How to Prepare for Bankruptcy: Means Test, Documents, and Fees

Preparing to file for bankruptcy means making five decisions and finishing five tasks before you ever walk into the clerk’s office: choose between Chapter 7 and Chapter 13, complete a required credit counseling session, gather every financial record a trustee could ask for, avoid transactions that will be clawed back, and assemble an accurate petition with the filing fee. The fee is $338 for Chapter 7 or $313 for Chapter 13, and without a credit counseling certificate in hand your case faces immediate dismissal.¹² Getting these pieces right is what keeps your case from unraveling.

Decide Which Chapter Fits Your Situation

Everything else in your preparation flows from this choice. The two chapters available to most individuals work very differently.

Chapter 7 is liquidation. A court-appointed trustee takes your non-exempt property, sells it, and uses the proceeds to pay creditors. In exchange, most of your remaining unsecured debts are wiped out, usually within about four months of filing.³ You qualify by passing the means test described below.

Chapter 13 is a repayment plan. You keep your property but commit to a three-to-five-year court-supervised plan funded by your regular income, and the court discharges qualifying debts once you finish.³ You need regular income to file under Chapter 13, and your debts must fall under the statutory caps: $1,580,125 in secured debt and $526,700 in unsecured debt.²

Complete Credit Counseling Before You File

Federal law requires every individual to complete a credit counseling briefing before becoming eligible to file.² The session has to happen within 180 days before your filing date, and the provider has to be a nonprofit agency approved by the U.S. Trustee’s Office. Sessions usually run about an hour and cover your current finances, alternatives to bankruptcy, and a basic budget analysis.⁴

Fees typically run $10 to $50, and agencies are required to reduce or waive the fee if you cannot afford it. When the session ends, the agency issues a certificate of completion. You file that certificate with your petition; without it, the case will be dismissed.²

A narrow exception exists. If you can show exigent circumstances and prove you tried but could not get an appointment within seven days of requesting one, the court may temporarily waive the requirement, but you still have to complete the counseling within 30 days of filing.

Gather Your Financial Documents

Accurate forms depend on thorough records. Start collecting these well before you plan to file:

Tax returns for every tax period within the four years before your filing date. The IRS can move to dismiss your case if any required return is missing.⁵⁶
Proof of income covering the six months before filing. Pay stubs, business income records, or similar documentation feed the means test.
Current balances for every checking account, savings account, investment portfolio, and retirement account.
Titles, deeds, and appraisals for vehicles, real estate, and other valuable assets. You will value each item at its current market price, not what you paid.
Statements from every creditor: credit cards, medical providers, mortgage, auto lender, student loan servicer.

Pull a free copy of your credit report from all three bureaus before you file. Reports often surface forgotten debts, an old medical bill or a long-closed card, that still need to appear in your petition. Leaving a creditor off can complicate your discharge.

Avoid These Moves in the Months Before You File

The trustee will scrutinize your transactions from the months and years before filing. A few patterns reliably cause trouble.

Transferring Property

A trustee can reverse any transfer of your property made within two years before filing if it was done to put assets beyond the reach of creditors or if you received less than fair value in return.⁷ Giving a car to a family member, selling property to a friend at a steep discount, or moving money into someone else’s account can all be undone. State law may extend the lookback further.

Paying Certain Creditors First

Pay off one creditor and ignore others in the 90 days before filing, and the trustee can claw that payment back and redistribute it. The window stretches to a full year when the creditor is an insider: a relative, business partner, or someone with a close personal or financial relationship with you.⁸ Repaying your parents or a friend right before filing is a textbook example.

Running Up New Debt

Luxury purchases totaling more than $900 to a single creditor within 90 days of filing are presumed non-dischargeable, meaning the court will likely hold you responsible for them.⁹ Cash advances over $1,250 taken within 70 days of filing face the same presumption. The court treats recent splurges as evidence you never meant to repay.

Run the Means Test

The means test decides whether your income is low enough to qualify for Chapter 7. It compares your average monthly income over the past six months to the median income for a household of your size in your state. If your income falls below that median, you generally pass.

If your income is above the median, a second calculation kicks in. You subtract allowed monthly expenses (housing, transportation, taxes, health insurance, and other necessities) from your income. If the leftover disposable income is too low to fund a meaningful repayment plan, you can still qualify for Chapter 7. You report the numbers on Official Bankruptcy Form 122A-1 (current monthly income) and, when needed, Form 122A-2 (the full means test). Failing the test doesn’t close the door on bankruptcy; it usually means you file under Chapter 13 and repay over time.

