Chapter 7 bankruptcy is not available to everyone; there are certain qualifications you must meet in order to be eligible for Chapter 7 relief. Learn more here.
Your Previous Bankruptcy Case Was Dismissed
You cannot file Chapter 7 bankruptcy if during the past 180 days, you had a previous bankruptcy dismissed because you failed to appear in court or because you voluntarily dismissed it yourself after a creditor tried to repossess property.
Previous Bankruptcies May Bar a Chapter 7 Discharge
If you received a discharge in a previous bankruptcy, there is no time limit on filing for Chapter 7 bankruptcy again. However, there are limits on when you can get a discharge. You cannot get a Chapter 7 discharge if:
- during the past eight years, you filed a Chapter 7 case and received a discharge, or
- during the past six years, you filed a Chapter 13 case and received a discharge.
In most cases, it doesn't make sense to file for Chapter 7 bankruptcy if you cannot get a discharge. However, in some situations, it might have some benefits. (To learn more, see Filing for Bankruptcy Multiple Times.)
The Means Test
Most debtors must pass the means test in order to qualify for Chapter 7 bankruptcy. Congress created the means test so that debtors with enough income to repay a certain portion of their debts would have to file a Chapter 13 instead of a Chapter 7.
You can pass the means test in one of two ways:
- Your income is below the median income in your state.
- Your income is above the median income in your state, but when you factor in certain allowed expenses, you don't have enough income to repay your unsecured creditors at least 25% of what you owe them.
There are a few exceptions to the means test. You don't have to pass it if most of your debt is business debt, if you are a disabled veteran, or you are a military reservist or National Guard member who has been on active duty or has participated in homeland defense.
Learn more about eligibility for Chapter 7 in our section on The Means Test and Other Bankruptcy Eligibility Issues.