How do you know if you are eligible to file for Chapter 7 bankruptcy? There are a few criteria you must fit, including a specific income amount, your results from a “means test,” whether you have recently filed for bankruptcy and whether a court believes you are lying to creditors. Here’s a short breakdown of the ways that your specific financial situation can prevent you from filing for Chapter 7:
- Income: If you have enough to repay your debts in a timely fashion, you are not eligible for Chapter 7 bankruptcy. Instead, Chapter 13 bankruptcy would be your route forward. The rule that determines eligibility is one that measures your current monthly income against the median income for a family of your size in your state. If your income is less than or equal to the median, you are likely eligible for Chapter 7.
- If your income is more than the media, you must pass the “means test.” See our page on the “means test” for more information.
- Other bankruptcies: if you have obtained a discharge of your debts through Chapter 7 in the past eight years, or Chapter 13 in the past six years, you cannot file for Chapter 7.
- Previous bankruptcy dismissed: If you have had a Chapter 7 or Chapter 13 bankruptcy filing dismissed in the last 180 days, you are not eligible for Chapter 7.
- Lying to creditors: if a bankruptcy court thinks that you have tried to cheat your creditors or conceal assets from them, your case could be dismissed.
As always, if you are considering filing for bankruptcy and are unsure if it is right for you, you can discuss your finances in a free consultation with our bankruptcy law firm.