bonus or heavy overtime in the recent past inflates your average even when your normal earnings are modest. If a layoff just cut your income, earlier paychecks may still be pulling the average up. Waiting a month or two so a high-earning month falls outside the window can move a borderline filer under the median. Discuss timing with an attorney before locking in a filing date.

Household Size and Non-Filing Spouse Rules

Household size includes you, your spouse (even if they aren’t filing), and any dependents living with you. The court looks at who shares your living space as a single economic unit, not just who appears on your tax return. A partner splitting rent, an elderly parent you support, or a niece under your roof can all count, which raises the median threshold you have to beat.

If you’re married and your spouse isn’t filing with you, their income still goes into your means test calculation. The form requires you to report all of a non-filing spouse’s income for the same six-month lookback. A “marital adjustment” then lets you subtract the portion that goes toward their separate expenses rather than shared household costs. Credit card payments in your spouse’s name alone, child support from a prior relationship, or a car payment on a vehicle only they use are common examples. Bring account statements to back up any deduction you claim.

If You’re Over the Median: The Means Test

Filers whose annualized income exceeds the Arkansas median complete the full means test on Form 122A-2. The test subtracts standardized expenses from your monthly income to see how much disposable income remains. If the leftover is small enough, Chapter 7 is still available.³

Most of the allowed deductions come from IRS National and Local Standards rather than what you actually spend. National Standards set fixed amounts for food, clothing, personal care, and out-of-pocket healthcare, and you receive those amounts for your household size regardless of real spending.⁴ Local Standards cover housing, utilities, and transportation and vary by county. For housing, you typically get the lesser of what you actually spend or the Local Standard.⁵ Mandatory payroll deductions like income taxes, Social Security tax, and health insurance premiums come off your countable income too. Payments on secured debts like a mortgage or car loan also factor in.

When Abuse Is Presumed

After all allowed expenses come off, the remaining monthly disposable income gets multiplied by 60, representing a five-year repayment period. Hit certain dollar thresholds and the court presumes your Chapter 7 filing is an abuse of the system. As adjusted effective April 1, 2025:

Floor: $10,275 over 60 months, roughly $171 per month in disposable income
Cap: $17,150 over 60 months, roughly $286 per month

The actual trigger depends on the size of your unsecured debt. Abuse is presumed if your 60-month disposable income total is at least the lesser of 25 percent of your nonpriority unsecured claims (with a floor of $10,275) or $17,150.³ So if you owe $60,000 in credit card debt and have $175 per month in disposable income after allowed deductions, $175 times 60 comes to $10,500, which exceeds the $10,275 floor, and abuse would be presumed.

A presumption of abuse doesn’t automatically kill your case. You can rebut it by showing special circumstances such as a serious medical condition or a military deployment obligation that pushes your expenses beyond the standard allowances. Documentation has to be solid, and the U.S. Trustee’s office will scrutinize the claim. Fail to rebut it and the case gets dismissed or converted to a Chapter 13 repayment plan.

Who Skips the Income Test Entirely

Some filers bypass the means test regardless of income.

Disabled Veterans and Active Military

The means test does not apply to disabled veterans whose debts were primarily incurred during a period of active duty or homeland defense activity. The statute defines “disabled veteran” by reference to federal law, which generally requires a service-connected disability. A separate protection covers reservists and National Guard members called to active duty or homeland defense for at least 90 days after September 11, 2001; those service members are exempt from means testing during their service and for 540 days after release.³

Mostly Business or Other Non-Consumer Debt

If more than half your total debt comes from business operations, commercial investments, tax obligations, or other non-consumer sources, the means test doesn’t apply at all. The statute only triggers income testing for individuals whose debts are “primarily consumer debts,” which most courts read as more than 50 percent. So $80,000 from a failed business alongside $60,000 in personal credit card debt clears the threshold and skips the income analysis entirely.⁶ File Form 122A-1Supp with a detailed breakdown of your liabilities to claim the exemption.⁷

1
U.S. Trustee Program. Median Family Income Based on State/Territory and Family Size – On or After April 1, 2026
2
Office of the Law Revision Counsel. 11 USC 101 – Definitions
3
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
4
Internal Revenue Service. Collection Financial Standards
5
U.S. Trustee Program. Means Testing
6
United States Courts. Chapter 7 – Bankruptcy Basics
7
United States Courts. Official Form 122A-1Supp – Statement of Exemption from Presumption of Abuse Under 11 USC 707(b)(2)