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

Anyone with a U.S. residence, place of business, or property can file Chapter 7 bankruptcy — individuals, married couples filing jointly, partnerships, and corporations all qualify under federal law.¹ For individuals, though, filing is only the start. To actually qualify for a discharge of your debts, you also need to pass the income-based means test, complete a credit counseling course before you file, and satisfy waiting periods tied to any earlier bankruptcy cases.

Who Counts as an Eligible Debtor

Federal bankruptcy law is broad about who can be a debtor. Individuals, married couples, partnerships, corporations, and other business entities are all eligible as long as they have some connection to the United States through residence, a place of business, or property held here.¹

A handful of industries are shut out because they operate under their own insolvency systems. Railroads, domestic and foreign insurance companies, banks, savings institutions, and credit unions cannot file under Chapter 7.¹ Everyone else who meets the U.S.-connection requirement can put a case on file. Whether they qualify for a discharge is the next question.

Passing the Means Test

The means test is the main financial gate for individual filers. It checks whether your income is low enough that Chapter 7 is appropriate, or whether you should be steered into a Chapter 13 repayment plan instead.

One boundary matters up front: the means test only applies to individuals whose debts are primarily consumer debts, such as credit cards, medical bills, and personal loans. If more than half of your total debt comes from business activities, you skip the means test entirely.²

Step One: Compare Your Income to 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 periodically by the U.S. Trustee Program.³ If you land at or below the median, you pass. No further calculation is needed.

Step Two: Calculate Disposable Income

If your income is above the median, the test moves to a second phase that looks at what you can actually afford to repay. You subtract allowable living expenses from your monthly income. Those expenses use standardized IRS amounts for food, clothing, housing, transportation, health care, and other necessities.⁴ You also deduct payments on secured debts like mortgages and car loans, along with certain priority debts. What is left is your monthly disposable income.

Multiply that monthly figure by 60 (a five-year window) and check it against two inflation-adjusted thresholds. Under the amounts effective April 1, 2025:

Below $10,275 over five years, or roughly $171 a month: no presumption of abuse, and you qualify for Chapter 7.⁵
Between $10,275 and $17,150 over five years: a presumption of abuse arises only if that amount could pay at least 25 percent of your unsecured debts.⁵
$17,150 or more over five years, or about $286 a month and up: the presumption of abuse applies automatically, and the court will likely conclude you can afford Chapter 13.⁵

Rebutting the Presumption

A presumption of abuse is not an automatic rejection. You can rebut it by documenting special circumstances the standardized IRS allowances do not account for, such as a serious medical condition or a call to active military duty. You will need to itemize each additional expense or income adjustment and provide supporting documentation showing the cost is necessary and reasonable.² If you cannot overcome the presumption, the case will typically be dismissed or converted 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 session must come from a nonprofit budget and credit counseling agency approved by the U.S. Trustee’s office, and it can be taken by phone or online.⁶ During the briefing, you walk through your income, expenses, and debts so the counselor can evaluate whether a debt management plan might work as an alternative.

The agency issues a certificate of completion, and you file it with your petition. Skip the certificate and the court will dismiss your case.⁶ A narrow emergency exception exists: if you can show exigent circumstances and that you tried but were unable to get counseling within seven days of your request, the court may grant a temporary waiver, but you still have to complete the counseling within 30 days of filing (with a possible 15-day extension for good cause).

Cost should not be a barrier. Approved 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 After a Prior Bankruptcy

You can file Chapter 7 more than once, but timing rules apply. The clock runs from the filing date of the earlier case, not the date it was closed or discharged.

If you received a Chapter 7 discharge in the past, you must wait eight years from the filing date of that earlier case before you can receive another Chapter 7 discharge.⁸
If you received a Chapter 13 discharge, the wait is six years from the filing date of that case. That six-year bar does not apply if you paid 100 percent of your 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 have to disclose all prior bankruptcy filings in your petition. Filing before the waiting period is up will not stop the case from opening, but the court will deny a discharge on every debt in the new petition.

The 180-Day Refiling Bar

A shorter bar sits on top of the multi-year rules. You cannot file any bankruptcy case for 180 days if your previous case was dismissed for either of these reasons:

The prior case was dismissed because you did not follow the court’s orders or did not appear for hearings.¹
You voluntarily asked to dismiss the prior case after a creditor had already filed a motion to lift the automatic stay, typically to move forward with a foreclosure or repossession.¹

The bar exists to stop repeat filings aimed at triggering the automatic stay, the federal protection that halts lawsuits, wage garnishments, and collection actions the moment a petition is filed.⁹

One More Step After You File

Being eligible to file is not the same as being cleared to receive a discharge. After the petition is on file, individual debtors also have to complete a personal financial management course from a provider approved by the U.S. Trustee’s office. The certificate has to reach the bankruptcy court within 60 days after the first date set for the meeting of creditors, or the court will close the case without granting a discharge.¹⁰ The same exceptions that apply to pre-filing counseling, including disability, incapacity, and active military service in a combat zone, apply here too.

Keep in mind that eligibility only opens the door. Certain debts, including domestic support obligations, most student loans, recent taxes, criminal fines, and debts arising from fraud, survive a Chapter 7 discharge even after you qualify.¹¹ If your biggest debts fall into those categories, passing the eligibility rules may not deliver the relief you are hoping for, and it is worth weighing that 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.C. 727 – Discharge
11
Office of the Law Revision Counsel. 11 U.S. Code 523 – Exceptions to Discharge