Pennsylvania Bankruptcy Means Test Figures for 2026

Evaluating whether a Chapter 7 bankruptcy is right for you in Pennsylvania begins with a look at your finances over the last half-year. Under the Bankruptcy Means Test, you must calculate your Current Monthly Income (CMI) and compare it against Pennsylvania’s median income for households of a matching size. Coming in below that benchmark typically clears the path for a Chapter 7 filing, but passing the income hurdle does not automatically greenlight Chapter 7.

A comprehensive analysis must also weigh other critical factors, including your disposable income, any missed payments on secured debts like mortgages or auto loans, and equity not protected by Pennsylvania’s property exemptions.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Points About the Pennsylvania Means Test

• Six-Month Income Review: Eligibility for Chapter 7 begins by averaging all household earnings received six months before your petition date and comparing them to Pennsylvania’s median income.
• Strategic Timing Considerations: A surge in income from commissions, overtime, or bonuses can increase your six-month average. However, delaying your filing date until that high-earning month drops out of the look-back window can help you pass the Means Test.
• Presumption of Abuse: Exceeding Pennsylvania’s median income automatically triggers a “presumption of abuse” under 11 U.S.C. §707(b), requiring completing the second stage of the Means Test.
• Considering Chapter 13: Even when a debtor passes the Means Test, Chapter 13 may be strategically superior, especially when curing mortgage arrears, stopping vehicle repossessions, or keeping non-exempt assets and equity.

How the Means Test Works in Pennsylvania

To determine if you qualify for Chapter 7 bankruptcy, the first step is completing Official Form 122A-1, which establishes your Current Monthly Income (CMI) pursuant to 11 U.S.C. §101(10A). This document scales your earnings from the prior six months into an annualized figure, and comparing to the Pennsylvania median for your household size.

For example, $45,000 earned over the six months leading up to your petition translates to a $7,500 monthly CMI, or an annualized total of $90,000. The annualized income is then compared to Pennsylvania’s median income.

Step 1 of the Means Test

When your annualized earnings fall at or below the state median, you clear the initial hurdle and skip the second phase of the Means Test. Even so, successfully navigating Step 1 is merely a preliminary milestone. You still must consider:

• Asset Valuation: Reviewing the fair market value of all assets minus any liens and comparing it to the Pennsylvania property exemptions to determine any non-exempt equity.
• Disposable Income: Analyzing net monthly cash flow by comparing Schedules I (Income) and J (Expenses).

Proceeding to Step 2 of the Means Test

When your income climbs past the state median, the evaluation moves to the detailed calculations of Official Form 122A-2. This secondary stage incorporates IRS National and Local Standards for allowable living expenses, alongside statutory deductions for secured obligations like car notes and home mortgages.

Because these comprehensive deductions significantly reduce your calculated disposable income, many debtors who initially exceed the median income can overcome the presumption of abuse and qualify for Chapter 7.

But remember, whether you pass under Step 1 or Step 2, the Means Test is not the final determinant. Chapter choice must also consider arrears, asset protection, and long‑term financial goals.

Pennsylvania Median Income Figures for 2026

Household Size	Annual Median Income	Monthly Median Income
1 Earner	$72,230	$6,019.16
2 Persons	$87,534	$7,294.50
3 Persons	$110,151	$9,179.25
4 Persons	$135,862	$11,321.83

Add $11,100 for each individual in excess of 4.

Choosing Between Chapter 7 and Chapter 13 When Facing Foreclosure or Repossession

Filing under Chapter 7 does not allow you to catch up on past-due car or mortgage payments. If you are behind on these secured obligations, filing Chapter 7 does not prevent lenders from seizing the property unless you can instantly cure the total balance of missed payments.

A common misconception among unrepresented debtors is that the automatic stay under Chapter 7 serves as an indefinite shield against foreclosure or vehicle repossession. In practice, secured creditors frequently file motions seeking relief from the stay, and bankruptcy courts routinely grant them when it’s clear there’s no way to catch up on the arrears.

By contrast, Chapter 13 allows you to roll your past-due mortgage or car payments into a court-approved repayment plan spanning three to five years. While this approach lets you cure the default over time, keep in mind that you must concurrently maintain your ongoing, current monthly payments to keep the asset.

