What Qualifies You for Bankruptcy? Chapter 7 & 13

What qualifies you for bankruptcy depends on the chapter you file under, but two things are always required: you must complete a pre-filing credit counseling session from an approved nonprofit, and you must meet the income or debt tests specific to that chapter. Chapter 7 turns on whether your income is low enough to pass the means test. Chapter 13 requires regular income and total debts under set dollar caps. If you have filed before, waiting periods may also block a new discharge.

Credit Counseling Comes First

Before you can file any bankruptcy petition, federal law requires you to complete a credit counseling briefing within the 180 days before your filing date. The provider must be a nonprofit agency approved by the U.S. Department of Justice.¹ The session reviews your finances, discusses alternatives to bankruptcy, and helps you sketch a basic budget. It can be taken online, by phone, or in person, and it usually lasts at least 60 minutes.²

Approved providers are listed on the U.S. Trustee Program website. Most charge $50 or less, and they must waive the fee entirely if you cannot afford it.² You will receive a certificate to attach to your petition. Skip this step, and the court can dismiss your case.

A second course, debtor education, is required after you file but before your debts can be discharged. It comes from a separately approved provider and focuses on budgeting and using credit responsibly.³ Skipping it means no discharge, even if the rest of your case goes smoothly.

Qualifying for Chapter 7

Chapter 7 can wipe out most unsecured debt — credit cards, medical bills, personal loans — without a repayment plan. Qualification runs through a two-step income screen called the means test.

Step One: Your Income Against the State Median

The first step averages your gross income over the six full calendar months before filing and compares it to the median income for a household of your size in your state. If your income is at or below the median, you pass automatically and can file Chapter 7 without going further.⁴

One boundary matters here. The means test applies only when your debts are primarily consumer debts. If most of what you owe comes from a business, the test does not apply, and you can file Chapter 7 regardless of income.

Step Two: Disposable Income

If your income exceeds the state median, the second step asks whether you have enough left over each month to repay a meaningful portion of what you owe. The calculation subtracts IRS-standardized living expenses for your area — housing, food, transportation, and other necessities — from your income, then multiplies the monthly result by 60.

The five-year total decides the outcome. Under $10,275, no presumption of abuse exists and you can still file Chapter 7. At $17,150 or more, the court presumes the filing is abusive and will likely dismiss the case or push you into a different chapter.⁵ Between those two figures, the presumption kicks in only if the total is at least 25 percent of your unsecured debts.⁴

Even when the numbers create a presumption of abuse, you can rebut it by showing special circumstances that justify higher expenses or lower income than the formula reflects. A serious medical condition or a call to active military duty are examples the statute contemplates.⁶

Qualifying for Chapter 13

If you earn too much for Chapter 7, or you want to keep property that a Chapter 7 trustee might sell, Chapter 13 lets you repay some or all of your debts over three to five years under a court-approved plan. Two things qualify you: a regular source of income, and total debts under the statutory caps.

Regular income can come from wages, self-employment, a pension, or Social Security. What matters is that it is steady enough to fund the plan’s monthly payments.

As of April 2025, your total unsecured debts must be below $526,700, and your total secured debts must be below $1,580,125.⁵ Only debts for a fixed, known amount count toward these limits; disputed or uncertain amounts are excluded. If you exceed either cap, Chapter 13 is not available, and Chapter 11 reorganization is typically the alternative.

Plan length depends on your income. Below the state median for your household size, the plan runs three years. Above the median, it generally runs five, which is also the maximum allowed.⁷ Your monthly payment is based on disposable income, meaning what remains after reasonable living expenses.

If You’ve Filed Before: Waiting Periods

Federal law limits how often you can receive a bankruptcy discharge. The waiting period depends on both the type of case you filed previously and the type you want to file now. All periods run from the filing date of the earlier case, not the discharge date.

Chapter 7 after a prior Chapter 7: eight years.⁸
Chapter 7 after a prior Chapter 13: six years, unless you repaid 100 percent of unsecured claims or at least 70 percent under a good-faith best-effort plan.⁸
Chapter 13 after a prior Chapter 7: four years.⁹
Chapter 13 after a prior Chapter 13: two years.⁹

You can still file a new petition before the waiting period ends. You just will not be eligible for a discharge in the new case, which strips out most of what makes bankruptcy worth filing.

Qualifying to File Isn’t the Same as Wiping Out Every Debt

Even a successful bankruptcy leaves some debts intact. Knowing which ones survive helps you decide whether qualifying is worth the effort in your situation. The categories that come through discharge unchanged include:

Domestic support obligations, including child support and alimony, under any chapter.¹⁰
Most federal and private student loans, unless you file a separate lawsuit and prove undue hardship on you and your dependents. A 2022 Department of Justice policy change created a more structured framework for evaluating those claims, but the hardship requirement remains.¹⁰
Recent income taxes. Older tax debts may qualify if the return was due more than three years ago and was filed on time, among other conditions.¹¹
Debts from fraud, false statements, or misrepresentation. Luxury purchases over $500 made within 90 days of filing and cash advances over $750 taken within 70 days of filing are presumed fraudulent.¹⁰
Debts from willful injury to another person or their property.
Criminal fines, restitution, and most government-imposed penalties.
Debts from death or personal injury you caused while driving under the influence.¹⁰

A debt you leave off your petition may also survive if the creditor did not learn about your case in time to file a claim. Listing every creditor completely is not optional.

Documents You’ll Need to Prove Eligibility

The petition itself requires detailed records. Incomplete or inaccurate filings can delay your case, draw extra scrutiny from the trustee, or lead to dismissal. Before you begin, pull together:

A creditor list with names, mailing addresses, account numbers, and current balances for everyone you owe, including debts you plan to keep paying such as a mortgage or car loan.¹²
A property inventory covering everything you own or have a legal interest in — real estate, vehicles, bank accounts, retirement funds, household goods, jewelry — with an estimated current value for each item.¹²
All pay stubs from your employer within 60 days before filing.¹²
Income records from all sources — not just wages — covering the six full calendar months before filing, since that is the window the means test uses.
A detailed monthly expense breakdown: housing, utilities, food, transportation, insurance, childcare, and other regular costs.
Your most recent federal tax return. If you are self-employed, a profit-and-loss statement may also be needed.¹²

All required forms — the main petition (Form 101) and the means test form (122A-1 for Chapter 7 or 122C-1 for Chapter 13) — are free on the U.S. Courts website.¹³ Redact sensitive information: include only the last four digits of Social Security and financial account numbers, and use only the birth year rather than the full date.

1
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
2
eCFR. 28 CFR Part 58 – Regulations Relating to the Bankruptcy Reform Acts
3
U.S. Department of Justice. Credit Counseling and Debtor Education Information
4
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
5
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
6
Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
7
United States Courts. Chapter 13 – Bankruptcy Basics
8
Office of the Law Revision Counsel. 11 USC 727 – Discharge
9
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
10
Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
11
Internal Revenue Service. Declaring Bankruptcy
12
United States Courts. Instructions for Individuals
13
United States Courts. Bankruptcy Forms