Bankruptcy Eligibility and the Means Test: How This Area Is Organised

What does "eligibility" actually cover in bankruptcy?

Three different questions travel under the same word, and confusing them is where most of the anxiety comes from.

The first is who may be a debtor at all. Under 11 U.S.C. § 109, a person who resides, is domiciled, has a place of business, or has property in the United States may be a debtor, with specific exclusions for railroads, banks, insurance companies and similar institutions. Nothing there turns on your income.

The second is chapter-specific screening. For Chapter 7, that is the means test in 11 U.S.C. § 707(b), which applies to an individual debtor whose debts are primarily consumer debts and asks whether granting relief would be an abuse of the chapter. For Chapter 13, it is a different set of questions about income regularity and whether a plan works.

The third is procedural: credit counseling, the required forms and disclosures, and prior-filing timing. Those are conditions on filing rather than tests of who you are.

• Who may be a debtor at all — 11 U.S.C. § 109
• Chapter 7 abuse screening — the means test under 11 U.S.C. § 707(b)
• Chapter 13's own requirements — regular income and a workable plan
• Procedural prerequisites — counseling, forms, timing after a prior case

How do I know which of these questions applies to me?

Start with what is actually happening in your life, not with a chapter name.

If your debts are primarily consumer debts and you are considering Chapter 7, the means test is the question in front of you. Consumer debts are defined in 11 U.S.C. § 101(8) as incurred by an individual primarily for a personal, family, or household purpose. If your debts are primarily business debts, the § 707(b) means test framework does not reach your case in the same way.

If you have a house you want to keep and are behind on payments, the more relevant question is usually whether a Chapter 13 plan is feasible for you, not whether you pass a Chapter 7 screen. A Chapter 13 plan may provide for curing a default under 11 U.S.C. § 1322(b).

If you filed before, timing rules come first and can change what is available now. Work out which situation is yours, then read the guide for that one.

What do all of these paths have in common?

More than the differences suggest.

Every individual case runs on the same disclosure obligations. Under 11 U.S.C. § 521, a debtor files a list of creditors, schedules of assets and liabilities, a schedule of current income and expenditures, a statement of financial affairs, copies of payment advices received within 60 days before the petition, and a statement of monthly net income. Every case creates an estate under 11 U.S.C. § 541. Every individual case requires accurate, truthful information — 11 U.S.C. § 527 requires debt relief agencies to say so in writing, and courts warn that information provided may be audited.

Every consumer case also uses the same income concept. Current monthly income is the average monthly income from all sources over the six-month period ending on the last day of the calendar month before filing (U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter). That single figure feeds both the Chapter 7 and Chapter 13 forms.

• The same schedules and statements under 11 U.S.C. § 521
• The same six-month current monthly income lookback
• The same accuracy obligation, backed by the possibility of audit
• Court staff cannot give legal advice in any chapter (Bankr. D. Mass. official page — FAQs for Debtors)

Where do the chapters actually diverge?

The sharpest divergence is what happens after the income figure is calculated.

In Chapter 7, an individual filer completes Official Form 122A-1 to determine current monthly income and compare it to the median income for their state. If income is not above that median, the second form is not required. If it is above, Official Form 122A-2 deducts living expenses and payments on certain debts to determine any amount available for unsecured creditors (Bankr. S.D. Iowa official guidance — Instructions).

In Chapter 13, Forms 122C-1 and 122C-2 do related work but toward a different end: they set the commitment period for payments and help establish how much goes to creditors. Chapter 13 is a repayment plan for individuals with regular income; Chapter 7 involves non-exempt property being used to pay creditors.

Costs differ too. Chapter 7 carries a $245 filing fee, a $78 administrative fee, and a $15 trustee surcharge. Chapter 13's filing fee is $235 with a $78 administrative fee.

Does any of this change depending on my state?

The eligibility framework itself is federal and does not change from state to state. Section 109, section 707(b) and the official forms are the same everywhere.

Two things do vary. The median income figure your current monthly income is compared against is set by state and household size, so the same salary can sit above the line in one state and below it in another. And what property you can keep depends on exemptions, which are largely a matter of state law.

A few districts have local variations worth knowing about. Cases filed in Alabama or North Carolina use an administrative expense multiplier published separately by the Judiciary (U.S. Bankr. Ct. D. Ariz., Instructions). Local rules and local forms also apply in every district alongside the federal ones.

We publish the state-specific figures on the state pages rather than restating them here, because a stale number on a hub page is worse than no number.

• Federal and identical everywhere: who may be a debtor, the means test structure, the official forms
• Varies by state: median income comparison figures, property exemptions
• Varies by district: local rules, local forms, and some filing procedures

Where should I start if I only have ten minutes?

