It’s 2026, and let’s be honest, living in San Diego County isn’t exactly a bargain. Between the breathtaking views of the Pacific and the world-class dining, there’s a price tag that would make a Silicon Valley tech mogul do a double-take. You might be earning a "high" salary on paper, but after you pay for your mortgage, car, and maybe a few overpriced lattes, you’re wondering where all that money went.
Many people believe that if they earn more than the average person, filing for Chapter 7 bankruptcy is off the table. They assume they’ll be forced into a five-year repayment plan under Chapter 13. But here’s the reality: in San Diego County, "high income" is a relative term.
Because the cost of living here is so high, the legal system provides several "loopholes", legitimate legal deductions, that can help you qualify for a fresh start. As a bankruptcy attorney with the added perspective of a real estate broker, I’ve seen how the right math can change everything. Do You Automatically Pass the Median Income Test?
The first hurdle in any bankruptcy case is the "Means Test." This starts with a look at the median income for California. As of April 2026, these figures have adjusted to reflect our current economy.
- For a single person: The median income is approximately $77,000.
- For a family of four: The median income is approximately $135,000.
If your gross household income is below these marks, you likely pass the first part of the test automatically. But what if you’re a family of four earning $170,000? In many parts of the country, that’s wealthy. In San Diego County, that’s just keeping your head above water.
Don't panic. If you are over the median, we move to the second part of the Means Test: the expense deductions. This is where we look at your actual living costs to see if you have enough "disposable income" to pay back your creditors. Often, the answer is a resounding "no."
Your High San Diego Mortgage or Rent
This is the big one. San Diego County housing costs are astronomical. When we calculate the Means Test, we don't just use a flat national average; we look at your actual secured debt payments. If you have a hefty mortgage on your primary residence, that entire payment is usually a deduction. This single factor often helps high earners qualify for Chapter 7 because it wipes out a massive chunk of "disposable" income on paper.
Real Estate Taxes and Homeowners Insurance
As a dual broker-attorney, I understand that a home isn't just a mortgage payment. It’s the property taxes, the Mello-Roos, and the skyrocketing insurance premiums we’ve seen recently in California. These are necessary expenses that must be factored into your bankruptcy math.
Mandatory Payroll Deductions
Are you paying into a mandatory retirement system? Do you have union dues or required life insurance through your employer? These aren't optional luxuries; they are requirements of your employment. We can often deduct these from your gross income, bringing that "high" salary down to a level that qualifies for Chapter 7.
Significant Healthcare Expenses
If you or a family member has a chronic condition, or if you simply pay high premiums for a top-tier health plan to cover your family in San Diego County, these costs are vital. Out-of-pocket medical expenses, dental work, and even regular therapy sessions are often deductible expenses that reflect your true financial situation.
Childcare and Education Costs
San Diego parents know that daycare can cost as much as a second mortgage. If you are paying for childcare so that you can go to work and earn that "high income," those costs are deductible. Additionally, certain educational expenses for physically or mentally challenged children can be included.
High Transportation Costs
Do you have a long commute from North County to Downtown? Are you paying off two car loans so your spouse can get to work too? Between car payments, insurance, and the local cost of fuel, transportation is a major expense. The Means Test allows for local standards for operating costs and actual payments for ownership, which can be a significant help for San Diego County residents.
Tax Debt Obligations
If you owe money to the IRS or the Franchise Tax Board, payments toward those debts are often deductible. The law recognizes that the government wants their money first. By accounting for these payments, we can often show the court that you don't actually have "extra" money to pay credit card companies or personal loans.
Charitable Contributions
Are you a regular tither at your church or a consistent donor to a local San Diego non-profit? The law allows you to deduct up to 15% of your gross income for charitable contributions. If giving is a core part of your life, you aren't necessarily required to stop just because you are seeking debt relief.
Caring for Elderly or Disabled Family Members
In many households, the "higher income" is actually supporting more than just the immediate family. If you are providing care for an elderly parent or a disabled family member, those actual out-of-pocket costs can be used to offset your income on the Means Test. 10. The "Special Circumstances" Clause
Sometimes, life just doesn't fit into a box. If you have a unique situation: perhaps a recent job loss, a sudden drop in commissions, or an upcoming major expense: we can argue "special circumstances." This is a catch-all that allows a bankruptcy attorney to explain to the court why the standard math doesn't apply to your life.
Notes for Business Owners: If more than 50% of your total debt is "non-consumer" (meaning it was incurred for a business or profit-making motive), you might be exempt from the Means Test entirely. This is a huge advantage for San Diego County entrepreneurs who saw a business venture struggle. If your debt is primarily business-related, your high personal income may not prevent you from filing for Chapter 7 at all. Check out our business-related legal articlesfor more on this.
Why Our Dual Expertise Changes the Game
At the Law Office of Andrew H. Griffin, III, APC, we aren't just looking at spreadsheets. Because I am both a licensed attorney and a real estate broker, I look at your financial picture through a different lens. I understand how property valuations, mortgage structures, and the San Diego real estate market impact your bankruptcy eligibility.
We don't just see a "high income"; we see a complex life with complex expenses. We know how to dig into the details of your real estate holdingsand your daily costs to build the strongest possible case for your Chapter 7 filing.
Take Control of Your Financial Future Today
Don't let the fear of "earning too much" stop you from seeking the relief you deserve. The law was designed to help people who are overwhelmed by debt, and that includes high earners in high-cost areas like San Diego County.
Whether you are dealing with credit card debt, medical bills, or the threat of foreclosure, we are here to help. We offer bilingual services (English and Spanish) and pride ourselves on being accessible when you need us most.
Ready to see if you qualify?
- Call us: 619-853-3009
- Text us: We are available 24/7 via text for your convenience.
- Contact us online: Click here to schedule your consultation.
You can also learn more about our firm by visiting our firm overviewor watching our welcome video.
Let’s work together to get you the fresh start you need