Many Pennsylvanians ask a simple question: Do I qualify for Chapter 7 bankruptcy?
Eligibility hinges on income, debt type, and available exemptions—not just on how overdue the bills are.
A Chapter 7 bankruptcy lawyer in Philadelphia reviews your six-month income average, allowable expenses, and property protections to see whether you meet federal standards. This early review helps avoid filing errors, delays, or a forced conversion to Chapter 13.
Understanding the Chapter 7 bankruptcy exceptions Pennsylvania residents must consider is also essential, since some debts and assets may not qualify for full discharge under state or federal rules
Working with an experienced bankruptcy attorney in Philadelphia ensures that every requirement—from the means test to exemption planning—is met before the petition is filed.
The Means Test Explained
Chapter 7 relief is reserved for individuals who truly cannot repay unsecured debts. The “means test” is how the court checks that requirement.
Step 1 – Compare income to Pennsylvania’s median.
Your household’s average income over the past six months is measured against the state median for your family size. If it falls below the median, you generally pass.
Step 2 – Calculate disposable income.
If income is higher, a second review subtracts allowed expenses—such as housing, transportation, and certain taxes—based on IRS standards. The figure that remains is your disposable income.
If that number is too high, the court presumes you have the means to repay creditors under Chapter 13. If it is negative or minimal, you may still qualify for Chapter 7.
Many debtors find the process technical. As one filer put it, “Depending on what qualifies, you might have a couple hundred a month left or negative a hundred.” That uncertainty is why a Chapter 7 bankruptcy attorney or experienced Chapter 7 lawyer is essential. They know how to document expenses correctly and avoid mistakes that can lead to dismissal or conversion of the case under Chapter 7 bankruptcy exceptions Pennsylvania.
Pennsylvania Means Test Income Thresholds (Updated 2025)
Step one of the means test is simple in concept: take your household’s average gross income for the last six months, annualize it, and compare it to Pennsylvania’s median for your family size. If you’re under, you generally clear step one. If you’re over, you proceed to the expense analysis as outlined in Chapter 7 bankruptcy exceptions Pennsylvania.
Current Pennsylvania medians for cases filed in 2025
(annualized amounts)
| Household Size | Annual Median Income |
|---|---|
| 1 person | $67,676 |
| 2 people | $83,249 |
| 3 people | $103,856 |
| 4 people | $125,754 |
| Each additional person | +≈$9,900 |
A few practical notes:
These figures are updated during the year. Even a modest shift—or a slight change in your income—can move you across the line.
“Below median” usually means you pass step one; “above median” doesn’t end the analysis. It triggers the second stage, where allowable expenses reduce income to determine disposable dollars.
Timing matters. If your pay fluctuates, filing after a lower-income month can lawfully change the calculation.
A seasoned Chapter 7 bankruptcy lawyer will verify the applicable table for your filing date, confirm household size (including dependents), reconcile pay stubs and benefits, and advise on filing timing when you’re close to a cutoff.
Exceptions to the Means Test – Chapter 7 Bankruptcy Exceptions Pennsylvania
Not everyone must complete the full means test. Federal law carves out narrow categories:
Business-debt cases
When more than half of the total debt is tied to business or trade obligations, the income comparison step is usually unnecessary. The court will still review financial schedules to verify the mix of debts.
Disabled veterans
Veterans whose debts arose primarily during active duty or homeland defense can claim an exemption. Service-related pay is excluded from the income calculation.
National Guard and reservists
Members called to active duty for at least 90 days receive a temporary waiver that extends 540 days beyond their service period.
Even when an exemption applies, the court still examines income and expense schedules to confirm accuracy and good faith. An experienced chapter 7 bankruptcy attorney can determine if one of these rules fits your situation and gather the documentation the trustee will expect.
Exemptions & Asset Considerations
Qualifying under the means test does not automatically protect all property. Only assets that fit within statutory exemptions are shielded under Chapter 7 bankruptcy exceptions Pennsylvania.
Choosing state or federal exemptions
Pennsylvania exemptions are narrow, offering roughly a $300 wildcard and no state homestead protection. Most Chapter 7 filers instead elect the federal system, which currently protects about $27,900 of home equity, around $5,025 of vehicle equity, and specific amounts for household goods, retirement accounts, and personal effects.
Equity beyond the limits
Any value above those allowances can be used to repay creditors. A residence with substantial unprotected equity, for example, may be sold by the trustee even when the means test is met.
Legal guidance
A seasoned Chapter 7 bankruptcy lawyer can examine deeds, loan balances, and market values, then apply the most protective exemption strategy permitted by law.
Other Eligibility Rules & Common Pitfalls
Meeting the means test is only the starting point. Chapter 7 also carries several procedural requirements.
Credit counseling
An approved counseling session must be completed within 180 days before filing. The certificate is filed with the petition, and missing it can halt the case.
Prior bankruptcies
A discharge under Chapter 7 in the past eight years, or certain Chapter 13 discharges within six, can prevent a new filing until the waiting period ends.
Risky transactions
Moving property to relatives, making unusual payments to favored creditors, or taking on new unsecured debt just before filing can draw objections or even allegations of fraud.
Learn more about filing for bankruptcy in Philadelphia and avoid common mistakes.
Ready to See if You Qualify? Here’s Your Next Step
Passing the Chapter 7 means test is only part of the process. Chapter 7 bankruptcy attorneys help you to get a real answer that comes from a full review of your income, debts, and assets. A qualified Chapter 7 attorney can confirm eligibility and ensure your property is protected.
Contact Philadelphia Low-Cost Bankruptcy Lawyers to take the first step toward lasting relief and same-day filing.