Chapter 7 Eligibility Requirements
Determining Your Qualifications for Chapter 7
For questions about Chapter 7 eligibility requirements, contact the bankruptcy lawyers of Weintraub & Selth, APC. Our two lead attorneys have more than 75 years of combined experience in this area of the law and are prepared for even the most challenging bankruptcy cases. We have helped many people who were told by other bankruptcy lawyers they did not qualify for Chapter 7. We have extensive experience helping clients become eligible to file for Chapter 7 bankruptcy. We may be able to help you.
Who Can File for Chapter 7?
When you meet with our bankruptcy attorneys, we will collect essential documents and information from you and listen to the details of your circumstances to help determine your eligibility.
In order to qualify for Chapter 7, you must meet the following requirements:
- You are an individual, married couple, or small business owner
- You must pass the Means Test to show you do not have enough income to repay debts.
- You must not have filed a previous Chapter 7 in the past 8 years, or a previous Chapter 13 in the past 6 years.
- You must not have had a recent Chapter 7 case dismissed in the past 180 days for reasons of fraud, abuse of bankruptcy or court order violation.
- You must complete prebankruptcy credit counseling from an approved agency before filing.
Through our decades of practicing in bankruptcy law, we can help you navigate the requirements to determine whether you are eligible to file Chapter 7 bankruptcy, or if alternatives should be explored.
Do You Pass the Means Test?
The means test requests the bankruptcy court to determine your eligibility for Chapter 7 if your debts are primarily consumer debts.
The means test formula involves:
- Adding six months of your historical gross income and then dividing it by six and then multiplying the answer by 12. The result will be considered your median income.
- Your median income will then be compared to the California median income for a household of your size.
- People with a median income below the California median income for a household of their size may file Chapter 7. However, even people with a median income higher than the median can file Chapter 7 in certain circumstances.
We can administer the means test to determine your eligibility for Chapter 7 bankruptcy. If you do not initially qualify, we may be able to offer suggestions for how you might change your situation in order that you will qualify for Chapter 7 relief. Each case is unique, however. Speaking with an experienced Chapter 7 bankruptcy attorney in Los Angeles before making any decisions is absolutely essential.
Are There Debt Limits for Chapter 7?
There is no debt ceiling for a Chapter 7 bankruptcy. If you qualify for Chapter 7, all of your eligible debts can be discharged no matter how high the debts are.
However, this does not mean that you can simply go on a shopping spree with a credit card prior to filing for bankruptcy in hopes of getting the debt discharged, as that can be an element of fraud or abuse. If the bankruptcy trustee sees this type of spending in your case, your case may be dismissed or you may still be responsible for that debt.
Interested in Filing? Call to Get Started.
Chapter 7 may be attractive if you are seeking to liquidate certain assets to repay debt rather than reorganize your debt as in Chapter 13. All forms of bankruptcy have benefits and drawbacks.
Contact us to discuss the type of bankruptcy that suits your challenges and if you are eligible for Chapter 7 bankruptcy. We will offer a straightforward analysis of your case and provide practical advice that may help you protect certain assets and put an end to your financial challenges over the long term.
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