Chapter 7 bankruptcy can provide for a financial fresh start to those who use its power to rid themselves of creditors harassment and headaches – but not everyone is eligible to file for Chapter 7 bankruptcy protection. The following requirements must be met in order to file a Chapter 7 bankruptcy:
- Within the last 180 days you completed a credit counseling course on the internet, on the phone, or in person from a counseling agency approved by the Court;
- The state in which you are filing must have been your place of residence for the previous 90 days. If you have not resided in the state for 90 days then you may file in the state where the majority of your assets have been located for the last 180 days or where your principal of business is located;
- You have not had a previous bankruptcy dismissed within the last 180 days for (1) failure to appear before the court of failure to obey court orders, or (2) voluntary dismissal after a creditor requested relief from the stay;
- Not having a discharge in a Chapter 7 bankruptcy which was filed within the last 8 years;
- Not have received a discharge in a Chapter 13 filed within the last 6 years. This does not apply if you paid 70% or more to unsecured creditors in your Chapter 13 Plan;
- Average monthly income over the last 6 months is less than the median for your county OR the average monthly income over the last 6 months minus allowable expenses is not enough to pay one quarter of your debt over the next 5 years;
- Not be an insurance company, financial institution, nor a railroad.
The requirements for who can and cannot file for Chapter 7 bankruptcy protection are found in the federal bankruptcy code. Failing to meet one or more of the requirements does not necessarily mean that you cannot receive bankruptcy protection, it may mean that you have to file a petition under another Chapter of the Code.
