When an individual is considering filing for bankruptcy, one of the most important threshold issues is whether they are subject to the “Means Test” under 11 U.S.C. § 707(b). This test determines whether a debtor with primarily consumer debt may qualify for Chapter 7 bankruptcy or instead must file under Chapter 13. As of April 1, 2026, the United States Trustee Program, which is part of the Department of Justice, has updated the median household income figures used in the Means Test, a budget test that is in the Bankruptcy Code. These figures are revised periodically based on data from the Census Bureau and play a critical role in determining eligibility for Chapter 7 bankruptcy.
Updated New York Median Income Figures (April 1, 2026)
For cases filed on or after April 1, 2026, the median household income figures for New York are:
- Household of 1: $73,272
- Household of 2: $92,902
- Household of 3: $115,579
- Household of 4: $139,040
Add $11,100 for each additional household member
Comparison to Prior Figures (November 1, 2025)
The prior figures (effective November 1, 2025 through March 31, 2026) were:
- Household of 1: $71,393
- Household of 2: $90,520
- Household of 3: $112,616
- Household of 4: $135,475
What Changed?
Across all household sizes, the median income thresholds have increased: +$1,879 (household of 1), +$2,382 (household of 2), +$2,963 (household of 3), and +$3,565 (household of 4). This continued upward trend means that more New Yorkers may now fall below the median income threshold, potentially qualifying for Chapter 7 without being subject to the Means Test.
When Does the Means Test Apply?
Not every bankruptcy case requires a Means Test. The Means Test generally applies only when the debtor’s debts are primarily consumer debts and the debtor’s income exceeds the median income for their household size. If a debtor’s income is below the median, they typically qualify for Chapter 7 bankruptcy from an income standpoint but if it is above the threshold, a more detailed review of their income and expenses is required through the means test. There are also important exceptions, as the Means Test does not apply to debtors with primarily business-related debt, certain disabled veterans, and certain active-duty military personnel and reservists.
What Income is Included in the Means Test?
The Means Test includes nearly all sources of household income, such as wages, bonuses, and commissions, self-employment income, unemployment and workers’ compensation, and rental or investment income. Household income is broadly defined, meaning a spouse’s income is included even if only one spouse files, unless the spouses are separated and do not reside together. However, certain types of income are excluded from the calculation, including Social Security benefits, veterans’ disability benefits, and certain military-related benefits.
What Expenses Are Allowed in the Means Test?
After calculating income, the Means Test uses IRS local and regional standards for most of a debtor’s expenses. They cover housing, food, and transportation. These standards are not generous and may not reflect your actual monthly expenses for these important expense categories. However, the test allows for deductions of certain actual expenses to determine whether a debtor has disposable income.
Some of these actual expenses include:
- Secured debt payments, such as a mortgage, or vehicle loans or leases,
- Income taxes,
- Court-ordered obligations, such as child support and alimony,
- Mandatory payroll deductions, such as union dues or uniform costs,
- Charitable contributions,
- Care expenses for elderly or disabled family members
- Childcare expenses, such as babysitting, daycare, nursery, and preschool. (This does not include payments for any elementary or secondary school education.)
While Means Test income thresholds have increased, the IRS expense standards used in the Means Test do not always keep pace with real-world inflation. Since these IRS expense standards may lag behind actual costs, debtors may appear to have more disposable income in the Means Test than they truly do. If there is a sufficient surplus of disposable income in the test calculations, a debtor would be required to file under Chapter 13 instead of Chapter 7. However, it should be noted that just being above the median income does not automatically disqualify you from filing for Chapter 7 bankruptcy. Many individuals still pass the Means Test after accounting for their allowable expenses.
Why These Updated Figures Matter
Since the median income thresholds have increased as of April 1, 2026, more individuals may now more easily qualify for Chapter 7 bankruptcy, and some borderline cases from late 2025 may now fall below the median. The April 1, 2026 updates reflect a continued upward adjustment in income thresholds, which may expand access to Chapter 7 relief for many New Yorkers.
Contact the Law Offices of David I. Pankin, P.C.
When contemplating filing for bankruptcy, you should not rely solely on online calculators or AI to calculate a Means Test result. If you have questions about the Means Test or your eligibility to file for bankruptcy, please contact the Law Offices of David I. Pankin, P.C. at (888) 529-9600 or through our online contact form. Our experienced bankruptcy legal team has helped over 15,000 New Yorker successfully navigate the bankruptcy process and can help you determine the best path towards a financial fresh start.