Reducing Your Car Loan Balance

Under specific conditions, a Chapter 13 plan allows you to lower an inflated vehicle loan balance down to the automobile’s current market value, a strategy known in bankruptcy as a “cramdown.”

Pursuant to Section 506(a), a creditor’s secured claim is legally capped at the actual worth of the car today, with the remaining balance being converted into unsecured debt. However, executing a cramdown requires satisfying two strict statutory prerequisites:

• The 910-Day Rule: Governed by §1325(a), you must have purchased and taken ownership of the vehicle at least 910 days (roughly two and a half years) prior to filing your bankruptcy petition.
• Plan Feasibility: You must demonstrate the financial capacity to pay off the entire secured portion, the vehicle’s fair market value, in full over the life of your Chapter 13 repayment plan.

How the Chapter 13 Cramdown Works

To see how this functions in practice, imagine a debtor who owes $25,000 on an auto loan for a vehicle that currently appraises at $14,000, having purchased the car more than 910 days prior to filing.

Through a Chapter 13 cramdown, the lender’s secured claim is reduced to $14,000. This principal amount is then paid in full through the plan. In addition, the interest rate can also be reduced (Till rate).

Meanwhile, the remaining $11,000 balance is removed and reclassified as an unsecured claim, grouping it with general debts like credit cards and medical debt. Between the reduced car loan balance and interest rate, car owners can save potentially thousands of dollars.

Reducing or Eliminating Second Mortgages and HELOCs Through Chapter 13

While vehicle cramdowns modify secured auto loans, lien stripping targets underwater home equity loans and second mortgages pursuant to Sections 506(a) and 1322(b)(2) of the Bankruptcy Code.

If a residential property’s current fair market value fails to cover even the balance of the first mortgage, any junior liens such as a home equity line of credit or second mortgage can also be converted to an unsecured claim.

Under §1322(b)(2), the bankruptcy court has the authority to strip the mortgage lien and reclassify it as an unsecured debt. Upon successfully discharging the repayment plan, the second mortgage or HELOC is wiped away and removed from the property’s title.

Neither lien stripping nor auto cramdowns are permitted under Chapter 7. It is exclusively a Chapter 13 remedy.

Conclusion: Strategic Timing and Chapter Selection in Pennsylvania

Passing the Pennsylvania Means Test is an essential prerequisite for Chapter 7 relief, but it represents only the first phase of your eligibility analysis. Filers must also weigh asset valuations, state exemptions, disposable income levels, and the status of secured obligations. For individuals facing mortgage defaults or vehicle repossessions, Chapter 13 is frequently the only choice to protect those assets.

Because the Means Test relies strictly on a half-year look-back window, timing your petition is critical. A temporary earnings spike can artificially inflate your average and push your income past the state median. To exclude that month from the Means Test calculations, delaying filing until that month falls outside of the six-month period will help you qualify for Chapter 7.

Educational Resources

• For Institutions: Colleges and universities may request examination copies of my textbook directly from Routledge Publishing.
• For Students & Practitioners: Single print and digital copies are available via Amazon Books.
• Video Lectures: Stream comprehensive legal breakdowns and video explanations on the Bankruptcy.blog YouTube Channel.

Bankruptcy Court & Consumer Resources

Explore additional consumer guides and state-specific directories to navigate your legal options:

• A step-by-step master guide to completing and understanding the bankruptcy petition.
• Bankruptcy Court Directory: Full listings for the federal bankruptcy court system and trustee contact information.
• State Bankruptcy Exemptions: Review your state‑specific exemptions or compare them with the federal exemptions.
• 341 Meeting Procedures: Prepare for your court date with updated rules, expectations, and practical guidance.

Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.

Bankruptcy Code Statutory References

• 11 U.S. Code §707 – Dismissal of a case or conversion to a case under chapter 11 or 13.
• Official Form 122A-1. Chapter 7 Statement of Your Current Monthly Income.
• Official Form 122A-2. Chapter 7 Means Test Calculation.
• 11 U.S. Code §101 – Definitions.
• 11 U.S. Code §341 – Meetings of creditors and equity security holders.
• 11 U.S. Code §506 – Determination of secured status.
• 11 U.S. Code §1325 – Confirmation of plan.
• 11 U.S. Code §1322 – Contents of plan.