How Much Debt Do I Need To File for Chapter 7 Bankruptcy?
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There’s no minimum or maximum debt required to file Chapter 7 bankruptcy — eligibility is based on your financial situation. However, for Chapter 13, your total debts must be less than $2,750,000, according to U.S. Courts.
Written by Mae Koppes. Legally reviewed by Attorney Andrea Wimmer
Updated February 25, 2025
How Much Debt Do You Have To Have To File Bankruptcy?
There is no debt minimum or debt limit for filing Chapter 7 bankruptcy. Federal bankruptcy law doesn’t specify a minimum or maximum amount for personal Chapter 7 cases. The average Upsolve user has $48,000 in debt, but some users have much more or much less. You must have at least $10,000 in unsecured debt to be eligible to use Upsolve’s free filing tool.
What’s the Debt Limit for Chapter 13 Bankruptcy?
There is a maximum amount for Chapter 13 cases, which are less common than Chapter 7. To file Chapter 13, your total debts must be less than $2,750,000, according to uscourts.gov. This includes secured debts like a home or car and unsecured debts like credit card debt and medical bills.
Who’s Eligible To File Chapter 7 Bankruptcy?
There’s no minimum amount of debt you need to file Chapter 7 bankruptcy, but there are a few eligibility requirements you must meet to qualify.
Most importantly, Chapter 7 has income limits. To ensure you’re eligible to file, you must pass a means test, which compares your income to the median income for a household of your size in your state. If your income is lower, you pass. If it’s higher, you’ll move on to the next step, which looks at your expenses and disposable income.
You’ll also need to take two short courses: one on credit counseling before you file and another on financial management after you file. The first course is required before you can submit your bankruptcy paperwork, and the second one must be completed before the court will erase your debts.
Once your case is filed, you’ll have a meeting with your bankruptcy trustee, who may ask you to provide additional documents.
Finally, there are limits on how often you can file. If you’ve already filed for Chapter 7 bankruptcy in the last eight years, you’ll need to wait before filing again.
How To Decide if Chapter 7 Bankruptcy Is Right for You
Since Chapter 7 doesn’t have a debt limit, you might be wondering how to decide if bankruptcy is the right choice for you. Everyone’s financial situation is different, but here are a few key factors to consider:
Your ability to pay your debts: If you’re struggling to make minimum payments, regularly dealing with debt collectors, or relying on credit cards to cover basic expenses, bankruptcy can help you get a fresh start. Plus, as soon as you file, you get the benefit of the automatic stay, which stops all collections actions, from phone calls and lawsuits to wage garnishment and bank levies.
The types of debt you have: Chapter 7 can erase unsecured debts like credit cards, medical bills, and personal loans. But it won’t eliminate certain debts, such as child support, alimony, most student loans, and recent tax debts.
The risk of losing property: Some assets, like a home or car, could be affected by bankruptcy depending on your state’s exemption laws. If you have valuable property, it’s a good idea to look into what you can protect.
The impact on your credit: Bankruptcy will stay on your credit report for up to 10 years, but many people see their credit scores start to recover within a year or two after filing. If your credit is already low due to missed payments or high debt, bankruptcy may actually help you rebuild faster.
Your intuition: If bankruptcy doesn’t feel like the right fit, you might consider debt settlement, credit counseling, or negotiating directly with creditors. We discuss other debt relief options below.
If you aren’t sure what the next best step is, you can take Upsolve’s free screener to learn more about your options. Upsolve can also connect you with an NFCC-accredited nonprofit credit counseling agency for a free consultation.
In the meantime, here’s some more information to help you better understand bankruptcy.
Are Your Debts Eligible for Discharge Under Chapter 7?
Not all debts are treated the same in bankruptcy. There are two main types to consider: unsecured debts and secured debts. Unsecured debts like credit card bills are usually wiped out in bankruptcy. Secured debts like a mortgage or car loan are a bit more complicated.
Unsecured Debts
Unsecured debts are debts like credit cards, medical bills, personal loans, payday loans, and past-due utility bills. These are debts that aren’t tied to any property.
