To qualify for bankruptcy, you need to complete a pre-filing credit counseling session, clear any waiting period left over from a prior discharge, and meet the eligibility test for the chapter you want to file: an income-based means test for Chapter 7, or a regular-income requirement and debt ceilings for Chapter 13. Everything else in a bankruptcy case flows from those three gates. Miss one and the court will dismiss your case or deny your discharge, even if the rest of your paperwork is perfect.
Credit Counseling Comes First
Before you can file a petition, you must finish a credit counseling session with a nonprofit agency approved by the U.S. Trustee Program.1Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor The session runs by phone, online, or in person and covers your income, expenses, overall debt, and the alternatives to bankruptcy.
Timing matters. The session has to happen within 180 days before the date you file. File after the certificate expires and the court will dismiss the case; skip the session entirely and the same thing happens. Most agencies charge $10 to $50, and fee waivers are available if your household income is below 150 percent of the federal poverty guidelines. The agency issues a certificate of completion, and that certificate gets filed with your petition as proof.
Waiting Periods From a Prior Bankruptcy
If you’ve been through bankruptcy before, the calendar can disqualify you outright. After a Chapter 7 discharge, you can’t receive another Chapter 7 discharge in a case filed within eight years of the earlier filing date.2Office of the Law Revision Counsel. 11 US Code 727 – Discharge After a Chapter 13 discharge, you generally can’t get a Chapter 7 discharge in a case filed within six years, unless you paid unsecured creditors in full, or paid at least 70 percent under a plan proposed in good faith.
Filing inside the waiting period doesn’t just push your case back. It causes the discharge itself to be denied, so you walk away having spent the filing fees and attorney costs without the debt relief you filed for. If you’re close to the cutoff, wait.
The Chapter 7 Means Test
Chapter 7 wipes out most unsecured debt without a repayment plan, and the means test is how the court decides you actually can’t afford to pay creditors back. It runs in two steps, and failing it usually redirects you to Chapter 13 rather than shutting you out of bankruptcy altogether.
Step One: Compare Your Income to the State Median
Take your average monthly income across the six months before filing (excluding the filing month), annualize it, and compare it to the median income for a household of your size in your state. Under the median, you pass automatically. The U.S. Trustee Program updates the figures periodically; state medians for a single earner currently run from roughly $53,000 to $86,000, with larger households getting higher thresholds.3U.S. Department of Justice. Median Family Income Table for Cases Filed on or After November 1, 2025
Step Two: Subtract Allowed Expenses
If your income is above the median, you move to Official Form 122A-2 and subtract IRS-approved expense allowances. The IRS national standards cover food, clothing, personal care, and miscellaneous expenses by household size; a single-person household gets roughly $839 per month in standardized deductions, and a four-person household gets about $2,129.4Internal Revenue Service. Collection Financial Standards You can also deduct actual costs for health insurance, childcare, taxes, and secured debt payments.
What’s left is your monthly disposable income. Multiply it by 60. If the total is $10,275 or less, there’s no presumption of abuse and you can file Chapter 7. At $17,150 or more, the presumption kicks in and Chapter 7 is generally blocked. Between those figures, the presumption applies only if your disposable income equals or exceeds 25 percent of your nonpriority unsecured debt.
If you’re married and filing alone, your non-filing spouse’s income still gets pulled into the calculation. You can claim a marital adjustment deduction for the portion of their income that pays their own separate expenses (their car payment, their student loans, their retirement contributions). Only the share that supports your household counts against you.
When the Means Test Says No
Failing the means test doesn’t automatically end the Chapter 7 conversation. You can argue “special circumstances” for expenses the standard deductions don’t capture, such as a serious medical condition or an involuntary job loss. The burden sits on you to document them, and trustees look hard at these claims. Vague assertions without medical records or layoff letters rarely succeed.
Chapter 13 Eligibility
Chapter 13 doesn’t liquidate assets. You keep your property and repay creditors through a court-supervised plan funded by your income. The qualification rules reflect that structure.
