Since filing for bankruptcy is a federal court process, filing for bankruptcy in South Dakota is similar to doing so in any other state. The proceeding will take place in the U.S. Bankruptcy Court for the District of South Dakota and follow federal bankruptcy laws.

While bankruptcy is within federal jurisdiction, the court will look to specific income guidelines established for residents of South Dakota. The court will also consider South Dakota state exemptions, i.e. property that cannot be taken from you during a bankruptcy proceeding.


Do I Qualify for Bankruptcy Based on My Income?

To determine if you are eligible to file for Chapter 7 bankruptcy, the bankruptcy court employs what is sometimes referred to as a “Means Test.” In its simplest terms, this analysis checks your income level and how necessary bankruptcy is to your financial situation. As a resident of South Dakota, if your income falls below the state’s median income, you are eligible to file for Chapter 7 bankruptcy.

South Dakota median income guidelines are published by the U.S. Census Bureau and updated yearly to assure they are aligned with current economic conditions. You can find a full list by state on the Justice Department website. The chart below shows the income guidelines for South Dakota only.


Income Guidelines for Bankruptcy in South Dakota

Household SizeAnnual Income
Single Person$54,821
Two People$74,820
Three people$87,475
Four People$96,399


If you have more than four people in your family, add an additional $9,900 for each one to determine the appropriate annual income for your household size.


How to Calculate Your Income to Determine if You Are Eligible for Bankruptcy

Using this form you can determine your income and compare it against the South Dakota income guidelines above. In essence, the form asks you to add together any pre-tax earnings your household received over the six months prior to filing for bankruptcy, determine an average, then multiply to find your yearly household income. This also must encompass income earned by a spouse, even if the spouse is not filing for bankruptcy.

The South Dakota Bankruptcy Court requires that almost all income be included, though there are a few exceptions, such as social security payments, payments to victims of war crimes, veterans benefits, and payments related to a national emergency, like COVID-19. You can browse the full list of income exceptions here.

After calculating your income, considering any exceptions, measure it against the income guidelines for your family size. If your income is less than the listed income, you are eligible for Chapter 7 bankruptcy. If your income is greater, you are not yet eligible, but you may still be able to file based on the second part of this analysis.


You May Still Be Able to File for Bankruptcy if Your Income Is Greater Than the Established South Dakota Median

Even if you earn more than the South Dakota income guidelines allow for in Chapter 7 bankruptcy, you may still be eligible. If you do make more than the income guidelines permit, there is a second part of the analysis which requires you to list deductible expenses. This detailed form includes many common expenses and assists you to calculate your disposable income. Based on your disposable income, you may then still qualify for Chapter 7 or alternatively Chapter 13 bankruptcy.  Thomas Blake is an experienced attorney and has successfully filed many Chapter 7 Bankruptcy cases that were over the median income.

While this article is intended to simplify common questions about the bankruptcy process and the income guidelines for South Dakota, bankruptcy has serious legal and financial consequences. There is no substitute for a conversation with an expert. Please contact us today at Thomas A Blake Law to learn more and let us understand your specific circumstances. We can help you navigate the bankruptcy process and all it entails.