Passing the Chapter 7 means test in California

Income The results of a Chapter 7 means test are based on a bankruptcy filer’s total household income even if their spouse is not seeking debt relief. This figure is then compared to state median incomes taken from U.S. Census data. In 2022, the figures for California were:

1. $69,660 for a one-person household

2. $86,271 for a two-person household

3. $97,021 for a three-person household

4. $113,615 for a four-person household

5. $123,515 for a five-person household

6. $133,415 for a six-person household

7. $143,315 for a seven-person household

8. $153,215 for an eight-person household

9. $163,115 for a nine-person household

Expenses If your income is lower than the above figure corresponding to your household size, you qualify for a Chapter 7 bankruptcy and do not have to take the second part of the test. If you earn more, you will have to list your deductible expenses to determine your disposable income. This is the amount that you could use to pay your creditors. Allowable expenses include union dues, alimony and child support payments, life insurance premiums and child care expenses.

Most pass the means test Most people who file Chapter 7 bankruptcies are in dire financial situations, which means they rarely have much disposable income. If you are finding it difficult to make ends meet, you should not worry too much about the Chapter 7 means test. This test was introduced to stop people taking advantage of the bankruptcy laws. It was not created to deny people the chance to escape from overwhelming debt.