Does My Income Disqualify Me from Chapter 7 Bankruptcy in Melbourne? Florida's 2026 Means Test Explained

Most Melbourne and Brevard County residents who worry their income is too high for Chapter 7 bankruptcy still qualify when we run the actual numbers. The means test under 11 U.S.C. § 707(b) has two steps: if your annualized household income falls at or below the Florida median for your household size, the analysis ends right there and you file. If you exceed the median, a second calculation deducts your actual allowed expenses, and that step alone qualifies the majority of Space Coast families who initially appear over the limit. The Florida median income figures in this post reflect the April 2026 U.S. Trustee update; I flag below where to verify current thresholds before filing.

Melbourne Florida Bankruptcy Attorney | Serving All of Brevard County

Click Here to Calendar a Free Phone Consultation

What changed for 2026: The U.S. Trustee Program updated Florida median income figures effective April 1, 2026, and are the current operative figures as of this post’s publication. Both the median income figures and IRS Local Standards for the Melbourne-Titusville-Palm Bay area have been updated. Figures sourced directly from the U.S. Trustee Program at justice.gov/ust.

What Is the Chapter 7 Means Test?

The means test is an income test to determine if you qualify for Chapter 7 bankruptcy.  It compares your household income to the average household income in the state, with the same number of members in the household. Congress added the means test to the Bankruptcy Code in 2005 through the Bankruptcy Abuse Prevention and Consumer Protection Act, codified at 11 U.S.C. § 707(b). Its purpose is to prevent high-income filers from discharging debts they could realistically repay through a Chapter 13 plan. It is not designed to keep honest, struggling families out of court.

The test compares your Current Monthly Income (CMI) to the Florida median for a household your size. CMI is not your paycheck this month. It is the average monthly income you received from all sources during the six full calendar months before your filing date, annualized for comparison. If that figure falls at or below the Florida median, you pass automatically. If it exceeds the median, you complete Official Form 122A-2 to determine whether your disposable income after allowed deductions is low enough to qualify.

Step 1: Compare Your Income to the 2026 Florida Median

The figures below reflect Florida median income as updated by the U.S. Trustee Program effective April 1, 2026 -- the current figures as of this post’s publication. Verify current figures at justice.gov/ust before filing, as the U.S. Trustee updates these amounts approximately every six months.

For households larger than six, add $11,100 per additional person. Household size includes everyone you support financially, not just those named on the bankruptcy petition.

A KSC contractor with a spouse and two children bringing in $8,500 a month combined falls below the four-person 2026 median of $9,563. That family passes Step 1, the means test is complete, and the Chapter 7 bankruptcy petition proceeds without further income analysis.

Click Here to Calendar a Free Phone Consultation

Step 2: What Happens If You Are Above the 2026 Median?

Exceeding the median does not disqualify you. It means you complete Official Form 122A-2, which subtracts a specific list of allowed monthly expenses from your CMI to determine your monthly disposable income. If that figure falls below the statutory threshold (currently $151.25 per month as of 2026), the case is presumed not abusive and proceeds as a Chapter 7.

Allowed deductions include the 2026 IRS National and Local Standards for food, clothing, housing, utilities, and transportation, plus your actual secured debt payments, certain priority debt payments, health insurance premiums, childcare, and other specified categories. These are not what you actually spend at Publix on Wickham Road. They are IRS-calibrated amounts for the Melbourne-Titusville-Palm Bay metro area, and for many categories they run more generous than filers expect.

Because the deductions are formula-driven, the calculation is counterintuitive. Many Patrick Space Force Base dual-income households that appear well above the median clear Step 2 because their mortgage, car loans, and health insurance premiums consume most of their disposable income under the IRS standards. Running the numbers with an attorney before ruling yourself out is always worth the time.

What Income Counts -- and What Does Not?

CMI is broader than your W-2 wages. It includes:

• All wages, salary, tips, and commissions
• Self-employment net income
• Regular contributions from a spouse or household member, even if they are not filing
• Rental income, alimony, and pension distributions
• Business income from any source averaged over the prior six months

CMI specifically excludes the following under 11 U.S.C. § 101(10A):

• Social Security benefits -- Retirement, SSDI, and SSI are all excluded
• Payments to victims of war crimes or crimes against humanity
• Payments to victims of international or domestic terrorism

The Social Security exclusion matters for a significant share of Brevard County filers. A retired Melbourne resident living primarily on Social Security and a modest part-time income may have a very low CMI regardless of how their gross income looks on paper. If Social Security is your primary source of funds, you almost certainly pass the means test outright.

