Bankruptcy and Qualifying for Chapter 7
Filing for bankruptcy can be a trying time in anyone’s life. There are certain assumptions that come along with bankruptcy that most people don’t really want to have to deal with. There are also several laws, regulations, and hoops to jump through that can seem like the system is adding insult to injury. If you happen to be in America, the traditional modes through which you can file for bankruptcy are laid out in Title 11 of the United States code. This particular Title is comprised of nine non-sequential chapters. In large part, most people refer to Title 11 as the “Bankruptcy Code.”
For the most part, if you’re filing for bankruptcy you’re going to use Chapter 7. This is where the term “filing for Chapter 7” comes from. For the most part, Chapter 7 deals with individuals and their property or other assets. You might ask yourself, “Do I qualify for Chapter 7?” There are several criteria that you have to meet in order to qualify for Chapter 7 bankruptcy. The first (and perhaps most obvious) criterion for prohibiting your filing is if you have enough income to adequately repay your debts. A judge will determine whether or not your income is high enough and will dismiss the case if she or he determines it to be too high.
You will also be disqualified from Chapter 7 protection if you have already received a bankruptcy discharge sometime within the previous 8 years. Once you receive a bankruptcy discharge, you must wait at least eight years to seek Chapter 7 protection again. If you’ve filed for bankruptcy and were denied by the court sometime within the previous 180 days, you also do not qualify for Chapter 7. All you have to do is wait out your 180-day waiting period to retry. The major Chapter 7 disqualification that you might encounter is if you’ve ever defrauded your creditors. In this event, you will likely never qualify for bankruptcy protection.
Anyone who doesn’t figuratively check off any of these boxes should be good to go when it comes to filing for Chapter 7. While it is never a fun task, it’s certainly easy if you know your way around bankruptcy law.