Chapter 7 bankruptcy allows people to erase their debt. But since Chapter 7 bankruptcy allows you to erase your debt, there are some restrictions. In order to file for bankruptcy, you may have to meet some requirements.
Who Is Disqualified From Filing Chapter 7 Bankruptcy?
There are some scenarios where you can’t file for bankruptcy. For instance, you can’t file for Chapter 7 bankruptcy if:
- You make too much money. If you earn more than a certain amount, you won’t be able to file for Chapter 7 bankruptcy; however, in this case you can still file for bankruptcy through Chapter 13.
- You defrauded creditors. You can’t file for bankruptcy if you did things to defraud creditors. This includes hiding money, abusing credit, or not meaning to ever pay back your debts.
- You recently filed for bankruptcy. If you filed for bankruptcy recently, you won’t be able to file for Chapter 7 bankruptcy again, at least for a period of time.
- You had a bankruptcy dismissed six months ago or sooner. If you recently filed for Chapter 7 or Chapter 13 bankruptcy, but that bankruptcy proceeding was dismissed in the preceding six months, you can’t file for bankruptcy again.
Eligibility for Chapter 7 Bankruptcy
If you meet the requirements above, there are some things that you have to do if you want to file for bankruptcy. For instance:
- You must complete pre-bankruptcy credit counseling. If you want to file Chapter 7 bankruptcy, you must complete pre-bankruptcy credit counseling within six months of filing for bankruptcy.
- You have to pass the means test. The means test compares your income with others’ to see if you qualify for bankruptcy.