Determining Eligibility for Chapter 7 Bankruptcy

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The Coyle Law Group LLC

Columbia, MD

Are you interested in filing for Chapter 7 bankruptcy? While this may be a decision you want to make, you cannot move forward until you determine your eligibility. Even though you may be interested in this type of filing, you have to meet certain requirements before you do anything.

Chapter 7 bankruptcy starts with the means test. In short, this determines whether your income is low enough to file. It was created to keep people with higher incomes from taking advantage of the benefits associated with Chapter 7.

Note: if you take the means test and find that you are not eligible for Chapter 7 bankruptcy, you can still consider Chapter 13.

Many people believe they have to be completely broke in order to file for Chapter 7, however, nothing could be further from the truth. For example, you could earn a solid income but have many expenses, such as car loans and a mortgage, that have put you in a difficult position.

Along with an income that is too high, there are other reasons why you may not be eligible to file for Chapter 7. These reasons include:

�You are in position to repay some of your debt.

�Previous bankruptcy discharge. If you filed Chapter 7 within the last eight years or Chapter 13 within the last six, you are not eligible to file.

�A previous bankruptcy case was dismissed by the court within the past 180 days.

�You neglected to meet all credit counseling requirements. You are required to complete credit counseling a minimum of 180 days before filing for bankruptcy.

�You defrauded creditors. If you attempted to defraud creditors in any way, such as transferring assets to friends or family, the court has the right to throw out your case.

There are many benefits of filing for Chapter 7 bankruptcy. If you find that you are eligible to file, it may be time to learn more about the process and to make a final decision as to what you should do next.

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