1. United States
2. Calif.
3. Letter

I’m writing to urge you to support legislation that raises the income threshold for Chapter 7 bankruptcy in California. The current median income limits used to determine eligibility (as outlined in 11 U.S.C. § 707(b)) have not kept pace with today’s economic reality—particularly inflation and skyrocketing housing costs. In L.A. County, the average mortgage payment now exceeds $5,900 per month, and rent for modest housing has risen over 40% since 2020. Yet, the California median income threshold for a household of four remains just over $130,000—disqualifying many families with little to no disposable income. This misalignment between real-world expenses and income thresholds undermines the intent of the law. Families slightly above the threshold are often forced into Chapter 13, where unrealistic repayment plans offer no meaningful relief. The law should distinguish between those with actual ability to repay debts and those struggling under structural cost burdens. I urge you to sponsor or support legislation to: 1. Adjust California’s median income thresholds upward by at least 10-15%. 2. Index the income figures to inflation and regional shelter costs. 3. Allow hardship exemptions for households spending more than 40% of income on housing. Updating these limits will help ensure fair access to Chapter 7 relief and reflect the true cost of living in California. Thank you for considering this necessary step to protect working families in our state.