3 Criteria You Have to Meet in Order to File Chapter 7 Bankruptcy

Posted on: 29 August 2017


If you are thinking about filing bankruptcy, you will need to meet particular criteria. If you don't meet those, you may not be able to file for bankruptcy. So, what are some of the tests that you are going to have to go through in order to make sure that you can qualify for Chapter 7 bankruptcy?

Means Test

One of the things that you are going to have to do is go through a means test. For this, you will need to look at your average monthly income for the six months prior to when you file for bankruptcy. That average will be compared to the median income of your state. There are a lot of things that you will need to count as income, including child support, alimony, and disability checks from your state. You don't have include your tax refunds or Social Security retirement payments. If your average income is at or below your particular state's median income, then you have met one of the tests for filing Chapter 7 bankruptcy. 

Previous Bankruptcy

If you have already filed for bankruptcy in the past, you may not be able to file for Chapter 7 right now. How much time has to lapse between the two filings depends on what kind of bankruptcy you filed. The time limit starts from when you filed for the previous bankruptcy. 

Credit Counseling

One of the requirements for a Chapter 7 bankruptcy is that you have undergone some credit counseling. In that counseling, you will learn about things like alternatives to filing for bankruptcy, how to budget better, and different repayment plans.

After you have gone through the process of credit counseling, you will get a certificate stating that you went through the whole process. With that in hand, you can go to file for bankruptcy. You must do this before you file, and you must do it within a certain time period prior to filing for bankruptcy.

That time period is generally 180 days prior to the date you file. However, there are some exceptions to this that you may be able to take advantage of, including being on active military service or having some kind of physical disability that would make it extremely difficult for you to attend counseling.

If you are just so in debt that you can't see any way of getting out of it, then bankruptcy may be a good choice for you. If you want to file for Chapter 7 bankruptcy, contact bankruptcy legal services for more insight on your options and the appropriate timeline for your circumstances.