When Can Someone Declare Chapter 7 Bankruptcy?


Quick Answer

An individual can file for Chapter 7 bankruptcy if his income is not over a certain amount and he passes the "means test," according to Nolo. If the individual has filed a previous bankruptcy within a certain period of time, the court is likely to dismiss the bankruptcy case.

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When Can Someone Declare Chapter 7 Bankruptcy?
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Full Answer

If a filer's income is more than the median income in his residential state, the court may want to look at how much disposable income the filer has left after paying his "allowed" monthly expenses, such as food and rent, says FindLaw. The court is going to determine if the applicant has enough money to pay some of his unsecured creditors by filing a Chapter 13 bankruptcy petition instead. If the applicant has a certain amount of money left over to pay some of his unsecured creditors, then the court dismisses the current Chapter 7 bankruptcy filing.

As of 2015, if an applicant discharged a debt under Chapter 7 within the past eight years of his application to file again, or had a debt discharged under a Chapter 13 bankruptcy within the past six years, the applicant is ineligible for Chapter 7. The time begins on the date that the applicant filed for the previous bankruptcy, according to FindLaw.

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