Chapter 7 Eligibility in Phoenix

The Means Test in Arizona

The means test compares your household income to the Arizona median. If your income is below the median, you automatically qualify for Chapter 7. The current Arizona median income for a single person is $56,381.

Below median: You qualify for Chapter 7 automatically
Above median: You must complete the full means test (Form 122A-2), which subtracts allowed expenses from your income. If disposable income is low enough, you still qualify.
Arizona has flat 2.5% state income tax, which affects the means test calculation -- Arizona residents keep more take-home pay but that higher take-home pay is what the means test measures

Take the means test at our Phoenix means test page or visit bankruptcymeanstest.org for a detailed explanation.

Other Eligibility Requirements

You Must

Complete credit counseling within 180 days before filing
Not have received a Chapter 7 discharge within the past 8 years
Not have received a Chapter 13 discharge within the past 6 years
Not have had a case dismissed for abuse within 180 days
File tax returns for the past 4 years

Disqualifying Factors

Income above the means test threshold with no allowable deductions
Prior discharge within the time bar period
Prior case dismissed within 180 days for willful failure to comply
Attempting to defraud creditors (hiding assets, recent luxury spending)
Failure to complete required credit counseling

Arizona Exemptions That Protect Your Property

Filing Chapter 7 does not mean you lose everything. Arizona exemptions protect:

Homestead: $250,000
Vehicle: $6,000 per vehicle ($12,000 if disabled)
Retirement accounts: IRAs, 401(k)s, and pensions are fully exempt under federal and Arizona law
Personal property: Clothing, household furnishings, and tools of the trade up to Arizona limits

See our full Phoenix exemptions guide for complete details.

Frequently Asked Questions

What is the income limit for Chapter 7 in Phoenix?

The means test uses Arizona median income: $56,381 for a single person. If below this, you qualify automatically. If above, you may still qualify after subtracting allowed expenses.

How often can I file Chapter 7 in Arizona?

You must wait 8 years from a prior Chapter 7 discharge, or 6 years from a prior Chapter 13 discharge. Check your eligibility with the 1328(f) screener.

Do I have to pass the means test?

Yes, unless you are a disabled veteran or your debts are primarily business debts. All consumer debtors must complete the means test form even if they qualify automatically.

Can I file Chapter 7 if I own a home?

Yes. Arizona's $250,000 homestead exemption protects your home equity. If your equity exceeds the exemption, Chapter 13 may be a better option.

What happens to my car in Chapter 7 in Arizona?

Arizona exempts $6,000 per vehicle ($12,000 if disabled). If your equity is within this limit, you keep your vehicle. If you owe more than the car is worth, you can reaffirm or surrender.

How long does Chapter 7 take?

Most Chapter 7 cases in the District of Arizona take 3-4 months from filing to discharge. The 341 meeting occurs about 30-40 days after filing.