The loss of a job, unexpected illness and any other number of factors may contribute to you falling behind on your financial obligations. If faced with overwhelming debt, you may consider debt relief options such as filing for Chapter 7 bankruptcy relief.
To qualify for Chapter 7 bankruptcy relief, you must meet certain eligibility requirements.
Means test
According to the U.S. Courts, in order to file for Chapter 7 bankruptcy, your current monthly income must fall below the state median or you must qualify through the application of a means test. The means test assesses the legitimacy of your filing. If found abusive, your claim for bankruptcy protection may get converted to a Chapter 13 case or it may get dismissed altogether.
Prior filings
Prior bankruptcy filings may also affect your eligibility for Chapter 7 relief. You may not petition for bankruptcy if you had another filing dismissed within the previous 180 days as a result of your intentional failure to comply with the court orders or to appear before the court. Additionally, voluntarily dismissing another filing within the previous 180 days after your creditors took action through the court to recover property put up as collateral for debts.
Credit counseling
In order to qualify for Chapter 7 bankruptcy relief, you must also meet the credit-counseling requirement. Within 180 days of your filing, the bankruptcy code requires you to complete credit counseling with an approved agency. You may fulfill this requirement individually or as part of a group. Should you develop a debt management plan during this required counseling, you must file it with the court.
