Indianapolis residents who have unsecured debts that they cannot pay often look to Chapter 7 bankruptcy as a way to gain a financial fresh start. Although it may seem as if virtually anyone can file for a Chapter 7 bankruptcy, that’s not the case. There are some factors that may make you ineligible to file.
Anyone who has had their bankruptcy case voluntarily dismissed because their secured creditors requested a leave of the court may be ineligible to file once again, especially if it occurred during the past 180 days. Creditors often do this in an attempt to recover collateral.
A person who fails to comply with court orders, appear in court or has a bankruptcy case dismissed may also be prohibited from filing again if less than 180 days have elapsed since such an event occurred.
Anyone filing for bankruptcy must complete credit counseling and submit a certificate of completion to the court before filing for Chapter 7 bankruptcy. Anyone who doesn’t may have their case dismissed.
Individuals wishing to file for Chapter 7 bankruptcy must pass the “means test”. It helps the court determine whether you’re attempting to abuse the system. If you pass it, then the court assumes that you’re in a dire financial situation and unable to pay your bills. If you don’t, then they assume that you have money to cover your expenses, yet you prefer not to. Those who don’t pass the means test may have their case converted to a Chapter 13.
Another factor that may make you ineligible to discharge your debts through Chapter 7 bankruptcy is if you’ve previously filed a case within the past eight years. You may be ineligible to do so if you’ve falsified, destroyed or concealed financial records or property or have transferred assets to someone else.
If you struggle to explain how you’ve lost assets, make false statements or fail to heed court orders, then your case may be dismissed.
Requirements that you must meet to file for Chapter 7 and other types of bankruptcy are ever-evolving. If you aren’t aware of those changing conditions, then you may be unable to file or have your case discharged. An attorney can go over the requirements that you must meet for this type of debt relief and advise you as to whether you qualify to file a case.