To qualify for Chapter 7 bankruptcy, you generally need to pass the federal means test, complete an approved credit counseling session within 180 days before filing, and wait out any timing bar left over from a prior bankruptcy discharge. Chapter 7 eligibility is designed to steer filers who could realistically repay some of their debt into Chapter 13 instead, so the rules focus on your income, your recent filing history, and a few procedural prerequisites.
The Means Test
The means test is the main eligibility hurdle. It’s a two-step income calculation under 11 U.S.C. § 707(b) that decides whether your finances actually require Chapter 7 or whether you have enough disposable income to fund a repayment plan.1Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13
Step One: Comparing Your Income to the State Median
Start by calculating your “current monthly income.” That’s the average of all gross income you received during the six full calendar months before your filing date. It includes wages, business income, rental income, pension payments, and regular contributions from others toward household expenses.
If your household income falls at or below the median for a household of your size in your state, you pass the means test outright and can proceed with Chapter 7. The U.S. Trustee Program publishes the median income figures using Census Bureau data, with the most recent update issued in March 2026 for cases filed on or after April 1, 2026.2United States Department of Justice. Means Testing
Step Two: The Disposable Income Calculation
If your income exceeds the median, you move to the second step. Here you subtract allowed monthly expenses from your income to see how much you could theoretically pay creditors over five years. Many of these deductions are standardized rather than tied to what you actually spend. The IRS publishes National Standards for food, clothing, and personal care and Local Standards for housing and transportation, and those amounts apply regardless of your real spending.3Office of the Law Revision Counsel. 11 U.S. Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 Certain actual expenses, including health insurance, disability insurance, and childcare, are also deductible.
Multiply the leftover monthly amount by 60 to get a five-year total. The court presumes you’re abusing Chapter 7 if that total hits a threshold tied to your unsecured debt load. Under the adjusted figures effective for 2026, the floor is $10,275 over five years (roughly $171 per month) and the ceiling is $17,150 (roughly $286 per month).1Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 Below $10,275, you pass regardless of your debt. At $17,150 or more, abuse is presumed. Between those amounts, abuse is presumed only if the total equals or exceeds 25 percent of your unsecured debt.
Rebutting a Finding of Abuse
Failing the second step doesn’t automatically close the door. You can rebut the presumption of abuse by showing “special circumstances” that justify additional expenses or adjustments to income. The statute doesn’t define the phrase exhaustively, but serious medical conditions, impending job loss, and active military deployment are the kinds of situations courts have accepted. You’ll need to document the specific expense or income adjustment and explain why no reasonable alternative exists. If the court rejects the rebuttal, your case will be dismissed or converted to Chapter 13.
Military Service Members and the Means Test
Some military-connected filers skip the means test entirely. Disabled veterans qualify for a full exemption if they hold any VA or Department of Defense disability rating, even as low as 10 percent, and at least half of their total debt was incurred while on active duty or performing homeland defense activity. Both the disability and the debt timeline have to be documented with the filing.
A narrower rule, the Honoring American Veterans in Extreme Need (HAVEN) Act, excludes specific types of military income from the means test calculation for all active-duty personnel and for Reserve or National Guard members on active-duty orders. The excluded income includes VA disability payments, special compensation for dependents, combat zone pay, hostile fire pay, and imminent danger pay. Stripping that income out often drops a filer’s current monthly income below the state median, so the second step never comes up.
Waiting Periods After a Previous Bankruptcy
If you’ve received a bankruptcy discharge before, federal timing rules can block a new Chapter 7 discharge even when your income qualifies.
You cannot receive a Chapter 7 discharge if your previous Chapter 7 case was filed within the last eight years. The clock runs from the filing date of the earlier case, not from when the discharge was actually granted.4Office of the Law Revision Counsel. 11 U.S. Code 727 – Discharge
Different timing applies if the prior case was Chapter 13. You must wait six years from the filing date of that Chapter 13 case before receiving a Chapter 7 discharge, unless the earlier plan paid 100 percent of allowed unsecured claims, or paid at least 70 percent under a plan proposed in good faith and representing your best effort.4Office of the Law Revision Counsel. 11 U.S. Code 727 – Discharge
Filing inside the waiting period won’t always get the case thrown out, but the court will deny your discharge. You’d be left with all the downsides of bankruptcy and none of the debt relief.
Credit Counseling Before You File
You have to complete a credit counseling briefing within the 180 days before you file your petition. The requirement under 11 U.S.C. § 109(h) applies to nearly every individual filer, and courts dismiss cases when the certificate is missing or the session falls outside that 180-day window.5Office of the Law Revision Counsel. 11 U.S. Code 109 – Who May Be a Debtor Some courts have rejected counseling completed on the same day as filing when the timing was ambiguous, so leaving at least a day of buffer is safer.6United States Bankruptcy Court District of Columbia. Notice to All Debtors About Prepetition Credit Counseling Requirement
The session reviews your financial situation and discusses alternatives to bankruptcy. It must be provided by an agency approved by the U.S. Trustee’s office, and the current list is on the Department of Justice website.7United States Department of Justice. List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. 111 Sessions typically run 60 to 90 minutes and can be completed online, by phone, or in person. Fees generally fall between $20 and $50, though approved agencies have to provide the service even if you can’t pay. The certificate of completion gets filed with your bankruptcy petition.
What Eligibility Doesn’t Guarantee
Qualifying to file is not the same as getting a clean financial slate, and two issues often surprise people who focus only on the eligibility rules.
Property You May Have to Give Up
Chapter 7 is a liquidation proceeding, so a trustee can sell your non-exempt property to pay creditors. Exemption laws shield certain assets up to specified dollar limits, and most filers end up keeping everything they own because their property falls within those allowances. Federal bankruptcy law provides exemptions covering a home, a vehicle, household goods, retirement accounts, and a general-purpose “wildcard” amount, all codified in 11 U.S.C. § 522(d) and adjusted every three years.
Roughly half of states require you to use their own exemption scheme instead of the federal one; the rest let you choose between state and federal, but not mix them. Which set is better depends on your assets. A filer with significant home equity might benefit from a generous state homestead exemption, while a renter with varied personal property might find the federal wildcard more useful. Getting the choice wrong can cost you property that could have been protected.
Debts That Chapter 7 Won’t Erase
Qualifying for Chapter 7 doesn’t mean every debt disappears. Several categories are excluded from discharge under 11 U.S.C. § 523, and if most of your debt falls into one of them, filing may not deliver meaningful relief. The major survivors include child support and alimony, recent income taxes and taxes tied to unfiled or fraudulent returns, most student loans (absent proof of “undue hardship,” a standard courts read narrowly), debts obtained by fraud or false financial statements, drunk driving liability, debts for willful and malicious injury, criminal restitution and most government fines, and debts owed to creditors you forgot to list. Luxury purchases over $500 made within 90 days of filing and cash advances over $750 taken within 70 days create a presumption of fraud that can block discharge of those specific debts.8Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge
Weighing these limits against your actual debt mix is the practical final step in deciding whether Chapter 7 is the right fit, even when the eligibility rules say you qualify.