Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a type of bankruptcy you can file to clear away certain types of unsecured debts. A trustee is appointed to liquidate non-exempt assets to pay the creditors the applicant is indebted to. After the proceeds from these assets are exhausted, the applicant’s remaining debt is discharged.
It’s recommended only to file for Chapter 7 bankruptcy as a last resort to help you reset your finances. This is because filing for Chapter 7 bankruptcy will have a lasting impact on your creditworthiness.
Am I Eligible for Chapter 7 Bankruptcy?
There are eligibility requirements to file for Chapter 7 bankruptcy. You must have had no Chapter 7 bankruptcy discharged in the last eight years, and you must pass a means test. A means test determines whether you and your family are eligible for government assistance or welfare.
Additional requirements you need to meet to file Chapter 7 bankruptcy include:
- You must complete a group or individual credit counseling course within 180 days before filing. This course must be from an approved credit counseling agency.
- Your average monthly income during the last six months before filing must be less than the median income for the same-sized household in your state.
- You must not have filed for Chapter 13 bankruptcy in the last six years.
If you filed for a Chapter 7 or 13 bankruptcy and your case was dismissed, you need to wait 181 days before trying again. While there’s no guarantee your application will be accepted, an experienced bankruptcy lawyer can help you improve your chances of having your Chapter 7 bankruptcy application approved.
The Law Offices of Samuel Tipton have years of experience in bankruptcy law and can help you navigate the filing process. We’ll help you determine if you meet Chapter 7 bankruptcy requirements and appeal to the court should your application be denied.
If you’re in the process of filing for Chapter 7 bankruptcy, contact us today. You can schedule a free consultation about your bankruptcy case.