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What are the legal requirements for Chapter 7 bankruptcy?

On Behalf of | Apr 15, 2024 | Chapter 7

A Chapter 7 bankruptcy gives you a second chance to set your financial affairs in order and obtain relief from overwhelming debt. However, to qualify for Chapter 7 bankruptcy discharge, you must meet certain requirements.

The requirements are set to help ensure only deserving individuals who genuinely cannot afford to repay their debts are granted the opportunity for a fresh start through Chapter 7 bankruptcy. 

Am I eligible for Chapter 7 bankruptcy?

To be considered for a Chapter 7 discharge, you may need to fulfill the following requirements:

  • Pass the means test: Your income must be below the median income for your state or demonstrate that your disposable income is insufficient to repay your debts.
  • Mandatory credit counseling: You must take a credit counseling course from any approved agency within six months before applying for bankruptcy.
  • No recent bankruptcy discharges: You must not have received a successful Chapter 7 discharge within eight years or a Chapter 13 discharge within six years.
  • Honest disclosure: Provide complete and accurate information about your assets, debts, income and expenses in your bankruptcy petition and related documents.
  • Attend the meeting of creditors: Participate in a session with your creditors and the bankruptcy trustee to discuss your financial situation.
  • Follow court requirements: Adhere to all court orders and requirements throughout the bankruptcy process.
  • Have not committed bankruptcy fraud: Avoid engaging in any fraudulent activities related to your bankruptcy filing, including hiding assets or providing false information.

Am I guaranteed a Chapter 7 discharge?

Even after meeting all the requirements, your eligibility for a Chapter 7 discharge is not guaranteed. The court will review your case thoroughly to ensure compliance with bankruptcy laws and assess whether granting you a discharge is appropriate.

As such, consider seeking legal guidance to better understand the Chapter 7 bankruptcy process and help ensure that you fulfill all requirements accurately and effectively present your case to the court.