You Need Regular Income
Chapter 13 requires a steady income source strong enough to sustain monthly plan payments. It doesn’t have to be a paycheck. Social Security, pensions, rental income, and self-employment earnings all count. The question the court asks is whether the income can realistically carry the plan through to the end.5United States Courts. Chapter 13 – Bankruptcy Basics
Your Debts Have to Fit Under the Caps
Chapter 13 has debt ceilings. Between June 2022 and June 2024, a temporary combined ceiling of $2,750,000 applied. That provision expired, and the limits reverted to a two-part test: your noncontingent, liquidated unsecured debts and your noncontingent, liquidated secured debts each have to fall below separate federal thresholds.1Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor The dollar limits adjust every three years for inflation, so check the current figures from the U.S. Trustee Program before filing. If your debts exceed the caps, Chapter 11 has no debt ceiling for individuals, though it’s more expensive and complex.
Chapter 13 is also restricted to individuals and sole proprietors. Corporations and partnerships can’t use it.
How Long the Plan Runs
Plan length is fixed by your income relative to the state median. Below-median filers commit to a three-year plan. Above-median filers commit to five years, which is the maximum.6Office of the Law Revision Counsel. 11 US Code 1325 – Confirmation of Plan Your monthly payment is set by your disposable income, calculated on Form 122C-2, which works much like the Chapter 7 means test.
Debts That Survive Either Chapter
Qualifying to file isn’t the same as qualifying for relief on the debt you actually owe. Federal law keeps several categories out of any discharge, and if the bulk of what you owe sits in these categories, filing may not deliver what you want. The main survivors are:7Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
- Child support and alimony.
- Most federal and private student loans, unless you can prove “undue hardship.” The Department of Education’s 2022 guidance has made the process somewhat more accessible, but the standard remains hard to meet.
- Recent income tax debt. Income taxes generally must be at least three years old, with timely filed returns, to qualify for discharge. Payroll taxes withheld from employees are never dischargeable.8Internal Revenue Service. Bankruptcy Frequently Asked Questions
- Debts obtained through fraud, false financial statements, or embezzlement.
- Debts for death or personal injury caused by driving under the influence.
- Criminal restitution.
- Debts you don’t list in your schedules, unless the creditor had actual notice of your case in time to file a claim.
Sorting your debts against this list before filing is the single most important piece of pre-filing analysis. Passing the means test doesn’t help if the debt you were trying to erase was never dischargeable.
Choosing Between Chapter 7 and Chapter 13
The qualification tests point you toward one chapter or the other more often than they leave a real choice.
Chapter 7 fits when your income is below the state median (or clears the second step of the means test) and most of your debt is unsecured and dischargeable. It’s faster and cheaper, and it doesn’t require years of payments.
Chapter 13 fits when the means test blocks Chapter 7, when your debts are within the Chapter 13 caps, and when you have a steady income you can commit to a plan. It’s also the right tool when you’re behind on a mortgage or car loan and want to catch up over time without losing the property, because Chapter 7’s liquidation model doesn’t offer that same cure. If your debts exceed the Chapter 13 caps, Chapter 11 is the remaining option for individuals.
Property exemptions influence the choice as well. Every state sets its own exemption amounts for home equity, vehicle equity, household goods, retirement accounts, and tools of your trade, and some states let you pick between state exemptions and the federal bankruptcy set. Homestead exemptions vary from nothing in a few states to unlimited protection (with acreage restrictions) in others, and federal law caps the homestead exemption for property acquired within roughly three and a half years before filing. Retirement accounts in qualified plans such as 401(k)s and IRAs generally receive strong protection regardless of state. In Chapter 7, non-exempt property can be sold by the trustee, so knowing what your state protects before filing is critical. In Chapter 13, exemptions still shape how much you have to repay unsecured creditors through the plan.
Once you’ve cleared counseling, cleared any waiting period, and identified the chapter your income and debts qualify you for, you’re ready to move from eligibility into the filing itself.