If you’re drowning in debt and considering bankruptcy, the first question you’re probably asking is: “Do I even qualify for Chapter 7?”
It’s a fair question. Chapter 7 is the fastest, cleanest form of bankruptcy. It wipes out most unsecured debts — credit cards, medical bills, personal loans, old utility bills, even most lawsuits — usually in about 90 days. No repayment plan, no five-year commitment. Just a fresh start.
But not everyone qualifies. Congress put income limits in place in 2005 to make sure Chapter 7 is reserved for people who genuinely can’t pay their debts.
The good news? Most people who feel like they need Chapter 7 actually qualify for it. I’ve been practicing bankruptcy law in Arizona for over 20 years, and the income limits are higher than most people assume.
Let me walk you through exactly how it works.
The Three Things You Need to Qualify
To file Chapter 7 in Arizona, you need to clear three hurdles:
- Pass the means test (the income test).
- Complete a credit counseling course before filing.
- Not have filed a previous Chapter 7 in the last 8 years (or Chapter 13 in the last 6 years).
The means test is the one most people worry about, so let’s start there.
What Are the Income Limits to Qualify for Chapter 7 in Arizona (2026)?
Here’s the simplest version: if your household income is below the Arizona median for your household size, you automatically qualify for Chapter 7. No further analysis needed.
Median income figures are published by the U.S. Department of Justice and updated twice a year (April 1 and November 1). The current Arizona median income limits for Chapter 7, effective April 1, 2026, are:
- 1-person household: $73,935/year
- 2-person household: $89,027/year
- 3-person household: $104,965/year
- 4-person household: $121,174/year
- Each additional person: add $11,100/year
These numbers shift every six months, so when you actually file, we’ll pull the current figures from the U.S. Trustee’s office to make sure your case is using the right numbers. You can also run our free Chapter 7 means test calculator to see where you stand right now.
Important: “Income” here means your average gross household income over the last six months, multiplied by two to get an annual figure. It is not your tax return income. This is one of the most common places people get tripped up.
What If My Income Is Above the Median?
Don’t panic. Being above the median doesn’t disqualify you — it just means we have to do a second, more detailed test.
This second step is called the means test calculation, and it lets you subtract a long list of allowed expenses from your income to figure out your “disposable income.” Allowed expenses include:
- Rent or mortgage (subject to IRS standards)
- Food, clothing, and household supplies
- Health insurance and out-of-pocket medical costs
- Vehicle ownership and operating costs
- Childcare and child support
- Tax withholding
- Retirement loan repayments
- Court-ordered payments
After all those deductions, if your remaining “disposable income” is low enough, you still qualify for Chapter 7 even though you’re above the median.
I’ve successfully filed Chapter 7 cases for Arizonans earning well into six figures. Income alone doesn’t disqualify you. The math does.
Who Counts as Part of My Household?
This matters a lot, because adding a person to your household raises your income limit by roughly $9,900.
For means test purposes, your household generally includes:
- You and your spouse (if filing jointly or living together)
- Dependent children
- Other dependents you support financially
- In some cases, adult children, parents, or relatives living in the home
The rules around who counts are not always intuitive — especially for blended families, adult children living at home, or separated spouses. This is one of the things we sort out during a free consultation.
Other Requirements Beyond Income
Passing the income test is the biggest hurdle, but there are a few other rules to know about.
Credit Counseling
Before you can file, you have to complete a credit counseling course from an approved provider. It takes about an hour, costs $10–$50, and can usually be done online. After you file, there’s a second course (a “debtor education” course) you’ll complete before your discharge.
Previous Bankruptcy Filings
You can’t file Chapter 7 if:
- You received a Chapter 7 discharge within the last 8 years, or
- You received a Chapter 13 discharge within the last 6 years.
If you’re inside those windows, Chapter 13 may still be an option — and there are some narrow exceptions worth discussing.
The Honesty Requirement
Bankruptcy is a federal court proceeding. The court expects full, honest disclosure of:
- All your assets (including bank accounts, vehicles, retirement accounts, jewelry, electronics)
- All your debts
- All your income sources
- All transfers of property in the last 1–4 years
The vast majority of Chapter 7 cases run smoothly. The cases that go badly are almost always cases where someone tried to hide assets, transfer property to family right before filing, or omit income. Don’t do that. We can almost always work around legitimate concerns; we cannot fix dishonesty.
What If I Don’t Qualify for Chapter 7?
If the means test rules you out, Chapter 13 is usually the next option. Chapter 13 is a 3-to-5-year repayment plan that lets you keep your property, catch up on missed mortgage or car payments, and discharge whatever’s left of your unsecured debt at the end.
For people with regular income and assets they want to protect, Chapter 13 is often a better tool than Chapter 7 anyway. It’s not a consolation prize — it’s a different solution for a different situation.
A Realistic Picture of Who Qualifies
In my practice in Arizona, here’s what qualifying for Chapter 7 typically looks like:
- The single parent earning $45,000 with two kids, drowning in credit card debt → qualifies easily.
- The couple earning $95,000 combined with three dependents and high medical bills → qualifies under the median.
- The recently laid-off professional whose six-month average income looks low even though their salary was high → often qualifies.
- The dual-income household earning $130,000 with no kids and no extraordinary expenses → may not qualify for Chapter 7, but Chapter 13 is on the table.
These are just patterns. Your situation is its own thing, and the only way to know for sure is to actually run your numbers.
How to Find Out If You Qualify
There are two ways to do this:
- Use an online means test calculator. These can give you a rough estimate, but they often miss the deductions that matter most.
- Talk to a bankruptcy attorney for a free consultation. This is what I’d recommend — and not just because it’s what I do. The means test has a lot of moving parts, and one wrong assumption (about household size, about what counts as income, about a specific expense category) can change the answer.
If you’d like me to run your numbers personally, I offer free, no-pressure consultations for Arizonans considering bankruptcy. You’ll walk away knowing — concretely — whether you qualify and what your options look like.
You don’t have to live with this stress. There’s almost always a way out, and figuring out whether Chapter 7 is the right path is the first step.