Do I Qualify for Chapter 7 Bankruptcy?

"Do I qualify for Chapter 7?" has a cleaner answer than most people expect. There are four gates. Three of them are yes-or-no questions about counseling and past cases. The fourth, the means test, is where the math lives, and for most filers it is a single comparison against a published number. This page walks through all four, with a worked example that uses made-up figures on purpose, because the real ones change on a schedule.

Key points

• Income is measured over the six full calendar months before the month of filing, not last year's tax return and not the current paycheck.
• At or below the state median for your household size generally means Chapter 7 is available, full stop. No expense analysis is required.
• Above the median is not a wall. The second step subtracts standardized allowances and actual expenses; many above-median filers still qualify.
• The medians and allowances change on a schedule. The U.S. Trustee Program updated median-income tables for cases filed on or after April 1, 2026 and IRS standards for cases filed on or after July 15, 2026. This page never states a dollar median as current fact.
• Filers whose debts are mostly business debts, and certain disabled veterans and reservists, are exempt from the means test entirely.
• Qualifying is not the same as it being the right choice. Chapter 7 can cost non-exempt property that Chapter 13 would keep.

Gate 1: Credit counseling in the last 180 days

Under 11 U.S.C. §109(h), no individual may file under any chapter without a briefing from an approved credit counseling provider within the 180 days before the petition. The certificate is filed with the case. There is a narrow deferral for exigent circumstances, but not a waiver. The DOJ list of approved providers is the only list that counts.

Gate 2: No disqualifying dismissal in the last 180 days

Under §109(g), a person cannot file if, in the previous 180 days, a prior case was dismissed because they willfully failed to appear or obey court orders, or was voluntarily dismissed after a creditor asked the court for relief from the automatic stay. This catches people who filed quickly to stop a foreclosure, dropped the case, and want to file again.

Gate 3: No recent prior discharge

The case can technically be filed even inside these windows, but no discharge would issue, which defeats the purpose. Anyone with a prior bankruptcy needs the old case number and filing date before deciding anything.

Gate 4: The means test

The full mechanics, including what counts as income, the exclusions, and how step two works, are on the bankruptcy means test. What follows is the piece that page does not do: a worked example of step one.

A worked example (illustrative figures only)

Suppose a household of three plans to file in October. The six-month window is April through September.

Now suppose the same household earned $46,000 in the window instead. That averages $7,667 a month and annualizes to $92,000, above the illustrative $85,000 median. That does not end the inquiry. Step two on Form 122A-2 deducts the IRS National and Local Standards for food, housing, transportation, and other categories, plus actual costs like taxes, health insurance, and secured debt payments, and asks whether what is left over 60 months exceeds the thresholds in §707(b)(2). Many above-median households with a mortgage, a car payment, and childcare finish step two with little or no disposable income and still qualify.

What changes the answer

• Timing. The six-month window rolls. Someone who lost a job or overtime three months ago may fail step one today and pass it in three months. The reverse is also true after a raise or a bonus.
• Household size. District practice differs on how to count a non-filing spouse, adult children, and others in the home. It moves the median.
• Excluded income. Social Security benefits are excluded from current monthly income. Under the HAVEN Act, certain VA and Department of Defense disability benefits are also excluded; the U.S. Trustee publishes FAQs on which ones.
• Business debts. If more than half of the debt is non-consumer (business) debt, §707(b) and the means test do not apply at all.
• Disabled veterans and reservists. Certain disabled veterans whose debts arose during active duty, and certain reservists and National Guard members called to active duty, are exempt from the presumption of abuse under §707(b)(2)(D). Official Form 122A-1Supp is where that exemption is claimed.

Qualifying is not the same as choosing

Common mistakes to avoid

• ✕Using a median-income figure from an article, a calculator, or memory. Only the U.S. Trustee's table for the filing date is current.
• ✕Counting the wrong six months. The window is the six full calendar months before the month of filing.
• ✕Leaving out household contributions, side income, or a spouse's income when only one spouse files. The forms require it and are signed under penalty of perjury.
• ✕Assuming above-median means disqualified. Step two exists precisely because many above-median filers still qualify.
• ✕Forgetting a prior bankruptcy. An eight-year Chapter 7 bar or six-year Chapter 13 bar means no discharge even if the case is accepted.
• ✕Treating an online means-test screener as a legal conclusion rather than an educational estimate.

Try the numbers yourself with the Chapter 7 means test walkthrough — private, in-browser, and it never issues a verdict.

Frequently asked questions

What is the income limit for Chapter 7?

There is no fixed dollar limit. Step one of the means test compares household income for the six months before filing, annualized, to the median family income for the filer's state and household size, published by the U.S. Trustee Program and updated on a schedule. At or below the median, Chapter 7 is generally available; above it, a second calculation of disposable income decides.

Can I qualify for Chapter 7 if my income is above the median?

Often, yes. Above-median filers complete Official Form 122A-2, which subtracts IRS-standard living allowances and certain actual expenses such as taxes, health insurance, and secured debt payments. A presumption of abuse arises only if the remaining disposable income over 60 months exceeds the thresholds in 11 U.S.C. §707(b)(2), and even then it can be rebutted with special circumstances.

How is income counted for the Chapter 7 means test?

As "current monthly income": the average of gross income from nearly all sources over the six full calendar months before the filing month, including wages, business income, rental income, and regular contributions from others to household expenses. Social Security benefits are excluded, and the HAVEN Act excludes certain veterans' disability benefits.

How soon can I file Chapter 7 again after a previous bankruptcy?

A Chapter 7 discharge is barred if a prior Chapter 7 discharge came from a case filed within the past eight years, or a prior Chapter 13 discharge from a case filed within the past six years unless that plan paid creditors in full or at least 70 percent in good faith. A case dismissed in the last 180 days for disobeying court orders, or dropped after a creditor sought stay relief, also blocks refiling.

Do I have to take a credit counseling course to qualify for Chapter 7?

Yes. A briefing from a U.S. Trustee-approved provider within the 180 days before filing is required for every individual filer under 11 U.S.C. §109(h). It can be done online or by phone, and a certificate is filed with the petition. There is a brief deferral for genuine emergencies, but not a waiver.

Does qualifying for Chapter 7 mean I should file Chapter 7?

No. Chapter 7 allows a trustee to sell property that is not exempt under the applicable state or federal exemptions, and it has no mechanism to catch up on a mortgage or car loan. Someone who qualifies but has non-exempt equity or arrears on property they want to keep may be better served by Chapter 13, or by a non-bankruptcy option.

When to talk to a professional