Who Can File Chapter 7 Bankruptcy? Means Test and Waiting Periods

Almost anyone can file a Chapter 7 bankruptcy petition: individuals, married couples, partnerships, and corporations that live in, do business in, or own property in the United States are all eligible debtors under federal law.¹ For individual consumer filers, though, being allowed to file is only the first hurdle. To actually qualify for a discharge of your debts, you also have to pass an income-based means test, complete a credit counseling briefing before you file, and satisfy waiting periods tied to any earlier bankruptcy cases.

Who Counts as an Eligible Debtor

The Bankruptcy Code opens Chapter 7 to a broad range of filers. Individuals, joint spouses, partnerships, corporations, and other business entities all qualify, as long as they have a residence, place of business, or property in the United States.¹

A handful of industries are carved out because they have their own insolvency systems. Railroads, domestic and foreign insurance companies, banks, savings institutions, and credit unions cannot file under Chapter 7.¹ Most Chapter 7 cases are filed by individual consumers and small business owners.

Passing the Means Test

The means test is the main financial gate for individual filers. It decides whether Chapter 7 is appropriate for you or whether you should be routed into a repayment plan under Chapter 13 instead.

The test applies only if your debts are primarily consumer debts, like credit cards, medical bills, and personal loans. If more than half of what you owe comes from business activity, you skip the means test entirely.²

Step One: Income Against the State Median

Start by averaging your gross monthly income over the six full calendar months before you file. Compare that figure to the median household income for your state and household size, using data published by the Census Bureau and updated by the U.S. Trustee Program.³ If you are at or below the median, you pass. Nothing else in the test matters, and you can proceed with Chapter 7.

Step Two: Disposable Income If You’re Over the Median

If your income runs higher than the state median, the test moves to a second calculation aimed at your actual ability to repay. You subtract allowable living expenses from your monthly income, using standardized IRS amounts for food, clothing, housing, transportation, health care, and other necessities.⁴ You also deduct payments on secured debts, such as your mortgage and car loan, plus certain priority debts. What is left is your monthly disposable income.

The court multiplies that monthly figure by 60 (a five-year repayment window) and measures the result against two thresholds, adjusted for inflation every three years. Under the amounts effective April 1, 2025:

Below $10,275 over five years (roughly $171 per month): no presumption of abuse; you qualify for Chapter 7.⁵
Between $10,275 and $17,150 over five years: a presumption of abuse arises only if that amount would cover at least 25 percent of your unsecured debts.⁵
$17,150 or more over five years (about $286 per month or higher): the presumption of abuse automatically applies, and the court will likely conclude you can afford a Chapter 13 plan.⁵

Rebutting a Presumption of Abuse

A presumption of abuse is not the end of the road. You can rebut it by documenting special circumstances the standardized IRS allowances do not capture, such as a serious medical condition or a call to active military duty. You need to itemize each extra expense or income adjustment and provide documentation showing the cost is necessary and reasonable.² If you cannot overcome the presumption, the court will typically dismiss the case or convert it to Chapter 13.

Credit Counseling Before You File

Every individual debtor has to complete a credit counseling briefing during the 180 days before filing the petition. The session must come from a nonprofit budget and credit counseling agency approved by the U.S. Trustee’s office, and it can be done by phone or online.⁶ You walk through your income, expenses, and debts with the counselor so they can gauge whether a debt management plan could work in place of bankruptcy.

The agency then issues a certificate of completion, which you file with your petition. File without it and the court will dismiss your case.⁶ A narrow emergency exception exists: if you can show exigent circumstances and that you tried but could not get counseling within seven days of your request, the court may grant a temporary waiver, but you still need to complete the counseling within 30 days of filing, with a possible 15-day extension for good cause.

Cost should not shut you out. Agencies must offer free or reduced-rate services, and households earning less than 150 percent of the federal poverty level are presumed eligible for a fee waiver.⁷

Waiting Periods From a Prior Bankruptcy

You can file Chapter 7 more than once, but timing rules apply, and they run from the filing date of the earlier case, not the date it closed or discharged.

Prior Chapter 7 discharge: you have to wait eight years from the filing date of the earlier Chapter 7 case before you can receive another Chapter 7 discharge.⁸
Prior Chapter 13 discharge: you have to wait six years from the filing date of the Chapter 13 case. That bar does not apply if you paid 100 percent of unsecured claims in the earlier plan, or if you paid at least 70 percent and the plan was proposed in good faith and represented your best effort.⁸

You must disclose every prior bankruptcy filing in your petition. Filing too early does not stop you from opening a case, but the court will deny discharge for every debt in the new petition if the waiting period has not run.

The 180-Day Refiling Bar

A separate short-term bar targets debtors who misuse the process. You cannot file any bankruptcy case for 180 days if your previous case was dismissed for either of these reasons:

Failure to comply with court orders, such as skipping hearings or ignoring the court’s directions.¹
Voluntary dismissal after a creditor moved to lift the automatic stay, typically to proceed with a foreclosure or repossession.¹

The bar is meant to stop people from filing and dismissing cases repeatedly just to trigger the automatic stay, the federal protection that halts lawsuits, wage garnishments, and collection actions the moment a petition is filed.⁹

Eligibility Doesn’t Mean Every Debt Goes Away

Qualifying to file is not the same as wiping out everything you owe. Even a granted Chapter 7 discharge leaves several categories of debt in place, so weigh eligibility against what you actually need discharged.

Debts that survive Chapter 7 include:¹⁰

Domestic support obligations such as child support and alimony.
Recent income taxes, taxes for years you did not file a return, and taxes tied to fraud.
Government-backed and qualified private student loans, unless you file a separate adversary proceeding and prove undue hardship.
Debts arising from fraud, false pretenses, or fraudulent financial statements.
Court judgments for willful and malicious injury to a person or property.
Property division and other financial obligations from a divorce decree beyond support.
Criminal fines, penalties, and restitution.
Consumer debts over $500 for luxury goods charged within 90 days of filing, and cash advances over $750 taken within 70 days, which are presumed non-dischargeable.¹⁰

If the debts you most need relief from sit on this list, being eligible for Chapter 7 may not give you the outcome you are looking for, and a conversation with a bankruptcy attorney about Chapter 13 or other options is worth the time before you file.

1
Office of the Law Revision Counsel. 11 U.S.C. 109 – Who May Be a Debtor
2
Office of the Law Revision Counsel. 11 U.S.C. 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
3
U.S. Department of Justice. Means Testing
4
Internal Revenue Service. Collection Financial Standards
5
Office of the Law Revision Counsel. 11 U.S. Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
6
Office of the Law Revision Counsel. 11 U.S. Code 109 – Who May Be a Debtor
7
U.S. Department of Justice. Frequently Asked Questions (FAQs) – Credit Counseling
8
Office of the Law Revision Counsel. 11 U.S.C. 727 – Discharge
9
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
10
Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge