Do you qualify to file Chapter 7 Bankruptcy?
Evaluate Your Income?
The first phase in figuring out whether you can file for Chapter 7 is to quantify your “current monthly income” against the median income for a family of your size in your state(`you, spouse &kids. Determine your income. Your average income is the total income over the last six months prior to filing. This is what will help you determine if you’re eligible to file Chapter 7. If your income is less than or equal to the median, you most likely qualify to 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.
Do You Have Enough Disposable Income to Repay Some Debts?
The purpose of the means test is to figure out whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to repay at least a portion of your unsecured debts over a five-year repayment period.
Before you meet with an attorney you should do a search online for a free means test calculator to help you determine if you meet the qualifications to repay your debt.
You cannot file for Chapter 7 bankruptcy if you obtained a discharge of your debts in a Chapter 7 case within the last eight years, or a Chapter 13 case within the last six years.
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:
· you violated a court order
· the court ruled that your filing was fraudulent or constituted an abuse of the bankruptcy system, or
· you requested the dismissal after a creditor asked for relief from the automatic stay.
You Defrauded Your Creditors
A bankruptcy court cold dismiss your case if it thinks you have tried to cheat your creditors or concealed assets so you can keep them for yourself. Although you know you never intentionally defrauded your creditors you should be aware of what can appear as trying to defraud. Your cause could look like you tried to defraud and could mean you need to wait for 5- 6 months before filing. This is call bankruptcy planning.
Certain activities are red flags to the courts and trustees. If you have engaged in any of them during the past year, your bankruptcy case may be dismissed. Fraudulent activities could include:
· unloading assets to your friends or relatives to hide them from creditors or from the bankruptcy court
· running up debts for luxury items when you were clearly broke and had no way to pay them off
· concealing property or money from your spouse during a divorce proceeding, or
· lying about your income or debts on a credit application.
