Legal Definitions - Median Family Income

Definition: Median Family Income refers to the figures published by the U.S. Census Bureau each year. It is the income level that separates the top 50% of households from the bottom 50% of households in terms of income. The most recent median family income published by the Census Bureau was in September of 2019, which was the household income of 2018 in the United States. The 2018 median family income was $61,937.

For example, if there are 100 households in a community and their incomes are arranged from lowest to highest, the median family income would be the income of the 50th household. This means that half of the households earn more than the median family income and half earn less.

The median family income is an important figure in bankruptcy law. In the Chapter 7 bankruptcymeans test, the debtor passes the means test if the debtor’s monthly income yields a figure lower than the median family income, otherwise the debtor would have to pass the step 2 of the means test in order to file for chapter 7 bankruptcy.