What qualifies you for bankruptcy comes down to four things: the chapter you file under, whether your income fits that chapter’s rules, whether your debts fall within its limits, and whether you’ve cleared the procedural prerequisites like credit counseling and any waiting period from a prior case. Chapter 7 turns on an income screening called the means test. Chapter 13 requires steady income and caps how much debt you can carry. Both share a set of universal requirements that apply no matter what you earn or owe.
Chapter 7: The Means Test
Chapter 7 erases most unsecured debts through liquidation, and the means test decides who can use it. The test asks whether your income is low enough to justify wiping debts out rather than repaying part of them through a plan.
The first step compares your household income to your state’s median for a family of your size. If you fall below that median, you pass automatically and no further analysis is needed. The U.S. Trustee Program publishes the current state figures for use on the official means test forms (Forms 122A-1 and 122C-1). For households larger than four, add $11,100 to the four-person median for each additional member. The numbers update periodically, so check the figures that apply to your filing date.
If your income sits above the median, the calculation continues. You subtract allowed monthly expenses using national and local IRS standards for categories like housing, food, transportation, and healthcare. You also deduct actual payments on secured debts such as mortgages and car loans, plus priority obligations like back taxes and child support. Whatever disposable income remains determines whether a “presumption of abuse” arises, which signals you have enough left over to fund a Chapter 13 plan instead.
One detail catches many filers off guard. “Current monthly income” on the means test is not last month’s paycheck. It’s the average of your gross income over the full six calendar months before you file. A one-time bonus, severance payment, or seasonal spike can inflate the figure even when your normal earnings are modest. Timing the filing date so those six months reflect your real income matters more than most people realize.
Chapter 13: Income and Debt Limits
Chapter 13 works from the opposite direction. Instead of liquidating, you propose a court-supervised repayment plan lasting three to five years. If your household earns below the state median, the plan runs three years unless the court approves a longer period. Earn above the median and you commit to five.
Qualifying requires a regular source of income steady enough to fund the monthly payments. It doesn’t have to be a traditional paycheck. Pension income, Social Security, rental income, and consistent freelance earnings all count as long as the amounts are predictable enough to support a budget.
Chapter 13 also has debt ceilings. For cases filed between April 1, 2025, and March 31, 2028, your noncontingent, liquidated unsecured debt must be under $526,700, and your secured debt must be under $1,580,125. Debts above either ceiling push you out of Chapter 13, and Chapter 11 becomes the alternative. These thresholds adjust every three years for inflation. Corporations and partnerships cannot use Chapter 13 at all.
Credit Counseling Before You File
Every individual filer must complete a credit counseling session with an agency approved by the U.S. Trustee Program. It has to happen within 180 days before you file your petition, and the agency issues a certificate proving you finished it. No certificate, no case: the court will dismiss the filing. The session reviews your budget and spending and considers whether alternatives like a debt management plan could resolve things without bankruptcy.
A narrow set of exceptions exists. Courts can waive the requirement for people who cannot participate because of mental illness, a physical disability that prevents attending in person, by phone, or online, or active military service in a combat zone. Outside those situations, the rule applies to everyone regardless of income or debt type.
Waiting Periods From a Previous Bankruptcy
Federal law limits how often you can receive a discharge and how quickly you can refile after an earlier case.
If you already received a Chapter 7 discharge, you must wait eight years from the filing date of that case before filing another Chapter 7. To switch from a prior Chapter 7 discharge into a new Chapter 13, the wait is four years. After a Chapter 13 discharge, you must wait two years before receiving another Chapter 13 discharge.
A separate rule bars any new filing for 180 days when your previous case ended badly. If the court dismissed your last case because you disobeyed court orders or failed to appear, or if you voluntarily dismissed your own case after a creditor asked the court to lift the automatic stay, you’re locked out for six months. The rule stops filers from using repeated petitions as a stalling tactic.
Filing in the Right Court
You must file in the correct federal judicial district. Your case belongs where you have lived or maintained your principal assets for the greater part of the 180 days before filing. Shopping for a friendlier court in another district isn’t an option.
Debts Bankruptcy Won’t Discharge
Qualifying to file and getting every debt erased are separate questions. Some debts survive even a successful discharge, and if the bulk of what you owe falls into these categories, filing may not deliver the relief you’re expecting.
- Child support and alimony are never dischargeable under any chapter.
- Federal and private student loans survive bankruptcy unless you prove “undue hardship” in a separate court proceeding, which remains a difficult standard to meet.
- Recent income taxes, taxes for which no return was filed, and taxes involving fraud generally cannot be discharged.
- Debts you obtained through false representations or dishonesty stick.
- Court-ordered criminal fines and restitution are not dischargeable.
- Debts for death or personal injury caused by driving under the influence survive bankruptcy.
If most of your debt sits in these categories, the filing fees, credit impact, and time commitment may not be worth what you’d actually walk away from.