Chapter 7 Overview

• Chapter 7 bankruptcy results in a complete discharge of all debt, and Congress has mandated that only people meeting certain income requirements be allowed to file it.
  
  

Income Requirements

• Under federal law, only if your income is equal to, or less than, the median income for a family of your size, in your state, will you be allowed to file for Chapter 7.
  
  

Arizona Median Income

• As of 2009, the current median income for Arizona residents is $57, 620 for a family of two, and $71, 867 for a family of four. Families larger than four can add $6,900 for each additional family member. If your income exceeds those guidelines, you will have to pass the means test in order to file for Chapter 7.
  
  

Means Test

• If your income exceeds the median income for Arizona, you may still be able file for Chapter 7 if you can pass the means test. After deducting reasonable expenses from your income, the court will determine if you can pay at least $100 monthly to creditors. If you can, you do not pass the test and you must consider Chapter 13 instead.
  
  

Chapter 13

• Arizona residents who don't qualify for Chapter 7 can still file for Chapter 13. Under Chapter 13 your debt is consolidated with the intention of allowing you to pay it off over a set period of time.
  
  

Latest Figures

• The median income numbers for Arizona change yearly, so be sure to check the most recent figures before determining whether you can file for Chapter 7 bankruptcy.