To qualify for Chapter 13 bankruptcy, you need three things: regular income, debts below specific dollar limits, and up-to-date tax filings for the past four years. Chapter 13 lets you keep your property while repaying some or all of your debts over three to five years through a court-approved plan. Here’s what each requirement looks like in practice.
You Must Have Regular Income
Chapter 13 is sometimes called a “wage earner’s plan,” but the income requirement is broader than that name suggests. You need a regular, predictable source of money sufficient to make monthly payments under a repayment plan. Wages from a traditional job qualify, but so does self-employment income, Social Security benefits, disability payments, pension income, rental income, or even regular financial support from a spouse or family member. The key word is “regular.” If your income is sporadic or unpredictable, the court may decide you can’t reliably fund a repayment plan and deny your petition.
Your income level also determines how long your repayment plan will last. If your current monthly income falls below the median income for a household your size in your state, you’ll be placed on a three-year plan (though the court can approve a longer period for cause). If your income is above the state median, the plan generally must run for five years. No plan can exceed five years regardless of circumstances.
Your Debts Must Fall Below Set Limits
Chapter 13 has a two-part debt ceiling. Your unsecured debts (credit cards, medical bills, personal loans) cannot exceed $465,275, and your secured debts (mortgages, car loans, other debts backed by collateral) cannot exceed $1,395,875. If your debts exceed either of these limits, you won’t qualify for Chapter 13 and would need to look at other options like Chapter 11, which has no debt cap but is significantly more complex and expensive to file.
When calculating these figures, include all of your debts, not just the ones you plan to address in the bankruptcy. Joint debts count toward your total if you’re personally liable. If you’re close to either threshold, you’ll want to carefully tally every obligation before filing.
Tax Returns Must Be Current
You must have filed all required federal, state, and local tax returns for tax periods ending within four years of your bankruptcy filing date. This is a hard requirement, not a suggestion. If you’re missing returns from any of those years, the court can dismiss your case. If you have unfiled returns, get them filed before you submit your bankruptcy petition. The IRS specifically lists this as an eligibility requirement for Chapter 13.
Tax debts themselves don’t disqualify you from filing. In fact, Chapter 13 can be a useful way to catch up on back taxes through the repayment plan. But the returns need to be on file first.
Pre-Filing Credit Counseling Is Required
Before you can file your Chapter 13 petition, you must complete a credit counseling course from an agency approved by the U.S. Trustee Program. This is a separate requirement from simply qualifying, but your case will be thrown out if you skip it. The counseling session typically covers your financial situation, alternatives to bankruptcy, and a preliminary budget plan. Most approved agencies offer the course online or by phone, and it usually takes about an hour.
Only agencies on the U.S. Trustee’s approved list can issue the certificate you’ll need. You can find the list on the U.S. Department of Justice website. After filing but before receiving your discharge, you’ll also need to complete a separate debtor education course from an approved provider.
Who Cannot File Chapter 13
Beyond the income, debt, and tax requirements, a few other situations can disqualify you. If you received a Chapter 7 discharge within the past four years, or a Chapter 13 discharge within the past two years, you’re ineligible. If you had a previous bankruptcy case dismissed within the past 180 days because you violated a court order or voluntarily dismissed after a creditor sought relief, you’ll also be blocked from filing.
Businesses cannot file Chapter 13. Only individuals (or married couples filing jointly) are eligible. If you operate a sole proprietorship, you can include those business debts in a personal Chapter 13 filing, but corporations and partnerships must use other bankruptcy chapters.
How the Means Test Applies
The means test is most commonly associated with Chapter 7, where it determines whether your income is low enough to qualify. For Chapter 13, the means test works differently. It doesn’t block you from filing. Instead, it determines how much of your disposable income must go toward repaying creditors and whether your plan lasts three or five years.
The calculation starts with your average monthly income over the six months before filing. From that figure, the court subtracts allowed expenses for housing, transportation, food, and other necessities (using a combination of IRS standards and your actual costs). What’s left is your “disposable income,” and that amount must go to your creditors each month for the duration of your plan. If you earn below your state’s median income for your household size, the three-year minimum applies. Above the median, you commit to five years of payments.
What the Filing Process Looks Like
Once you’ve confirmed you meet the eligibility requirements, the process moves in a predictable sequence. You complete credit counseling, then file your petition along with schedules listing all your income, expenses, assets, and debts. You’ll also file a proposed repayment plan showing how you intend to pay creditors over the plan period.
Within about 30 to 45 days of filing, you’ll attend a meeting of creditors (called a 341 meeting) where the bankruptcy trustee and any creditors who choose to attend can ask questions about your finances. Shortly after, you’ll have a confirmation hearing where the court decides whether to approve your plan. Once confirmed, you make payments to the trustee each month, who distributes the money to your creditors. You must begin making payments within 30 days of filing, even before the plan is officially confirmed.
Filing fees for Chapter 13 are $313 as set by the federal courts, though you can request to pay in installments. Attorney fees vary widely but typically range from $2,500 to $6,000 depending on the complexity of your case and where you live.