The 2025 Arizona Means Test: Is Bankruptcy Right for You?

In 2025, Arizona updated its income limits, which could affect whether you qualify for Chapter 7 bankruptcy. Don’t worry—this blog breaks it down and helps you understand your options under every significant chapter of bankruptcy.

The means test helps determine if you qualify for Chapter 7 bankruptcy, eliminating most unsecured debts, such as credit card bills and medical expenses.

It compares your income to the average income for Arizona households of your size. If your income is below that number, you likely qualify. If it’s higher, the court will examine your expenses to see if you qualify.

Arizona raised its income limits this year. That’s good news—more people may now qualify for Chapter 7.

Here’s a quick overview:

You’ll likely pass the means test automatically if your income is below these numbers.

You still have options.

If your income is higher than the limit, you can subtract things like:

What’s left is your disposable income. If that number is low, you may still qualify for Chapter 7.

If not, other bankruptcy chapters might be a better fit.

This is the most common option for individuals. It erases most debts and usually takes just a few months. You might have to give up some non-essential property, but many people keep everything they own.

If you earn too much for Chapter 7, Chapter 13 lets you repay part of your debt over 3–5 years. You keep your property and catch up on missed payments like mortgage or car loans.

This chapter is mainly for businesses, but individuals with high debt can also use it. In it, you create a plan to reorganize and pay back your creditors while keeping your business or assets running.

If you run a farm or fishery, Chapter 12 gives flexible repayment options tailored to your business. It’s quicker and easier than Chapter 11 and helps keep your operations going.

Arizona’s new income limits mean more people may qualify for Chapter 7. That’s a big deal—especially if you’re dealing with job loss, medical debt, or rising living costs.

Even if Chapter 7 isn’t the right fit, Chapter 13 or another chapter might be the perfect solution.

Bankruptcy laws can be confusing, and small mistakes can lead to delays or denial. That’s why it helps to have a trusted legal team on your side.

 

At Wesbrooks Law, we guide Arizona residents through every part of the bankruptcy process. We’ll help you understand the means test, choose the right chapter, and confidently move forward.

This blog is intended for informational purposes only and should not be considered legal advice. Bankruptcy laws, including the Arizona Means Test, change frequently, and the details shared here may not reflect the most current legal standards. Every financial situation is unique, and decisions about bankruptcy should be made in consultation with a qualified attorney. To get personalized guidance, please reach out to a licensed bankruptcy lawyer in your area. Reading this blog does not create an attorney-client relationship.