Why Chapter 7 Bankruptcy may not Work for you

  • David M. Offen,
  •   Chapter 7 Bankruptcy
  •   Comments Off on Why Chapter 7 Bankruptcy may not Work for you

When your financial situation has become too much for you to handle (and not in a good way), you may begin to consider the benefits of Chapter 7 bankruptcy. While this has helped many people dig out of trouble and get their life back on track, it may or may not be the right decision for you.

If the time comes to consider Chapter 7, the first thing you need to do is meet with a qualified bankruptcy attorney who can review your situation and help determine if you are eligible. In the event that you do not qualify for this type of bankruptcy, you will want to turn your attention to Chapter 13.

Here are some of the reasons why you may not qualify for a Chapter 7 filing:

1. You earn enough income to repay your debt. There are criteria in place that dictate who is and is not eligible for Chapter 7 bankruptcy. If you have enough disposable income to fund a Chapter 13 repayment plan, you will not be eligible for Chapter 7.

2. Disposable income to repay debt. The means test helps the court determine your disposable income. Once again, if you have enough money to repay a portion of your unsecured debt through a payment plan, typically lasting anywhere from three to five years, Chapter 7 will not work.

3. Did you receive a bankruptcy discharge in the past? If so, this will impact the future. If you received a Chapter 7 discharge within the last eight years, you are not eligible to file again. For those who received a discharge through Chapter 13 bankruptcy, the time frame for filing again is six years.

4. Have you defrauded your creditors? The court has the right to throw out your case if they believe you have attempted to cheat your creditors. This can include but is not limited to obtaining debt for luxury items that you are unable to pay off, giving away assets to others, hiding assets from the court, or lying about your income and debt.

With eligibility requirements and a variety of challenges that may come up along the way, you should consult with a Chapter 7 bankruptcy attorney as soon as possible. A legal professional can help you decide if this type of filing would work in your favor, allowing you to gain control of your finances once again, if a Chapter 13 Bankruptcy would be a better option, or if another non-bankruptcy option would be the best approach for your situation.

To learn more, please download our free chapter 7 bankruptcy in Philadelphia report here.


To ensure that you are on the right track, choosing the type of bankruptcy filing that is best for you, meet with a local attorney who can steer you in the right direction.
Learn more about Chapter 7 Bankruptcy in Philadelphia in this presentation.

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