To file Chapter 7 bankruptcy in Kentucky, your household income generally has to be at or below the state median for a household of your size. For cases filed between November 1, 2025, and March 31, 2026, a single filer qualifies automatically with annual income at or below $60,071.1U.S. Trustee Program. Census Bureau Median Family Income By Family Size Earn more than that and you aren’t shut out — you move to a second calculation called the means test, which looks at what’s left after allowed expenses. The Chapter 7 bankruptcy income limits in Kentucky are therefore two tests stacked on top of each other, and most filers only ever face the first.
Kentucky Median Income by Household Size
These are the current annual thresholds for Chapter 7 cases filed in Kentucky between November 1, 2025, and March 31, 2026:1U.S. Trustee Program. Census Bureau Median Family Income By Family Size
- 1 earner: $60,071
- 2 people: $71,998
- 3 people: $83,027
- 4 people: $106,637
- Add $11,100 for each person beyond four
Household size for this purpose is the number of people in your home, not just the number of people filing or earning. If your annualized income lands at or below the figure for your size, no one can argue that your Chapter 7 case is an abuse of the system under 11 U.S.C. § 707.2Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 You skip the means test and move into the rest of the process. The thresholds update twice a year, so anyone filing after March 31, 2026, should check the U.S. Trustee Program’s current table before relying on these numbers.
How the Income Number Is Actually Calculated
The figure you compare to the median isn’t last month’s pay or last year’s tax return. Federal bankruptcy law defines “current monthly income” as the average of all income you received during the six full calendar months before your filing date.3Office of the Law Revision Counsel. 11 USC 101 – Definitions File on July 15 and the lookback runs January 1 through June 30. Add the gross income from those six months, divide by six for a monthly average, then multiply by twelve to compare against the annual thresholds above.
What counts is broad: wages, salary, business income, interest, dividends, rental income, pension payments, and even regular financial contributions from someone else in the household. A single strong month inside the lookback window can lift your average above where your current reality sits, so the choice of filing date can meaningfully shift which six months land in the calculation.
A few income types are left out entirely. Social Security benefits don’t count, and neither do payments to victims of war crimes or terrorism or certain military disability compensation.3Office of the Law Revision Counsel. 11 USC 101 – Definitions If Social Security is the bulk of what you live on, your calculated monthly income can be dramatically lower than your actual household cash flow, which usually drops you well under the median.
The Marital Adjustment for Non-Filing Spouses
A married person who files individually has to include the non-filing spouse’s income in the initial calculation. That alone pushes some couples over the Kentucky median when only one spouse has the debt problem. The marital adjustment on Official Form 122A-2 lets the filer subtract any portion of the non-filing spouse’s income that doesn’t go toward household expenses.4United States Courts. Official Form 122A-2 Chapter 7 Means Test Calculation
Typical deductions include the non-filing spouse’s own credit card payments, child support or alimony from a prior relationship, and tax debts paid individually. Documentation matters here — account statements and payment records for each category. A large enough adjustment can drop household income back under the median and end the income analysis.
If You’re Over the Median: The Means Test
Being above the Kentucky median doesn’t disqualify you. It just moves you to a second calculation. The means test subtracts a mix of actual expenses and IRS-standardized allowances from your current monthly income to see whether you have enough disposable income to repay a meaningful share of your debts.2Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
The IRS publishes National Standards for food, clothing, and out-of-pocket healthcare, plus Local Standards for housing and transportation that vary by county and family size.5Internal Revenue Service. Collection Financial Standards You get the full National Standard regardless of what you actually spend. For housing and transportation, you get the lesser of the local standard or your actual cost. On top of those, you deduct actual amounts for taxes, mandatory payroll deductions, health insurance, childcare, and charitable contributions.
After deductions, you multiply remaining monthly disposable income by 60 (five years of hypothetical payments). The result decides the outcome:
- Below $10,275 over 60 months: no presumption of abuse. You pass and proceed with Chapter 7.
- Between $10,275 and $17,150: abuse is presumed only if that amount would cover at least 25% of your nonpriority unsecured debts.
- $17,150 or more: abuse is presumed regardless of debt total, and Chapter 13 is the likely path.
Those dollar figures are periodically adjusted.6United States Courts. Chapter 7 – Bankruptcy Basics In monthly terms, the dividing line sits roughly between $171 and $286 of disposable income. Filers over the threshold can still try to rebut the presumption by showing special circumstances, such as a serious medical condition, a call to active military duty, or a recent involuntary job loss that makes the raw numbers misleading.
Military and Disabled Veteran Exemptions
Federal law carves out income-based exemptions for service members that sit outside the median and means test framework.
National Guard members and reservists called to active duty or performing homeland defense activity for at least 90 days after September 11, 2001, are exempt from the means test entirely while on active duty and for 540 days afterward. Once that 540-day window closes, the standard means test rules return.
Disabled veterans get a permanent exemption if two conditions are met: a VA disability rating of at least 30% (or discharge due to a service-connected disability), and debts incurred while on active duty or performing homeland defense activity. Qualifying veterans file a “Statement of Exemption from Presumption of Abuse Under § 707(b)(2)” to claim it. One wrinkle to understand: veterans’ benefits still count as income when calculating current monthly income for the standard analysis. The exemption removes the means test itself, not the dollars from the math.
Which Forms Capture the Income Analysis
The income side of qualifying runs through two federal forms. Official Form 122A-1 handles the six-month average and the comparison to the Kentucky median.7United States Courts. Official Form 122A-1 Chapter 7 Statement of Your Current Monthly Income If you come in under the median, that form is all the income analysis you need. If you’re over, Official Form 122A-2 handles the detailed expense deductions and the disposable income computation that determines whether abuse is presumed.4United States Courts. Official Form 122A-2 Chapter 7 Means Test Calculation
Because the median figures and the means test thresholds both change on published schedules, confirm the numbers in effect on your intended filing date rather than relying on figures from an earlier case or an older article. A difference of a few hundred dollars in the median, or a shift in your six-month lookback window, can be the difference between skipping the means test and sitting down to work through it.