The question everyone asks first
When debt gets bad enough that bankruptcy is on the table, the first worry is almost always the same: "Will they even let me file Chapter 7?"
It's worth worrying about, because Chapter 7 is the version of bankruptcy everybody wants. It erases most unsecured debts — credit cards, medical bills, personal loans, old utility bills, even most lawsuits — and it does it in roughly 90 days. No payment plan. No five years of court supervision. Debt gone, fresh start.
Congress did add income limits in 2005, to keep Chapter 7 for people who truly can't pay what they owe. But here's what more than 20 years of Arizona bankruptcy practice has taught me: those limits are far more forgiving than people expect, and most people who need Chapter 7 pass.
Here's how the test actually works.
Three boxes to check
Qualifying for Chapter 7 in Arizona comes down to:
- The means test — an income screen, explained below.
- A credit counseling course, completed before you file.
- Enough time since any prior bankruptcy — no Chapter 7 discharge in the past 8 years, and no Chapter 13 discharge in the past 6.
The means test causes all the anxiety, so let's take it apart.
Step one of the means test: compare your income to Arizona's median
The first check is blunt: is your household's income below the median for an Arizona household your size? If yes, you pass. Done. No second test, no expense worksheets.
The medians come from the U.S. Department of Justice, and they refresh every April 1 and November 1. The Arizona figures effective April 1, 2026 are:
- Household of 1: $73,935 per year
- Household of 2: $89,027 per year
- Household of 3: $104,965 per year
- Household of 4: $121,174 per year
- Each person beyond 4: add $11,100 per year
Because these numbers move every six months, check the U.S. Trustee's current figures right before you file — not the ones from an article you read months ago (including this one).
Now, the trap hiding in the word "income." For the means test, income means your average gross household income over the six months before filing, doubled to make an annual number. It is not the income on your last tax return. People miscalculate this constantly — and it cuts both ways, sometimes helping and sometimes hurting.
Step two: over the median? You're not out yet
Landing above the median doesn't kill your case. It just triggers the long-form means test calculation, which subtracts a substantial list of allowed expenses from your income to find your true "disposable income." The allowed categories include:
- Housing — rent or mortgage, within IRS standards
- Food, clothing, and household supplies
- Health insurance and out-of-pocket medical costs
- Owning and operating your vehicles
- Childcare and child support
- Taxes withheld from your pay
- Payments on retirement account loans
- Anything a court has ordered you to pay
If what's left after those deductions is small enough, you qualify — median or no median. I've filed successful Chapter 7 cases for Arizonans with six-figure incomes. The test isn't your salary. It's the arithmetic underneath it.
The household-size question
Notice that every extra household member raises your income limit by $11,100 a year. So who counts?
Generally:
- You, plus a spouse you live with or file with
- Your dependent children
- Anyone else you support financially as a dependent
- Sometimes adult kids, parents, or other relatives living under your roof
"Sometimes" is doing real work in that last line. Blended families, adult children at home, spouses who are separated — the counting rules get genuinely murky, and getting it right can decide whether you pass step one.
The rest of the checklist
The two courses
Before filing, you take a credit counseling course from an approved provider — about an hour, $10–$50, usually online. After filing, a second course ("debtor education") is required before your debts are discharged. Neither is hard; both are mandatory.
The waiting periods
Prior bankruptcies block a new Chapter 7 for a while:
- A Chapter 7 discharge within the past 8 years — you must wait.
- A Chapter 13 discharge within the past 6 years — you must wait.
Inside one of those windows? Chapter 13 may still be open to you, and a few narrow exceptions exist.
Tell the truth about everything
A bankruptcy case is a federal court proceeding, and it runs on full disclosure:
- Every asset — bank accounts, vehicles, retirement accounts, jewelry, electronics, all of it
- Every debt
- Every source of income
- Every property transfer within the past 1–4 years
Here's the pattern I've seen over and over: honest cases with messy facts work out fine. The disasters are the cases where someone hid an asset, quietly deeded property to a relative, or left income off the forms. A genuine problem can almost always be planned around before filing. A lie can't be unwound after.
Ruled out of Chapter 7? Chapter 13 isn't a punishment
When the means test math doesn't work, Chapter 13 is the usual answer: a 3-to-5-year repayment plan where you keep your property, cure missed mortgage or car payments, and discharge the remaining unsecured debt when the plan ends.
For someone with steady income and things worth protecting, Chapter 13 frequently beats Chapter 7 on the merits. Different tool, different job — not second place.
Four real-world profiles
From my Arizona practice, here's how qualification tends to shake out:
- A single parent with two kids earning $45,000, buried in credit cards — passes easily.
- A couple bringing in $95,000 with three dependents and heavy medical bills — under the median, passes.
- A professional who just got laid off — the six-month averaging makes their income look low, so they often pass despite a high former salary.
- Two earners with no kids at $130,000 and ordinary expenses — Chapter 7 may be out of reach, but Chapter 13 is right there.
Patterns, not promises. Your numbers are your numbers, and the only real answer comes from running them.
Actually finding out
Two routes:
- An online means test calculator gives you a ballpark — but the free ones routinely miss the very deductions that flip a borderline case.
- A bankruptcy attorney can run the full analysis. With this many moving parts — household size, what counts as income, which expense standards apply — a single wrong assumption changes the outcome.
However you check, check. The stress you're carrying has an exit, and finding out whether Chapter 7 is yours takes one afternoon of honest math.
