Can I file Chapter 7 Bankruptcy? Am I eligible to file Chapter 7 Bankruptcy?
Filing for Chapter 7 bankruptcy takes a lot of thought and consideration. Along with this, there are criteria you must meet in order to move through the filing process. Your income must be under a certain amount, as set by your state, and you are also required to pass the “means test.” Additionally, the court may dismiss your case if you have previously filed for Bankruptcy and received a discharge within a certain amount of time.
Even though two people may be interested in filing Chapter 7 bankruptcy, each one is in a unique situation. Along with this, laws vary from state to state. If you have questions about whether you qualify and how to move forward, it is best to speak with a knowledgeable attorney.
You are in good position to file Chapter 7 bankruptcy if you meet the following requirements:
- You earn less than the median income in your state
- You are able to pass the means test
- You do not have property which is in excess of the allowable exemptions
Here are three points to consider, as each one could hold you back from moving forward with the filing:
1. You earn enough money to repay your debts. If your monthly income is greater than the median income for a family of your size, in your state, you are generally not allowed to file Chapter 7 bankruptcy. However there exceptions to this rule depending on your situation.
2. After paying certain expenses, you have enough money to repay some or all of the debt that is owed to creditors. This is where the means test comes into play. After allowed expenses, the court will decide if you have enough money to repay creditors over the course of a five-year plan. If you do, Chapter 7 bankruptcy is generally out of the question, however, Chapter 13 is still an option.
3. There is a bankruptcy discharge in your recent past. Did you use Chapter 7 bankruptcy to discharge debt within the past eight years? What about a Chapter 13 filing which result in a discharge over the past six years? If the answer to either question is yes, you are not in position to file a Chapter 7 bankruptcy again at this time. You may however be eligible to file Chapter 13.
Although you may feel that Chapter 7 bankruptcy is the right answer for you, based on your financial situation, how you proceed depends on the points above.
A bankruptcy attorney can review your situation, ask you the appropriate questions, and help you decide what to do next. If nothing else, a legal professional can answer the question: can I file Chapter 7 bankruptcy?