Chapter 13 Eligibility: Debt Limits, Income, and Prior Filings

To meet Chapter 13 eligibility requirements, you must be an individual (not a corporation or partnership) with income steady enough to fund a repayment plan, and your debts have to fall under two ceilings: less than $526,700 in unsecured debt and less than $1,580,125 in secured debt for cases filed through early 2028. You also have to complete an approved credit counseling briefing in the 180 days before you file.¹

Who Can File

Chapter 13 is for people, not companies. Corporations, LLCs, and partnerships can’t use it and have to look at Chapter 7 or Chapter 11 instead.²

If you run a sole proprietorship, the law treats you and the business as the same person. Your personal credit card balances, your mortgage, and your business equipment loans all belong in a single Chapter 13 case. Formal business entities can’t combine personal and business obligations the same way.

Married couples can file one joint petition together instead of paying to run two cases in parallel.² One category of individuals is shut out regardless of the numbers: stockbrokers and commodity brokers cannot file under Chapter 13.¹

The Debt Limits

As of April 1, 2025, unsecured debts must be less than $526,700 and secured debts must be less than $1,580,125. These figures adjust for inflation every three years and stay in effect through early 2028.¹ Exceed either cap on the day you file and you’re out of Chapter 13 entirely.

Secured debts are backed by collateral: mortgages, car loans, liens on business equipment. Unsecured debts have no collateral behind them and include credit card balances, medical bills, and personal loans. The two categories are checked separately, so you can be under one limit and over the other and still be ineligible.

What Actually Counts Toward the Caps

Only debts that are both non-contingent and liquidated count. A non-contingent debt is one where every event needed to create your liability has already happened. If you co-signed a loan and the primary borrower is still current, your guarantee is contingent because your obligation only kicks in if they default. A liquidated debt is one whose amount can be pinned down precisely, either from a contract or straightforward arithmetic; a pending personal injury lawsuit with damages still to be decided is unliquidated.¹

If you’re close to a ceiling, these distinctions can decide the case. What matters is the total on your filing date; changes after that generally don’t affect eligibility.

The Regular Income Test

The bankruptcy code defines an eligible filer as “an individual whose income is sufficiently stable and regular to enable such individual to make payments under a plan.”³ The language is deliberately broad. A salaried paycheck isn’t required. Self-employment earnings, sales commissions, Social Security, pension payments, and seasonal work all qualify. Reliable financial contributions from a spouse or a roommate can count too, as long as the court is satisfied the money will keep coming for the length of the plan.

“Regular” doesn’t mean identical every month. Courts know hourly workers get uneven paychecks and freelancers have slow months. What they look for is a predictable pattern. A gig worker with two solid years of comparable annual earnings usually passes even if the monthly figures bounce around. Someone with long gaps between jobs has a much harder case to make.

Filers with seasonal earnings sometimes set money aside during good months to cover payments during lean ones, smoothing irregular income into a steady payment stream. That’s exactly what the trustee wants to see. Self-employed filers should expect a request for at least 12 months of profit-and-loss statements on top of the usual paperwork.

Disposable Income and Whether the Plan Can Work

Income alone doesn’t get you in. Your budget has to show a surplus after necessary expenses like housing, food, transportation, and medical care. That surplus, called disposable income, is what actually funds the plan. No surplus, no confirmation, because the plan would be set up to fail.²

The statute requires that all of your projected disposable income during the plan period go to unsecured creditors, unless the plan pays those claims in full sooner.⁴ This is where a lot of cases stall. People assume they qualify because they earn enough to make a payment, then find their allowable expenses eat the room in the budget. The math has to work on paper.

How Long Your Plan Will Last

Plan length depends on how your household income compares to the median in your state for a household your size. Below median, the commitment is three years. At or above median, it’s a minimum of five.⁴

A three-year plan can be voluntarily extended if you need more room to catch up on things like mortgage arrears. Any plan can end earlier if it pays all allowed unsecured claims in full before the commitment period runs out.⁴ The median comparison itself is done by averaging your income over the six full calendar months before you file.

Credit Counseling Before You File

You have to complete a credit counseling briefing from an approved nonprofit agency in the 180 days before your filing date.¹ Sessions run by phone or online and usually cost between $10 and $50. Agencies approved by the U.S. Trustee Program are required to cap fees at $50, and fee waivers are available if your household income is below 150% of the federal poverty guidelines.⁵

A second, separate debtor education course is required after filing and before the court will grant a discharge. Skipping either course can sink the case.⁵

When a Prior Bankruptcy Blocks You

If you’ve been through bankruptcy before, timing rules control when a new Chapter 13 discharge is available:

After a Chapter 7, 11, or 12 discharge, four years must pass from the date the earlier case was filed.
After a prior Chapter 13 discharge, the waiting period is two years from the date the earlier Chapter 13 was filed.

The clock runs from the filing date of the prior case to the order for relief in the new one.⁶ You can file a new Chapter 13 case before the waiting period ends, but you won’t get a discharge at the end of it.

A separate rule bars any bankruptcy filing for 180 days if your previous case was dismissed for failure to comply with court orders, or if you voluntarily dismissed after a creditor moved to lift the automatic stay.¹ That one blocks filing outright, not just discharge.

Documents You’ll Need to Prove Eligibility

Establishing that you qualify takes several categories of financial records. The petition itself collects a full summary of your debts, assets, income, and expenses.⁷ A separate form calculates your current monthly income by averaging the six months before filing; that number decides your plan length and whether your disposable income meets the statutory test.

Beyond the forms, expect to hand over:

Copies of any pay stubs or other payment records received within 60 days before you file.⁸
Tax returns for the four tax years ending on or before the filing date. These must be on file with the tax authorities no later than the day before the meeting of creditors.⁹
A complete list of every creditor with exact balances and addresses, so nothing gets left out of the debt-limit calculation.

Missing the tax return deadline can get your case dismissed before the plan ever starts, so treat it as one of the harder edges of eligibility rather than a housekeeping item.

1
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
2
United States Courts. Chapter 13 – Bankruptcy Basics
3
Legal Information Institute. 11 USC 101(30) – Individual With Regular Income
4
Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan
5
United States Courts. Credit Counseling and Debtor Education Courses
6
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
7
United States Courts. Official Form 101 – Voluntary Petition for Individuals Filing for Bankruptcy
8
Office of the Law Revision Counsel. 11 USC 521 – Debtor’s Duties
9
Office of the Law Revision Counsel. 11 USC 1308 – Filing of Prepetition Tax Returns