If you don’t pay these debts, creditors can’t typically take anything from you. But they can send the debt to collections or sue you to get a court order to garnish your wages.
Chapter 7 bankruptcy wipes out most unsecured debts, which makes it a powerful tool for getting a financial reset.
There’s no minimum or maximum amount of unsecured debt required to file, but the timing of when you took on the debt matters. If you recently used credit cards for large purchases, took out a cash advance, or otherwise increased your debt just before filing, the Bankruptcy Court may question whether you acted in good faith.
If a creditor objects, that debt might not be discharged.
Secured Debts
Secured debts, like mortgages and car loans, work differently because they’re backed by collateral. If you stop making payments, the lender has the right to take back the property.
Filing Chapter 7 can erase your personal obligation to pay the debt, but it won’t automatically stop repossession or foreclosure unless you bring your loan current. This means paying all past-due amounts, including late fees or penalties.
If you want to keep a secured asset, you’ll need to continue making payments or explore options like reaffirming the loan (agreeing to keep the debt and stay on the hook for payments) or redeeming the asset (paying its fair market value in a lump sum).
If you’re behind on a mortgage or car loan and want to catch up, Chapter 7 may not be the best fit. Instead, Chapter 13 bankruptcy could help you restructure your debt and keep your property.
What Debts Can’t Be Erased in Chapter 7?
Although Chapter 7 can erase many debts, there are some non-dischargeable debts under bankruptcy law. These include:
Child support and alimony
Most student loans (except some federal loans in cases of extreme hardship)
Recent tax debts
Court-ordered fines and criminal restitution
Debts from fraud or willful misconduct
Also, if you rack up debt right before filing — especially for luxury items or cash advances — creditors may challenge the bankruptcy discharge. If the court agrees, you’ll still be responsible for paying that debt.
When To Consider Filing Chapter 13 Instead
Chapter 7 works well for people with mostly unsecured debts and limited income. But if you don’t qualify because your monthly income is too high or if you need to catch up on past-due mortgage or car loan payments, Chapter 13 might be the better choice.
Chapter 13 reorganizes your debts into a 3–5-year repayment plan, allowing you to gradually pay off what you owe while keeping important assets like your home or car. It can also help if you have debts that Chapter 7 won’t erase, like certain tax debts or past-due child support.
However, Chapter 13 has its own eligibility rules. To qualify, you must have enough disposable income to make regular payments, and your total debts must be below the Chapter 13 debt limits set by federal law.
Since Chapter 13 requires a payment plan and takes up to five years, most filers hire a bankruptcy lawyer to help with their case. Upsolve can help you schedule a free consultation with a bankruptcy attorney near you.
Alternatives to Bankruptcy
If bankruptcy doesn’t feel like the right option, you might consider other ways to manage debt:
Debt management plans: A nonprofit credit counseling agency can help negotiate lower interest rates and set up a structured repayment plan for unsecured debts. This won’t reduce the total amount you owe, but it can make payments more manageable.
Debt consolidation: Combining multiple debts into one loan with a lower interest rate can simplify repayment and reduce monthly payments. Many people do this with credit card balances or student loans.
Debt settlement: Some creditors may accept a lump-sum payment for less than what you owe. This can help eliminate debt faster, but it may hurt your credit score and lead to tax consequences.
The best option depends on your financial situation, the type of debt you have, and your long-term goals. If you’re unsure what to do next, Upsolve’s free screener can help you explore your options. You can also connect with a nonprofit credit counselor for a free consultation to discuss your situation.
Let’s Summarize…
Federal bankruptcy law doesn’t require you to have a minimum amount of debt to file bankruptcy, but there are other conditions. If you meet Chapter 7 eligibility requirements, you qualify to file a bankruptcy case and get a fresh start. If you have a simple Chapter 7 case, you may be eligible to use Upsolve’s free filing tool. If you want help understanding your other debt relief options, you can take our quick debt screener for personalized guidance.