Click Here to Calendar a Free Phone Consultation

Common Reasons Brevard Residents Qualify Even When They Exceed the Median

After 17 years handling bankruptcy cases on the Space Coast, these fact patterns consistently produce a qualifying Chapter 7 filing even when the client initially appears over the median:

• High housing costs: An underwater mortgage on a Melbourne home or market-rate rent in Viera means the 2026 IRS housing deduction often drives disposable income well below the threshold.
• Vehicle loan payments: Two financed vehicles for a household near Rockledge or Merritt Island can consume a large portion of the transportation allowance combined with the actual payment deduction.
• Health insurance premiums: Employer-sponsored premiums deducted from your paycheck before you see the money are deductible in full on Form 122A-2.
• Domestic support obligations: Child support or alimony you pay to a non-filing spouse or ex-spouse is a permitted deduction that can dramatically reduce your disposable income figure.
• Recent income drop: A job loss, pay cut, or reduced hours in recent months means your six-month CMI average may already be falling toward the median even if recent paystubs look higher. Shifting the filing date by one or two months sometimes resolves the issue entirely.

Frequently Asked Questions: Chapter 7 Means Test in Brevard County (2026)

What if I pass the means test -- can the trustee still challenge my Chapter 7?

Passing the means test creates a presumption your case is not abusive, but it is not an absolute shield. The U.S. Trustee for the Orlando Division of the Middle District of Florida can still move to dismiss under 11 U.S.C. § 707(b)(3) based on the totality of circumstances. In practice this is rare in straightforward consumer cases. The trustee at your 341 meeting is primarily verifying that your schedules are accurate, not looking for grounds to challenge a presumptively non-abusive filing.

Does my spouse's income count if only I am filing?

Generally yes. CMI under 11 U.S.C. § 101(10A) includes regular contributions to household expenses from a non-filing spouse. Form 122A-1 includes a marital adjustment that lets you back out portions of your spouse's income not regularly contributed to household expenses -- such as their own separate debt payments. The adjustment calculation requires precision; an error there draws trustee questions that are easy to avoid with careful preparation.

Click Here to Calendar a Free Phone Consultation

How is CMI calculated for self-employed filers?

If you operate a business in Cocoa Beach, run a contracting company near Patrick Space Force Base, or own rentals in Palm Bay, your CMI uses gross business receipts for the six-month lookback period minus ordinary and necessary business expenses for that same period. You are not pulling net profit from a tax return. The distinction matters because actual receipts and actual expenses can differ meaningfully from a Schedule C or corporate return, and using the wrong figure is one of the more common errors in self-employed filings.

What if my income dropped significantly just before filing?

A recent job loss, medical leave, or business downturn can leave your six-month CMI average higher than your current ability to pay. Sometimes waiting one or two months shifts enough of the lookback window to lower CMI below the Florida median. In other situations the better answer is to file now and document the income drop for the trustee. An attorney familiar with how Orlando Division trustees handle income trajectory issues can advise which approach fits your numbers.

If I fail the means test, is Chapter 13 my only option?

Not necessarily. A few strategic paths remain when Form 122A-2 produces a high disposable income figure. Some clients convert to Chapter 13, which has its own advantages for saving a home in foreclosure or restructuring secured debt. Others find that a missed deduction or overstated CMI figure -- both more common than people assume -- can be corrected before the petition is filed. Voluntary dismissal and refiling at a better time is also possible in limited circumstances. The means test form alone does not define your options.

Where is the bankruptcy court that handles Brevard County cases?

Brevard County bankruptcy cases are filed in the United States Bankruptcy Court for the Middle District of Florida, Orlando Division, at 400 West Washington Street in Orlando. The 341 meeting of creditors is typically held at the same courthouse approximately 30 days after filing. My office handles filings and appearances there regularly for clients throughout Brevard County, from Titusville in the north to Melbourne and Palm Bay in the south.

Speak With a Melbourne Bankruptcy Attorney Before You Rule Yourself Out

The means test stops a lot of Brevard County residents from picking up the phone because they assume their income is too high. Most of the time that assumption is wrong. I have helped clients near Holmes Regional Medical Center, in Viera, in Palm Bay, and throughout the Space Coast clear the 2026 means test -- at Step 1 or after the full deduction calculation -- when they were certain they would not qualify.

If you are carrying debt that feels unmanageable, the right first step is to run the actual numbers with an attorney who knows the Orlando Division and the Space Coast. Contact our Bowin Law Group to schedule a consultation with our Melbourne Bankruptcy Attorney. There is no cost to find out where you stand.

Click Here to Calendar a Free Phone Consultation