If you've started looking into filing for bankruptcy in New Jersey, you've probably come across the phrase “means test” and wondered whether your paycheck disqualifies you from Chapter 7 bankruptcy. Here's something a lot of people don't realize: the income figure your household gets measured against isn't fixed. It's tied to U.S. Census Bureau data, and the government updates it periodically. The most recent update applies to cases filed on or after July 15, 2026, and if you ran your own numbers even a few months ago, it's worth running them again. Qualifying for Chapter 7 in New Jersey right now may look a little different than it did last year.
What the Means Test Is Actually Checking
The means test exists to answer one question: does your income suggest you can afford to pay something back to creditors, or does it make more sense to let Chapter 7 wipe out your qualifying unsecured debt? It's a federal requirement, and it applies in every bankruptcy court in the country, including the U.S. Bankruptcy Court for the District of New Jersey.
The first step compares your “current monthly income,” averaged over the six months before you file, to the median income for a household of your size in New Jersey. That figure comes from the U.S. Trustee Program's published median income data, the office within the Department of Justice that oversees bankruptcy case administration and updates these numbers using Census Bureau survey data.
If Your Income Is at or Below the Median, the Math Stops There
Here's the part that tends to bring people some relief once they understand it. According to the federal judiciary's own explanation of Chapter 7, when a filer's current monthly income falls at or below New Jersey's median for their household size, the means test simply does not apply. There's no presumption that filing Chapter 7 would be “abusive,” and no further income-based calculation is required before moving forward.
New Jersey's Updated Median Family Income Figures
For cases filed on or after July 15, 2026, the median family income figures for New Jersey are:
| Household Size | Median Annual Income |
|---|---|
| 1 person | $87,173 |
| 2 people | $106,876 |
| 3 people | $137,136 |
| 4 people | $168,127 |
| Each additional person | Add $11,100 |
A few things are worth keeping in mind about these numbers. They reflect gross income, not take-home pay, and they're based on a full six-month look back rather than a single pay stub or your expected income going forward. A temporary layoff, a bonus you received six months ago, or overtime that's since dried up can all shift where your household actually lands.
What Happens If Your Income Is Above the Median
Crossing the median line doesn't take Chapter 7 off the table. It means the analysis continues to a more detailed calculation that factors in allowed monthly expenses, secured debt payments like a mortgage or car loan, and other adjustments. Under the current version of that formula, a presumption of abuse arises only if the debtor's income left over after those deductions, projected out over five years, is not less than the lesser of 25 percent of nonpriority unsecured debt or $10,275, whichever is greater, or $17,150 outright. Even then, a filer can try to rebut that presumption by pointing to special circumstances that justify additional expenses or adjustments to income.
In practice, that calculation has enough moving parts that two households with identical gross income can land on very different outcomes depending on their expenses, secured debts, and family size. We've walked through that fuller three-part calculation step by step in our guide to the Chapter 7 bankruptcy means test, which is worth a read if you want to see how the expense side of the formula actually works.
Many times after our NJ attorneys meet with clients, we are still able to qualify they for Chapter 7. If you are over the median income level you can go through the means test, which is a legal way for saying taking your allowable expenses that are over the standard categories and showing there is no disposable income left. This happens many time in NJ because of how high expenses are in our state. If you are over the median income level and think you do not qualify, then call one of our NJ attorneys to discuss.
Moreover, even if you do have disposable income after going through these steps, you may be able to pay a minimum amount in a Chapter 13 to unsecured creditors. This will all depend on your disposable income after walking through the formulas.
Why Chapter 13 Filers Should Pay Attention Too
The median income figure isn't just a Chapter 7 gatekeeper. For Chapter 13 bankruptcy, it helps determine how long your repayment plan has to run. Filers whose income falls below the state median typically qualify for a three-year plan, while those above it are generally looking at five years. The same income calculation also serves as a starting point for figuring out how much disposable income needs to go toward unsecured debt over the life of the plan.
