The California economy (until this week’s Coronavirus outbreak) is sitting pretty, and its citizens are earning income. The numbers used to qualify for a “straight bankruptcy” have broken some very notable milestones. Starting on April 1, 2020, the California median income for a household of one has broken the $60,000 threshold. The median income for a household of one in the Golden State is now $60,360.
Even more amazing, a family of four has a California median income of $101,315. This is the first time in recent memory, if ever, that a median household of four in Calif has earned six figures.
The significance of these numbers — $60,000 and $100,000 — applies to bankruptcy. The Department of Justice uses numbers from the Census as a preliminary measuring stick. They’re used to assess whether a debtor or debtors qualify for Chapter 7 bankruptcy. Not everyone is eligible, with the alternative being debt repayment with high income. In theory, people earning $60,000 and $100,000 would ave a relatively easy time doing a bankruptcy and not repaying their debt.
See our median income article for a more thorough explanation. Also, you’ll find updated numbers, and the median income amounts used for other household sizes. The values change frequently, and by the time you read this page may have gone down due to COVID-19’s impact on the economy, so check that link for the latest amounts.