Complete the Petition and Schedules

The petition is a package of official forms, each one capturing a different slice of your financial life. All are on the U.S. Courts website.¹⁰ It starts with Form 101, the Voluntary Petition for Individuals Filing for Bankruptcy, where you provide identifying information and select the chapter.¹¹ From there the financial data goes into numbered schedules:

Schedule A/B lists all of your property, from real estate to bank accounts to household items, each at current market value.
Schedule C claims the property you want protected from liquidation as exempt, such as a portion of home equity or your primary vehicle.
Schedule D lists secured creditors whose loans are tied to specific collateral.
Schedule E/F lists unsecured creditors, split between priority debts (certain taxes, domestic support) and general debts (credit cards, medical bills).
Schedule G lists ongoing contracts and leases, like an apartment or car lease.
Schedule I shows your current monthly income from all sources.
Schedule J shows your current monthly expenses.

The gap between Schedule I and Schedule J is your disposable income, which the trustee cross-references against your means test numbers. You also fill out the Statement of Financial Affairs (Form 107), which asks about lawsuits, property transfers, gifts, gambling losses, and other recent financial activity. This is where any insider payments or asset transfers get disclosed.

Every page is signed under penalty of perjury. Filing false or incomplete information can bring denial of your discharge, fines of up to $250,000, or imprisonment for up to 20 years.¹²

Budget for the Filing Fee

You file your completed forms with the clerk of the bankruptcy court in the judicial district where you live. Most courts use electronic filing, though in-person or mail options may exist under local rules.

The total filing fee is $338 for Chapter 7 (a $245 base fee, $78 administrative fee, and $15 trustee surcharge) or $313 for Chapter 13 (a $235 base fee and $78 administrative fee).¹¹³ If paying upfront isn’t realistic, you have two options:

Installment payments on Form 103A are available in both Chapter 7 and Chapter 13 cases and let you spread the fee across several payments.
A full fee waiver on Form 103B is available only in Chapter 7. You may qualify if your household income is below 150 percent of the federal poverty line and you cannot afford installments.¹⁴

The credit counseling certificate has to come in with the petition. The clerk will not accept a filing missing the certificate or the fee, unless you have filed a fee application.¹⁴ Attorneys are optional but common. Legal fees for a standard bankruptcy run roughly $500 to $4,000 or more, depending on the chapter and complexity.

Know Which Debts Bankruptcy Won’t Erase

Some debts survive both Chapter 7 and Chapter 13. Knowing which ones affects whether filing will actually improve your situation:

Child support and alimony cannot be discharged under any circumstances.⁹
Student loans survive unless you can prove repayment would impose an “undue hardship,” a standard that is difficult to meet.⁹
Taxes due within the past three years, taxes for which no return was filed, and taxes connected to fraud are generally non-dischargeable.⁹
Debts from fraud, false pretenses, or willful injury to someone remain.
Criminal fines and restitution are not wiped out.

In a Chapter 13 case, non-dischargeable debts are folded into your repayment plan. You still owe them, but you pay them on a structured schedule alongside everything else. If most of what you owe falls into one of these categories, bankruptcy may not be the right tool, and that is worth knowing before you spend the filing fee.

1
Office of the Law Revision Counsel. 28 USC 1930 – Bankruptcy Fees
2
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
3
United States Courts. Discharge in Bankruptcy
4
U.S. Department of Justice. Frequently Asked Questions – Credit Counseling
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Office of the Law Revision Counsel. 11 USC 1308 – Filing of Prepetition Tax Returns
6
Internal Revenue Service. Declaring Bankruptcy
7
Office of the Law Revision Counsel. 11 USC 548 – Fraudulent Transfers and Obligations
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Office of the Law Revision Counsel. 11 USC 547 – Preferences
9
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
10
U.S. Courts. Bankruptcy Forms
11
United States Courts. Voluntary Petition for Individuals Filing for Bankruptcy
12
United States Courts. Official Form 101 Voluntary Petition for Individuals Filing for Bankruptcy
13
U.S. Courts. Bankruptcy Court Miscellaneous Fee Schedule
14
Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 1006 – Filing Fee