Who Can File for Chapter 7 Bankruptcy?

Filing for Chapter 7 bankruptcy can be a powerful tool for dealing with overwhelming debt. But it isn’t available to everyone. Here are some situations in which you will not be allowed to file for Chapter 7.

How high is Your Income?
Under the new rules, the first step in figuring out whether you can file for Chapter 7 is to measure your “current monthly income” against the median income for a family of your size in your state. Your “current monthly income” is your average income over the last six months before you file. If your income is less than or equal to the median, you can file for Chapter 7.

If your income is more than the median, however, you must pass “the means test” — another requirement of the new law — in order to file for Chapter 7.The mean test was made so you can figure out whatever you have enough disposable income (after subtraction the allowed expenses) to repay at least a portion of your unsecured debts over a 5 years period.

Did You Previously Received a Bankruptcy Discharge
If you received a Chapter 7 discharge in the last eight years, or a Chapter 13 within the last six years you are not eligible for chapter 7 bankruptcy.

A Previous Bankruptcy Was Dismissed Within the Previous 180 Days
You cannot file for Chapter 7 bankruptcy if a previous Chapter 7 or Chapter 13 case was dismissed within the past 180 days because:
1. you violated a court order
2. the court ruled that your filing was fraudulent or constituted an abuse of the bankruptcy system, or
3. you requested the dismissal after a creditor asked for relief from the automatic stay.

You Cheat Your Creditors
A bankruptcy court may discharge your case if they think you have cheat or try to cheat your creditors or you hidden assets so you can keep them for yourself.

There are things you can do that are not allowed by the courts or trustees. If you have do one of these tings in the past year your bankruptcy case may be dismissed.
These actions are:
1. hidden assets from your creditors
2. having debts for luxury items when is clear that you don’t have a chance to pay for them
3. lying about your income or debts on a credit application

You also need to sing the bankruptcy paper under the penalty of perjury. That means you can be prosecuted for fraud if you are lying in the official papers.

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