Step 1: Qualifying to File Chapter 7 Bankruptcy

The Chapter 7 Bankruptcy Means Test

Qualification for Chapter 7 bankruptcy is the first step to filing this type of bankruptcy.
In order to figure out if you qualify to file Chapter 7 bankruptcy, you must go through the steps of the Chapter 7 means test.


If you remember the media hype about the Chapter 7 bankruptcy means test disqualifying lots of people who wanted to file for Chapter 7 bankruptcy when it first went into effect in 2005, you should know the facts.

The truth is that more than 96 percent of potential Chapter 7 petitioners do qualify–and in the event that you’re one of those few who don’t, you may still be able to file bankruptcy under Chapter 13 bankruptcy.

What is the Chapter 7 Means Test?

The Chapter 7 means test is a two-step process.

You start with a state median income comparison, which compares your monthly income to the median income of a family that is the same size as yours in your state.

If your monthly income is at or below the median income, you qualify for Chapter 7 bankruptcy.

If your income is higher than the median income it doesn’t mean that you can’t file for Chapter 7 bankruptcy, but you have to complete the second step of the Chapter 7 bankruptcy means test.

The second step of the Chapter 7 means test involves calculating disposable income and unsecured debts.

According to the test, if your disposable income over the next five years is less than $6,000 ($100/month), you likely “pass” the Chapter 7 bankruptcy means test and qualify to file Chapter 7 bankruptcy.

A local bankruptcy attorney can help you understand which part of your income is disposable for the calculation.

If your disposable income during that five year period is greater than $6,000 but less than $10,000, you may still be able to file for Chapter 7, depending upon your allowed expenses. Talk to a Chapter 7 bankruptcy attorney about your options today.

Filing Chapter 7 Bankruptcy Steps

File Chapter 7 bankruptcy to get the protection of the automatic stay. Chapter 7 bankruptcy can eliminate credit card debt and stop creditor harassment.

The above summary is not legal advice ~ Laws may have changed since our last update. For the latest information on bankruptcy laws, speak to a local Chapter 7 bankruptcy lawyer in your state.