Why These Figures Keep Moving
These updates aren't new legislation, and nobody in Trenton or Washington is voting on them. They're a routine administrative adjustment tied to how median family income shifts in Census Bureau survey data. New Jersey's figures have been revised more than once over the past year as that data has been refreshed, which is exactly why it matters which effective date you're looking at when you search for “bankruptcy income limits in New Jersey.” A number that was accurate six months ago may not be the number that applies to your filing today.
What to Gather Before You Run the Numbers Yourself
If you want a realistic sense of where you stand before meeting with an attorney, it helps to have a few things in hand: your last six months of pay stubs or, if you're self-employed, profit and loss records for that same period; your most recent tax return; a list of your monthly household expenses; and documentation of any secured debts like a mortgage, car loan, or home equity line. Irregular income, whether from self-employment, commissions, seasonal work, or a recent job change, tends to be where the calculation gets complicated, and it's usually where having someone double-check the math pays off.
Self-Employed and Irregular Income Can Complicate the Calculation
The six-month lookback is straightforward for someone on a fixed salary. It gets messier fast for anyone whose income fluctuates, including contractors, gig workers, commission-based salespeople, seasonal employees, or small business owners. A single large payment, a slow season, or a one-time severance check can swing the average in ways that don't reflect what you actually expect to earn going forward. If your income doesn't look the same from month to month, it's worth having someone review a full six months of records rather than estimating based on a typical month, since the difference can determine which side of the median you land on.
What the Means Test Doesn't Tell You
None of this replaces a real conversation about your specific finances. The means test is only one piece of deciding whether Chapter 7 or Chapter 13 fits your situation, and it doesn't account for things like which debts you're trying to protect, whether you're behind on a mortgage, or whether you co-signed a loan with a family member. Two households with the same income can end up with very different bankruptcy strategies once those other factors are on the table. Timing matters too. Because the median income figures shift periodically, filing a few weeks earlier or later than planned can occasionally change which set of numbers applies to your case.
Talk to a New Jersey Bankruptcy Attorney Before You Assume Either Way
Scura, Wigfield, Heyer, Cammarota & Gonzalez has offices in Wayne, Hackensack, Newark, Secaucus, and Clifton, and our bankruptcy attorneys help New Jersey residents work through exactly this kind of calculation every week. If you're trying to figure out where your household lands on these updated numbers, or whether Chapter 7 or Chapter 13 makes more sense for your situation, we can walk through the math with you and explain what it actually means for your case.
Frequently Asked Questions
- Does being above New Jersey's median income automatically disqualify me from Chapter 7?
- No. It moves you into a more detailed calculation involving allowed expenses and secured debt payments. Many filers whose income is above the median still qualify for Chapter 7 once that calculation is complete.
- How is my income calculated for the means test?
- It's based on your average gross monthly income over the six full months before your filing date, not your current pay or your expected future income.
- Do these income figures apply to Chapter 13 as well as Chapter 7?
- Yes. Where your income falls relative to New Jersey's median helps determine whether your Chapter 13 plan runs three years or five, and feeds into how much you're required to pay unsecured creditors.
- How often do these figures change?
- The U.S. Trustee Program updates them periodically using Census Bureau data. New Jersey's numbers have been revised more than once in the past year, so it's worth confirming which figures apply to your actual filing date rather than relying on an older number you found online.
- I'm above the median income for my household size. Does that mean I should file Chapter 13 instead of Chapter 7?
- Not necessarily. It only means more of your expenses and debts need to run through the formula before you'll know whether you pass. Many factors beyond income go into that decision, and it's worth discussing with an attorney before assuming either option is off the table.
- My income is irregular. How do I know which side of the median I'm on?
- You'll generally need to average your actual gross income over the six full months before filing, including any self-employment or commission income, rather than relying on a single typical month. Because the math can be sensitive to timing, it's worth having an attorney or financial professional review the full period before you rely on your own estimate.
