Can you file for Chapter 7 bankruptcy? Let’s find out.

April 19, 2017 Mark

On behalf of Gregersen Law posted in blog on Wednesday, April 19, 2017.

Your financial situation got out of control. The uncertainty of your future could make you struggle to find a solution. Like many other Utah residents, you may have cut your expenses and tried to negotiate with your creditors. Unfortunately, that didn't stop their relentless pursuit of payment through phone calls, emails and letters.

You tried other options, but now you feel as though your best option involves filing for Chapter 7 bankruptcy. Your next question may be whether you qualify. This article explores the requirements for filing.

The means test

Every state has a median income depending on the size of your family. If your income falls below that median, you may file Chapter 7. If your income exceeds that amount, the test then turns to your debts. More than half of your debts must be consumer debts, and your disposable income cannot indicate that you could pay your bills.

Your status

In order to file for a consumer Chapter 7 bankruptcy, you must be one of the following:

  • An individual
  • A married person filing jointly
  • A sole proprietor personally responsible for some business debts
  • Half of a partnership with personal liability for its debts

If you fall into other business categories, you must file a business Chapter 7 bankruptcy.

Discharge in a recent bankruptcy

If you filed Chapter 7 bankruptcy within the last eight years and received a discharge, you cannot file at this time. You may also not file if you received a Chapter 13 discharge within the last six years.

Dismissal of a recent bankruptcy

If the bankruptcy court denied you a discharge and dismissed another Chapter 7 bankruptcy within the last 180 days for any of the following reasons, you cannot file yet:

  • Requested a dismissal due to a creditor's request to lift the automatic stay
  • Fraudulently filed for bankruptcy
  • Abused the bankruptcy system
  • Violated an order of the court

If any of these situations applies to you, it might be possible to refile at some point in the future.

Credit counseling

The court requires that you participate in a financial management course within 180 days before your discharge. Failure to complete the course could cause you a denial of your discharge, result in the dismissal of your bankruptcy and jeopardize your financial future.

Legal help

The bankruptcy process provides you numerous benefits, but ensuring your success and a fresh financial start comes with challenges. Understanding the requirements of the court, fulfilling them and doing the amount of paperwork needed can create a considerable amount of frustration and stress. You could benefit from using the services of an attorney who can help alleviate those burdens and provide you with a way to relieve your financial burdens.