Who Qualifies for Chapter 7 Bankruptcy?

Most people who need Chapter 7 bankruptcy relief qualify for it. The eligibility rules are designed to target those who genuinely cannot repay their debts, while directing higher-income individuals toward Chapter 13. Here's what the law requires.

1. Pass the Means Test

The means test is the primary eligibility hurdle for Chapter 7. It compares your average monthly income over the past 6 months to your state's median income for a household of your size.

If your income is at or below the median: You qualify automatically. No further calculation is required.

If your income is above the median: You must complete a second calculation that subtracts IRS-allowed expenses from your income. If your remaining disposable income is below a threshold set by law, you still qualify. If it's above the threshold, there's a presumption that Chapter 7 would be an abuse of the system, and you may need to file Chapter 13 instead.

Even if your income is higher than the median, many people pass the second calculation because of high housing costs, car payments, or other allowed expenses.

2. Meet the Timing Requirements

You cannot file Chapter 7 too soon after a previous bankruptcy:

• Previous Chapter 7 discharge: You must wait 8 years from the prior Chapter 7 filing date before filing again.
• Previous Chapter 13 discharge: You must wait 4 years from the prior Chapter 13 filing date.
• Previously dismissed case: If your prior case was dismissed (not discharged), there may be a 180-day waiting period under certain circumstances.

3. No Prior Dismissal for Failure to Comply

If a bankruptcy court dismissed your previous case because you failed to appear, failed to comply with court orders, or voluntarily dismissed it after creditors filed for relief from the automatic stay, you may face a temporary bar on filing again.

4. Complete Credit Counseling

Within the 180 days before filing, you must complete an approved credit counseling course. This is typically a 1-2 hour online or phone course that reviews your financial situation and alternatives to bankruptcy. Learn more about the credit counseling requirement.

After your case is filed, you must also complete a debtor education course before your discharge is issued.

5. No Primarily Business Debts Limitation

The means test applies only if most of your debts are consumer debts. If your debts are primarily from business operations, the means test does not apply and you may file Chapter 7 regardless of income.

Who Should Consider Chapter 7?

Chapter 7 is generally a good fit if you:

• Have income at or below your state's median
• Have mostly unsecured debt (credit cards, medical bills, personal loans)
• Don't have significant non-exempt assets you want to protect
• Need relief quickly (Chapter 7 discharges in 3–6 months vs. 3–5 years for Chapter 13)

Easy-Case's Free Screener

Before you spend time on paperwork, use Easy-Case's free, anonymous screener to find out if Chapter 7 is likely available to you. You'll answer questions about your income, household size, and state — and receive an immediate eligibility estimate. No account required.

Compare Chapter 7 and Chapter 13 if you want to understand which option better fits your situation.