Do I Qualify for Chapter 7 of Chapter 13 Bankruptcy?
There are different financial rules for Chapter 7 and Chapter 13 bankruptcy. This article explains the basic limits, so you can see which option might be available to you.
Chapter 7: Based on Your Income
Chapter 7 helps erase most types of debt, but it’s only available if your income is low enough to qualify.
To see if you qualify, the court uses something called the means test. The test compares your income to the median income for a household your size in Oregon. This means that half of households earn more than that amount, and half earn less.
- If your income is below the limit, you pass the test and can file for Chapter 7.
- If your income is above the limit, you may still qualify — but you’ll need to show that you don’t have money left over after paying basic living costs.
How it works:
- Add up your total income from the last 6 full months (not including the month you’re filing).
- Multiply that number by 2 to get your annual income.
- Compare your annual income to the Oregon median for your household size. You can find the most recent income limits on this U.S. Trustee Means Testing website.
If your income is too high, you might not qualify for Chapter 7 — but Chapter 13 may still be an option.
You can try this means test calculator to see if you qualify.
Chapter 13: Based on Your Total Debt
There's no income limit for Chapter 13, but there is a limit on how much debt you can have.
The current limits are:
- Unsecured debt like credit cards, medical bills, and personal loans: under $465,275.
- Secured debt like mortgages, car loans, or other loans with collateral: under $1,580,125
To qualify, you must also:
- Be up to date with credit counseling (within 180 days before filing)
- Not have had a previous bankruptcy dismissed in the last 180 days for certain reasons (like not following court orders)
Summary
Qualifying for Chapter 7 is based on your income and qualifying for Chapter 13 based on how much debt you have.
If you’re not sure which one fits your situation, talk to a legal aid lawyer or credit counselor. They can help you figure out your next step.
You can also go back to this guide to learn more about bankruptcy.