Start by naming your situation rather than picking a chapter.

Write down roughly what you earn, who lives in your household, what you own outright, what you owe and to whom, and whether anything urgent is happening — a garnishment, a foreclosure date, a repossession notice. That is the same information the schedules under 11 U.S.C. § 521 will eventually ask for, so none of it is wasted.

Then read the one guide that matches the question actually blocking you. If you are worried about income, read the median comparison guide. If you are worried about keeping a house, read the Chapter 13 feasibility guide. If you filed before, read the prior-filing timing guide first, because it can change everything downstream.

Courts across districts are consistent on one point: bankruptcy proceedings are complex, court staff cannot give legal advice, and the chances of completing the process are much greater with an attorney, especially in Chapter 13 (Bankr. E.D. Mich. official guidance — A Guide for Pro Se Filers).

• Gather income, household size, property, debts, and any urgent deadline
• Read the one guide matching your blocking question, not all fourteen
• Check whether a prior filing changes your timing before anything else
• Local rules apply alongside the federal ones — find your district

Frequently asked questions

Does a high income disqualify me from bankruptcy entirely?

No. Nothing in 11 U.S.C. § 109 conditions eligibility on income for an individual. Income matters at a later stage: the means test under 11 U.S.C. § 707(b) asks whether a Chapter 7 filing by someone with primarily consumer debts would be an abuse of that chapter. Filers above the median complete an additional calculation, and Chapter 13 remains a separate path.

Do I have to take the means test if my debts are business debts?

The § 707(b) framework is directed at an individual debtor whose debts are primarily consumer debts. Consumer debts are defined in 11 U.S.C. § 101(8) as incurred by an individual primarily for a personal, family, or household purpose. Whether your debts are primarily consumer debts is a fact question about your particular mix of obligations, and it is worth getting right early.

What happens if I am above my state's median income?

You complete a second form. Official Form 122A-2 deducts living expenses and payments on certain debts from your income to determine any amount available to pay unsecured creditors. Depending on the result, the U.S. trustee, bankruptcy administrator, or creditors may file a motion to dismiss under § 707(b), and the court decides (Bankr. S.D. Iowa official guidance — Instructions).

Is a prior bankruptcy filing a bar to filing again?

It is a timing question rather than a permanent bar, and it affects more than eligibility. One court's pro se guide notes that if you had a prior case pending that was dismissed within the previous 12 months, the automatic stay is operative for only 30 days, and does not go into effect at all if you had two such cases (Bankr. E.D. Mich. official guidance). Read the prior-filing guide before anything else.

How much does it cost to file?

Chapter 7 currently carries a $245 filing fee, a $78 administrative fee, and a $15 trustee surcharge. Chapter 13 carries a $235 filing fee plus the same $78 administrative fee. The statute permits installment payment for an individual commencing a voluntary or joint case, and courts publish separate applications for installments and, for Chapter 7, fee waiver.

Can the bankruptcy court tell me whether I am eligible?

No. Court clerks and staff are prohibited from giving legal advice, including advising which chapter to file or whether your debts can be discharged (Pro Se Guide, D. Neb.). Court publications say the same thing repeatedly. They can point you to forms and local rules; the eligibility judgment itself comes from you, with an attorney or legal aid organisation if you can reach one.

Sources

• 11 U.S.C. § 109 — Who may be a debtor · official source
• 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
• 11 U.S.C. § 101 — Definitions · official source
• 11 U.S.C. § 521 — Debtor's duties · official source
• 11 U.S.C. § 527 — Disclosures · official source
• 11 U.S.C. § 541 — Property of the estate · official source
• 11 U.S.C. § 1322 — Contents of plan · official source
• 28 U.S.C. § 1930(a)(1)(A), (f)(1) — Bankruptcy filing fees — Chapter 7
• 28 U.S.C. § 1930(a)(1)(B) — Bankruptcy filing fees — Chapter 13
• Bankruptcy Court Miscellaneous Fee Schedule, Item 8 — Administrative fee
• Bankruptcy Court Miscellaneous Fee Schedule, Item 9 — Chapter 7 trustee surcharge
• Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals
• Bankr. E.D. Mich. official guidance — A Guide for Pro Se Filers
• U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
• U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements
• Bankr. D. Mass. official page — FAQs for Debtors
• Pro Se Guide — U.S. Bankruptcy Court, District of Nebraska — Pro Se Guide
• Bankr. S.D. Ill. official page — Debtor FAQs

Related

• The means test, explained
• Chapter 7
• Chapter 13
• Build your personalised roadmap
• Find your local bankruptcy court
• Exemptions: what they protect