In Utah, there is no single “income limit” for Chapter 7 bankruptcy, but a “means test” compares your household income to the state’s median income for your family size. As of May 2025, the Utah median income for a three-person household is $109,600. If your income is below this median, you likely pass the first part of the means test. If your income is above the median, you must take a second step that subtracts allowable expenses to determine if you have enough “disposable income” to repay debts.
To determine your eligibility
- Calculate your 6-month gross income:Include all sources of income for your household (wages, investments, child support, etc.), but exclude Social Security and VA disability income.
- Annualize your income:Multiply your 6-month total by two to get your annual income.
- Compare to the Utah median income:The median income varies by household size and is updated periodically.
- For a family of 3: The median income is $109,600 for cases filed between May 15, 2025, and October 31, 2025.
- If your income is above the median:You will need to complete the second part of the means test. This involves subtracting allowed expenses, such as taxes, insurance, and secured debt payments, from your income.
- If your disposable income is low:You may still be able to file for Chapter 7, even if your gross income is over the median.
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What Is the Utah Means Test?
The Utah means test is a two-part calculation used to determine whether a person qualifies to file for Chapter 7 bankruptcy. It compares your household income to Utah’s median for your family size, then evaluates your expenses and disposable income. The means test has two parts: the first compares average monthly income to state median income, and the second evaluates disposable income after expenses are deducted. This process ensures that only those who truly cannot afford to repay debts are eligible for a full Chapter 7 discharge.
If your income is below the state median, you automatically pass. If it’s above, you’ll need to complete the expense-based portion to prove eligibility.
Utah Median Income Limits by Household Size (2025)
The U.S. Trustee Program updates Utah’s median income figures twice a year. For cases filed between May 15 and October 31, 2025, the numbers are approximately:
| Household Size | Annual Median Income |
|---|---|
| 1 Person | $74,700 |
| 2 People | $94,400 |
| 3 People | $109,600 |
| 4 People | $122,800 |
| 5+ People | Add $9,900 per additional household member |
Note: Figures change periodically. Always confirm with the U.S. Trustee or your attorney before filing.
What If Your Income Is Above the Median?
If your income exceeds Utah’s median, you must complete the second portion of the means test. This section deducts allowable monthly expenses — such as housing, healthcare, taxes, and secured debt payments — from your income. Allowable expenses for calculating disposable income in Utah include standardized allowances for food, clothing, housing, and transportation. The goal is to calculate your disposable income.
If that disposable amount is very low or negative, you may still qualify for Chapter 7. Otherwise, you might be guided toward Chapter 13, which involves a repayment plan over several years.
Common Expenses Allowed in the Means Test
The IRS and U.S. Trustee guidelines allow specific deductions from your gross income:
- Federal, state, and local taxes
- Health insurance premiums
- Secured debt payments (mortgage, car loan)
- Childcare or dependent care costs
- Charitable contributions (limited)
- Necessary medical expenses
These deductions reflect your real cost of living and can significantly impact eligibility under the second part of the means test.
Chapter 7 vs. Chapter 13 in Utah
If you do not pass the means test, you may still seek debt relief through Chapter 13 bankruptcy, which reorganizes your debts into a 3- to 5-year repayment plan. Chapter 7 bankruptcy eligibility requires completion of a credit counseling course from an approved agency within 180 days before filing.
| Feature | Chapter 7 | Chapter 13 |
|---|---|---|
| Duration | 4–6 months | 3–5 years |
| Debt Discharge | Most unsecured debts | After repayment plan |
| Income Requirement | Must pass means test | No means test limit |
| Property Protection | Limited exemptions | Retain property if plan approved |
Tip: An attorney can help you decide whether Chapter 7 or Chapter 13 provides greater long-term relief.
How to Prepare for the Utah Means Test
To make the process smoother:
- Gather six months of income records. Include pay stubs, self-employment records, and benefits (excluding Social Security).
- Collect expense documentation. Receipts for rent, insurance, medical costs, etc.
- Consult an attorney or credit counselor. They can run the official means test using updated state data and IRS expense standards. You must provide documentation of all sources of income, including pay stubs and any other regular payments you receive, for the means test.
Proper preparation ensures your filing is accurate and prevents delays or denials.
Why Legal Guidance Matters
While the Utah means test may look straightforward, small mistakes can affect eligibility or delay your case. A bankruptcy attorney can:
- Ensure all income and expense documentation is accurate.
- Identify overlooked deductions that may help you qualify.
- Determine if Chapter 13 is a better option for your goals.
Legal insight ensures you file confidently and maximize debt relief under the law.
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FAQs (People Also Ask-Optimized)
Does Social Security or VA disability count toward the Utah means test?
No. Social Security benefits and VA disability payments are excluded from the current monthly income used in the Chapter 7 means test, though other household income sources do count. Verify any edge cases with counsel.
How do I calculate the “six-month lookback” correctly?
Add all countable income received in the six full months before filing (not the filing month), then multiply by two to annualize. If you file on October 30, you’d total income from April 1–September 30.
What if my income recently dropped — can waiting help?
Yes. Because the test averages the last six full months, waiting until lower-income months replace higher ones can change your result and help you pass.
Which expenses usually make the biggest difference in Part 2?
Housing/utilities, health insurance and necessary medical costs, taxes/withholdings, and secured debt payments (like a mortgage or car) often have the largest impact on disposable income.
How often do Utah’s median income figures change for bankruptcy?
They’re typically updated twice a year (spring and fall). Use the U.S. Trustee Program’s current table for your actual filing date, as numbers can change between your research and filing.
If I fail the means test, can I still get bankruptcy relief?
Usually yes — Chapter 13 allows a structured repayment plan over 3–5 years, often while protecting assets you want to keep. An attorney can model both chapters based on your documents.
Disclaimer: This information is for educational purposes only and is not a substitute for legal advice. It is advisable to speak with a qualified attorney to review your individual circumstances.
