Quick Answer
To file bankruptcy you must: (1) reside in, have property in, or do business in the United States, (2) complete credit counseling within 180 days before filing, (3) pass the means test for Chapter 7 (if above-median income), and (4) not be subject to a filing bar under Section 109(g). Prior discharges may bar a new discharge under Section 1328(f).
Basic Eligibility: Who Can File (11 U.S.C. § 109)
Section 109 of the Bankruptcy Code establishes who is eligible to be a debtor:
- Section 109(a) -- General eligibility: Any "person" who resides in, has a domicile in, has a place of business in, or has property in the United States may file. "Person" includes individuals, partnerships, and corporations.
- Section 109(b) -- Chapter 7: All persons eligible under 109(a) can file Chapter 7, with limited exceptions (railroads, certain financial institutions). Individuals with above-median income must pass the means test.
- Section 109(e) -- Chapter 13: Only individuals (not corporations or partnerships) with regular income, and with noncontingent, liquidated unsecured debts less than approximately $2.75 million and secured debts less than approximately $2.75 million (these amounts adjust periodically).
- Section 109(h) -- Credit counseling: All individual debtors must complete credit counseling from an approved provider within 180 days before filing. No exceptions except in exigent circumstances (with court approval) or if no approved provider is available in the district.
The Means Test (11 U.S.C. § 707(b))
The means test determines whether an individual debtor qualifies for Chapter 7 or must file Chapter 13 instead. It was added by BAPCPA in 2005 to prevent perceived abuse of Chapter 7 by higher-income debtors.
How it works
- Compare your income to the state median. If your current monthly income (averaged over the 6 months before filing) is at or below the median income for your state and household size, you pass. No further calculation needed.
- If above median, calculate disposable income. Deduct allowed expenses (some based on actual spending, others based on IRS standards) from your income. If the result shows you have enough disposable income to pay a meaningful amount to unsecured creditors over 60 months, the court may presume abuse and dismiss or convert your case.
The means test form is Official Form 122A-1 (Chapter 7) or 122C-1 (Chapter 13). See meanstest.org for a detailed breakdown.
Exceptions to the means test: The means test does not apply to disabled veterans whose debts were incurred primarily while on active duty or performing homeland defense activities (11 U.S.C. § 707(b)(2)(D)), or to debtors whose debts are primarily business debts rather than consumer debts.
Credit Counseling Requirement (11 U.S.C. § 109(h))
BAPCPA requires two separate courses:
- Pre-filing credit counseling: Must be completed within 180 days before the petition is filed. Takes 60-90 minutes. Covers budgeting, debt management options, and alternatives to bankruptcy. You receive a certificate that must be filed with your petition.
- Post-filing debtor education: Must be completed before discharge can be entered. Takes approximately 2 hours. Covers personal financial management topics. A different certificate is filed with the court.
Both courses must be from a provider approved by the U.S. Trustee Program. Approved providers are listed at the Department of Justice website. Cost: typically $15-$50 per course. Available online, by phone, or in person.
Failure to complete credit counseling is grounds for dismissal. If you file without a valid credit counseling certificate, the court will likely dismiss your case. There is a narrow exception for "exigent circumstances" under Section 109(h)(3), but you must file a certification describing the emergency and complete the course within 30 days.
Filing Bars: When You Cannot File (11 U.S.C. § 109(g))
Section 109(g) creates a 180-day filing bar in two situations:
- Willful failure to obey court orders or appear: If your prior case was dismissed because you willfully failed to obey a court order or failed to appear before the court as required.
- Voluntary dismissal after stay relief motion: If you voluntarily dismissed your prior case after a creditor filed a motion for relief from the automatic stay.
The 180-day bar means you literally cannot file a new bankruptcy petition during that period. See 109g.org for a detailed guide.
Discharge Bars: When You Cannot Get a Discharge
Even if you can file, you may not be able to receive a discharge if you have filed before. The timing rules depend on the chapters involved:
| Prior Discharge | New Case | Waiting Period | Statute |
|---|---|---|---|
| Chapter 7 | Chapter 7 | 8 years | 11 U.S.C. § 727(a)(8) |
| Chapter 7 | Chapter 13 | 4 years | 11 U.S.C. § 1328(f)(1) |
| Chapter 13 | Chapter 7 | 6 years* | 11 U.S.C. § 727(a)(9) |
| Chapter 13 | Chapter 13 | 2 years | 11 U.S.C. § 1328(f)(2) |
| Chapter 11 | Chapter 13 | 4 years | 11 U.S.C. § 1328(f)(1) |
| Chapter 12 | Chapter 13 | 4 years | 11 U.S.C. § 1328(f)(1) |
*The 6-year bar for Chapter 13-to-Chapter 7 does not apply if the debtor paid 100% of allowed unsecured claims in the prior Chapter 13, or paid at least 70% and the plan was proposed in good faith with best effort.
Use the free screening tool at 1328f.com to check whether a discharge bar applies to your situation.
Automatic Stay Limitations for Repeat Filers
If you have had a prior bankruptcy case dismissed within the past year, the automatic stay in your new case may be limited:
- One prior dismissal (Section 362(c)(3)): The stay automatically terminates 30 days after the new filing unless you file a motion to extend it, demonstrating good faith.
- Two or more prior dismissals (Section 362(c)(4)): No automatic stay at all. You must file a motion asking the court to impose the stay.
See serialfiler.org for detailed information about stay limits for repeat filers.
Frequently Asked Questions
What are the rules for filing bankruptcy?
You must reside in or have property in the U.S., complete credit counseling within 180 days before filing, pass the means test for Chapter 7 (if above-median income), and not be subject to a filing bar under Section 109(g). Prior discharges may bar a new discharge under Section 1328(f) or 727(a)(8).
Who is eligible to file bankruptcy?
Any person who resides in, has property in, or does business in the United States. For Chapter 13, you must be an individual with regular income and debts below certain limits. Corporations and LLCs cannot file Chapter 13.
What is the means test for bankruptcy?
The means test under Section 707(b) compares your income to the state median. If you are above median, it calculates your disposable income after allowed deductions. If you have enough disposable income to fund a Chapter 13 plan, Chapter 7 may be denied.
What is the 109(g) filing bar?
Under Section 109(g), you cannot file for 180 days if your prior case was dismissed for willful failure to obey court orders or if you voluntarily dismissed after a stay relief motion was filed.
What is the Section 1328(f) discharge bar?
Section 1328(f) bars a Chapter 13 discharge if you received a prior discharge within 4 years (Chapter 7/11/12) or 2 years (Chapter 13). Check at 1328f.com.