Means test · Beverly Hills
California Median Income Figures for the Means Test
The California median income figure for the means test is the first number that decides if you can file Chapter 7. If your household income is at or below the median for your household size, you pass the first part of the test. Call (310) 362-9071 and we will compare your income to the current figure for free.
- The median depends on how many people live in your household.
- Your income is a six-month average, not last year's tax return.
- The U.S. Trustee Program updates the figures from time to time.
At a glance
What the California median income figure is
The California median income figure is the middle income for a California household of your size. Half of households earn more and half earn less.
Bankruptcy law uses this figure as a dividing line. If your income is at or below the median, you pass the means test and Chapter 7 is open to you. If your income is above it, you are not shut out. You move on to a second step that subtracts allowed expenses.
The figures come from Census data. The U.S. Trustee Program publishes them in a table by state and household size. The table changes from time to time, often more than once a year. A filing date can decide which table applies to you, so we always check the one in effect on the day you file.
| Household size | Median yearly income |
|---|---|
| 1 person | $79,253 |
| 2 people | $102,797 |
| 3 people | $116,541 |
| 4 people | $139,071 |
| Each person over 4 | add $11,100 |
Source: U.S. Trustee Program, means testing data.
Household size matters a lot. A one-person household has a much lower median than a family of four. For households larger than four, the table adds a set amount for each extra person. We count your household with you, since it is not always just the people on your lease.
How your income is figured: the six-month average
Your income for the means test is called "current monthly income." It is not your salary today. It is the average of your gross income over the six full calendar months before you file.
- Pick the six months. If you file in July, the months are January through June.
- Add up gross income. Use income before taxes and payroll deductions, not take-home pay.
- Divide by six. That gives your current monthly income.
- Multiply by 12. Compare that yearly number to the California median for your household size.
Because the test looks back six months, timing can change the result. A recent job loss pulls your average down each month. A one-time bonus can push it up until it drops out of the window.
What counts as income and what does not
Most money that comes in on a regular basis counts. A few types of income are left out by law.
| Usually counts | Does not count |
|---|---|
| Wages, salary, tips and commissions | Social Security benefits |
| Business income, after ordinary business expenses | Money you borrow |
| Rent and other income from property | |
| Child support or alimony you receive | |
| Regular help from family toward household bills | |
| Pension and retirement income | |
| Unemployment benefits (in most cases) |
Courts do not all agree on how to treat unemployment benefits. We look at the rule that applies in your case before we decide.
If you are married, your spouse's income usually counts even if only you file. Part of it can be taken out when it pays your spouse's own separate bills. Our page on Chapter 7 for married couples explains how that works.
Examples with round numbers
These examples use made-up round numbers to show the math. They are not the actual median figures.
Steady paycheck. You earn $5,000 a month in gross wages for all six months. Six months total $30,000. Divided by six, your current monthly income is $5,000. Times 12, that is $60,000 a year. You compare $60,000 to the median for your household size.
Recent job loss. You earned $8,000 a month for three months, then nothing for three months. Six months total $24,000. Divided by six, your current monthly income is $4,000. Times 12, that is $48,000 a year, even though you earn nothing now. Waiting another month or two would lower it further.
Retiree on Social Security. You receive $2,500 a month in Social Security and $1,000 a month from a pension. Only the pension counts. Your yearly figure for the test is $12,000.
Common mistakes with the median income test
- Using last year's tax return. The test uses the last six months, not the last tax year.
- Using take-home pay. Start with gross income before taxes and deductions.
- Using an old table. The figures change. The one in effect on your filing date is the one that counts.
- Getting household size wrong. Leaving out a child or adding a roommate can change your median.
- Forgetting regular help from others. Money a relative pays toward your household bills each month usually counts.
If you are above the median, the next step uses IRS expense standards for Los Angeles County. Many local households pass at that step. If you do not, Chapter 13 bankruptcy is the usual option, and the median also sets how long your plan lasts: 3 years if you are below it, 5 years if you are at or above it. See Chapter 7 vs Chapter 13 for how the two compare, or start with our Chapter 7 bankruptcy overview.
What it costs
- Chapter 7: flat attorney fee from $1,200, plus the $338 court filing fee
- Chapter 13: attorney fee quoted in writing, and part of it can be paid through the plan
- Payment plans are available, and the first consultation is free
More on Chapter 7 bankruptcy
- Chapter 7 bankruptcy in Beverly Hills
- California Median Income Figures for the Means Test
- What Debts Are Wiped Out in Chapter 7
- Debts Chapter 7 Will Not Discharge
- Can I Keep My Car in Chapter 7?
- Can I Keep My House in Chapter 7?
- The Chapter 7 Timeline, From Filing to Discharge
- What the Chapter 7 Trustee Looks For
- Filing Chapter 7 With No Income or Between Jobs
- Filing a Second Chapter 7: The Eight-Year Rule
- Chapter 7 for Married Couples: Filing Alone or Together
- What Happens at the 341 Meeting of Creditors
- Redeeming a Car in Chapter 7
- Means test evaluation
- Reaffirmation agreements
Median income questions
What is the California median income for the means test?
The California median income for the means test is a set yearly figure for each household size, published by the U.S. Trustee Program. It changes from time to time. We check the table in effect on your filing date at your free consultation.
Is the median income based on my gross or net pay?
The median income test is based on your gross pay, before taxes and deductions. Using take-home pay is one of the most common mistakes people make when they try the test on their own.
Does Social Security count toward the median income test?
No, Social Security benefits do not count toward the median income test. Pensions, wages, rent and support you receive usually do.
What happens if my income is above the California median?
If your income is above the California median, you go to the second part of the means test. It subtracts allowed expenses from your income. Many people in Los Angeles still qualify for Chapter 7 after that step.
Can I wait to file so my income drops below the median?
Yes, waiting to file can lower your six-month average if your income recently dropped. Waiting is not always safe if you face a lawsuit, garnishment or foreclosure. We can tell you the earliest month you would pass and weigh that against the risk of waiting.
Free consultation
Find out if you are under the median
Call (310) 362-9071 or send the form. Bring six months of pay stubs and we will compare your income to the current California figure for free.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.