2020 Median Income Limits for Bankruptcy Means Test

2020 median income

2020 Median Income Limits for Bankruptcy Means Test

The government recently updated the 2020 median income numbers. It again got easier to qualify for Chapter 7, because of another means test adjustment. The means test for bankruptcy decides who qualifies for Chapter 7 bankruptcy eligibility. The first step of this process is comparing your household income against the median income limits set by the Department Of Justice guidelines to see if you earn less than California median income limits. The means test limits adjusts.  So, someone may not qualify according to the means test in one month but after the changes they do, or vice-verse. The last updates were in November 2019, and are changing again with an April update. Here are the 2020 numbers to determine who can file Chapter 7.

Means Test: 2020 Median Income Adjustments

Every now and then, the government updates the median income limits. They last did it in November 2019. Good news: the California 2020 median income numbers are now even higher, increasing household income for bankruptcy means test qualifying. This means that more people could qualify for Chapter 7 bankruptcy using the California median income numbers below.

2020 Median Income for California Households

Because the California median income changes maybe once or twice a year, these recent changes late last year will be the latest numbers used for 2020 median income. You’ll see below there’s talk about household size. Notice also that larger families also get a break, as the amount for each additional member after 4 increases another $9,000. This is helpful for households of five people or more. It isn’t always clear who counts in a household. There may be a difference if you have a roommate who pays rent. What if you’re married? Or have kids but they’re adults. Do you live with your significant other, who has their own finances? They’re all in your household. Or, maybe they’re not. Call and let’s meet to talk about it. But below are the California median income limits for the various household sizes.

California household size and California median income for Bankruptcy
  • 1-person household: $59,286, but after April 1, 2020 it’s $60,360
  • 2-person household: $77,860, but after April 1, $79,271
  • 3-person household: $86,665, and after April 1, $88,235
  • 4-person household: $99,512, and after April 1, $101,315
  • Each additional person: $9,000

Read Our Means Test Guide.



2020 Median Income Isn’t Everything

A person can still file Chapter 7 bankruptcy, in some cases, even if they earn more than the median income. The bankruptcy means test would just need to be filled out completely. It’s still possible to qualify. However, even if someone isn’t eligible, there is still a way out in Chapter 13.

Finally, we don’t know the next time changes to the median income limits will happen again. So, be sure to check before relying on these California median income limits in the future.