The Baseline: Who Can File for Bankruptcy
Before addressing the specific income and debt requirements for each chapter, there are baseline conditions that apply to all personal bankruptcy filings. Anyone filing must reside in, have a principal place of business in, or own property in the United States. No bankruptcy case may be filed if a prior case was dismissed within the preceding 180 days for certain specified reasons, such as willful failure to comply with court orders. And critically, all individual filers must complete a credit counseling course from a U.S. Trustee Program-approved agency before filing. These requirements apply whether you are considering working with a Chapter 7 bankruptcy attorney or a Chapter 13 bankruptcy attorney each step of the filing process.
Qualifying for Chapter 7: The Means Test
Income Below the Texas Median
The primary eligibility threshold for Chapter 7 is the means test, which compares the filer’s average monthly income to the median income for a Texas household of the same size. The median figures are updated periodically by the U.S. Trustee Program. Filers whose income falls at or below the applicable Texas median generally pass the means test automatically and are eligible to proceed with Chapter 7. For most households facing serious debt pressure in South Texas, income often falls within this range, but the exact figures must be verified at the time of filing because they change regularly.
When Income Exceeds the Median
Higher-earning filers are not automatically disqualified from Chapter 7. A more detailed calculation of allowable expenses, including housing, food, transportation, healthcare, and certain secured debt payments, is applied to determine whether disposable income remains after subtracting those expenses. If the result falls below the threshold set by the means test formula, the filer may still qualify for Chapter 7.
Qualifying for Chapter 13: Income and Debt Limits
Regular Income Requirement
Chapter 13 requires a regular source of income sufficient to fund a court-approved repayment plan. Employment income is the most straightforward qualifying source, but self-employment income, Social Security benefits, pension income, and certain other sources can also qualify. The reliability and stability of the income source matters to the court’s evaluation.
Debt Limits Under Chapter 13
Chapter 13 sets upper limits on the total amount of secured and unsecured debt a filer may carry. These limits are adjusted periodically, and the figures applicable at the time of your filing are the ones that govern eligibility. We verify current debt limit figures from the U.S. Courts website before every case to ensure eligibility is assessed against the correct figures.
Prior Filing Restrictions and Waiting Periods
Prior bankruptcy filings create waiting periods that affect eligibility for future discharges. A Chapter 7 discharge bars a new Chapter 7 discharge for eight years. A prior Chapter 13 discharge bars a Chapter 7 discharge for four years. Other combinations carry their own waiting periods. It is important to distinguish between a prior discharge and a prior dismissal, as dismissals carry different and generally shorter restrictions. If you have filed before, that history is part of the eligibility analysis.
Eligibility Is a Starting Point, Not the Final Answer
Qualifying for a chapter of bankruptcy is the threshold question, not the complete answer. Whether the chapter that you qualify for is the right strategic choice for your specific situation requires a fuller conversation about debt types, assets, income trajectory, and goals. Many people are surprised to find they qualify for options they had already ruled out, or that the chapter they assumed was their only path is not actually the best fit. If you want to understand where you stand, contact bankruptcy attorney in Corpus Christi, TX, Joel Gonzalez at the Law Office of Joel Gonzalez to schedule a free initial consultation. You can also explore the full bankruptcy overview to understand the full range of options available.
