German YusufovJune 17, 2026

Debt stress hits hard. Calls and letters pile up, wages feel stretched thin, and the fear of losing a home can keep anyone awake at night. You are not alone in this, and real relief is available under the law.

At Yusufov Law Firm PLLC, we help individuals and business owners in Mesa, Phoenix, and Tucson seek a fresh start through bankruptcy and other debt solutions.

This article explains the Arizona Chapter 7 means test in plain terms, including current income limits, what counts as income, and the most common exceptions that can help you qualify.

Overview of the Arizona Chapter 7 Means Test

The means test is the gateway that many filers go through before using Chapter 7. It checks income and certain living costs to see if a full discharge in Chapter 7 makes sense for your situation.

The Purpose of the Means Test

The Bankruptcy Abuse Prevention and Consumer Protection Act set the means test to keep Chapter 7 focused on people who cannot repay a meaningful portion of their debts. The test compares your household income to Arizona’s median numbers, then reviews allowed expenses if needed.

Courts look at whether granting a Chapter 7 discharge would be an abuse of the system. If your income is low or your allowed expenses leave little left over, Chapter 7 usually fits.

Next, let us look at how the court measures your income for this test.

The Six-Month Lookback Period

The court starts with your average gross monthly income from the last six full calendar months before filing. That period ends on the last day of the month before your case is filed in court.

Add up all the gross income you received in those six months, then divide by six. The result is your current monthly income for the means test, which is then annualized to compare with the state median.

Arizona Chapter 7 Income Limits and Household Calculations

Once you have your average monthly figure, the next step is comparing it to Arizona’s median income for your household size. The law updates these amounts twice a year, so current figures matter.

What Counts as Income

The means test counts a wide range of cash flow. Here are common items included in the calculation:

  • Wages, salaries, overtime, commissions, and tips
  • Bonuses and self-employment income after business expenses
  • Rental income and royalties
  • Alimony and child support received
  • Unemployment compensation
  • Retirement income other than Social Security

Some income is excluded. Social Security retirement benefits and certain disability payments are not part of the current monthly income for means test purposes.

With the right numbers in hand, you can compare your annualized income to the state median.

Comparing Income to the State Median

Your annual figure is compared to Arizona’s median income for your household size. If your number falls below the median, you pass the means test and can file Chapter 7.  These numbers are current as of June 2026.

 

Household Size Annual Median Income
1 $73,935
2 $89,027
3 $104,965
4 $121,174
Each additional person above 4 $11,100

 

Households larger than four add $11,100 for each extra person. Numbers change over time, so check current data before filing or ask our team to verify the latest figures.

Statutory Exceptions to the Means Test

Some filers do not need to take the means test at all. Two common exceptions help business-focused debtors and certain veterans or service members.

Non-Consumer and Business Debts

If more than half of your debts are non-consumer or business-related, the means test does not apply. This often includes business loans, personal guarantees for a company, tax debts, or obligations on investment property.

The court looks at the nature of your debts, not labels used by creditors. A quick review with us can sort this out before you file.

Qualifying Military Service and Veterans

Congress passed the HAVEN Act, which excludes many VA and DoD disability benefits from the income side of the means test. Disabled veterans and service members who served on active duty or in a homeland defense activity can also receive an exemption if debts were incurred during that service period.

To claim this relief, filers submit Official Form 122A-1Supp with the bankruptcy petition. Proper paperwork matters here, and we help clients prepare it correctly.

Proceeding to Part Two: What If Your Income Exceeds the Median?

Many Arizonans still qualify for Chapter 7 even if their income is above the median. The next step uses allowed deductions to show what is left after necessary living costs.

Calculating Allowable Deductions

Debtors above the median complete Official Form 122A-2 to claim allowed monthly expenses. Common deductions include the items below, and each one must be supported by records or by standard amounts set under federal guidelines:

  • Income taxes, Social Security, Medicare, and mandatory payroll deductions
  • Court-ordered alimony or child support you pay
  • Childcare and dependent care
  • Health insurance premiums and out-of-pocket medical costs within set limits
  • Secured debt payments on a home or vehicle, subject to the formula

Each category is applied under strict rules. Good documentation helps your numbers hold up if the trustee has questions.

Next come the standards that set many of the dollar amounts for these deductions.

National and Local Expense Standards

The IRS and U.S. Trustee Program publish National Standards for basic needs like food, clothing, and personal care. These act like preset expense caps for the means test.

Local Standards apply to housing, utilities, and transportation in your Arizona county. Costs in Pima County are not the same as in Maricopa County, so the local tables matter.

Once standards and actual allowed expenses are set, the form totals your deductions.

Determining Disposable Income

Disposable income is the amount left after subtracting all allowed expenses from current monthly income. This amount is then projected over 60 months and compared to the law’s thresholds.

If the projected total is below the line, a Chapter 7 case can proceed. If it is above, Chapter 13 or another path can still bring real relief.

Alternatives for Debt Relief

Not everyone needs Chapter 7. Some clients reach better results with a controlled repayment under court supervision or a creditor workout.

Chapter 13 Bankruptcy

Chapter 13 uses a 3- to 5-year plan to catch up to restructure some debt and wipe out other debt. Many clients who do not pass the means test still pick Chapter 13 for the protections it offers.

Common advantages include:

  • Stopping foreclosure and catching up on mortgage arrears over time
  • Protecting non-exempt assets that could be at risk in Chapter 7
  • Restructuring car loans and other secured debts within the plan
  • Consolidating payments into one budgeted amount each month

Chapter 13 can also deal with tax debts and liens within the court process. Many families keep homes and vehicles this way.

Debt Settlement and Management

Another option is to work out direct deals with creditors for reduced balances.

This route can help if lawsuits are not yet filed and your income supports lump sum payments or payments over a short period of time. Results vary by creditor, and timing matters with accounts already in collections.

Contact Yusufov Law Firm PLLC for Debt Relief Assistance

Every situation has its own mix of income, expenses, and goals. A short call can show which path fits and how fast we can stop the pressure.

Our team at Yusufov Law Firm PLLC helps clients stop collector harassment, prevent foreclosure, and rebuild with a plan that fits real life. We welcome your questions, and we offer a careful review of your facts plus a step-by-step game plan.

Feel free to call our Tucson office at 520-745-4429 or our Mesa and Phoenix offices at 480-788-0098, or visit our contact page to get started today.