Law Office of Ginger C. Cord, PSC
Free Initial Consultation
859-963-2073

What are the qualifications for Chapter 7 bankruptcy?

For those struggling with extreme debt, Chapter 7 bankruptcy can be a valuable tool to obtain a fresh start. Not everyone qualifies for Chapter 7, however, and it doesn't cancel, or discharge, all types of debt.

In general, Chapter 7 bankruptcy is a total liquidation of a debtor's consumer debt, rather than debt from taxes, business losses or torts. During the process, property will be sold to pay off debts. If you have no property to sell or your debts exceed the value of property, much of this debt can still be discharged at the end of the bankruptcy process.

To qualify for Chapter 7 bankruptcy, you must:

  • Pass the bankruptcy means test - This test compares your monthly income to Kentucky's median requirements for you as an individual or a family the size of yours. If your income exceeds the requirements, you may not be eligible for Chapter 7 bankruptcy.
  • Be an individual, married couple or small business owner - Corporations, LLCs and partnerships are ineligible for Chapter 7.
  • Not have a recently discharged bankruptcy - You cannot file for Chapter 7 bankruptcy if you have had a previous Chapter 7 discharge within the last 8 years or a Chapter 13 discharge within the last 6 years.
  • Not have a recent bankruptcy dismissal - You cannot file for Chapter 7 bankruptcy if a previous Chapter 7 or Chapter 13 case was dismissed within the last 180 days because you violated a court order, made a fraudulent bankruptcy filing, abused the bankruptcy system or requested a dismissal after a creditor asked the court to lift the automatic stay.
  • Attend credit counseling - Within the 180 days prior to filing for Chapter 7, you must participate in credit counseling. This must be done with a nonprofit agency that is approved by the U.S. Trustee's office.

If you are considering filing for Chapter 7 bankruptcy, it also is a wise idea to seek legal counsel from an experienced bankruptcy attorney.

No Comments

Leave a comment
Comment Information
Email Us For A Response

How May I Assist You?

How May I Assist You?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Law Office of Ginger C. Cord, PSC
155 E. Main Street
Suite 330
Lexington, KY 40507

Toll Free: 800-762-6916
Phone: 859-963-2073
Fax: 859-254-2192
Lexington Law Office Map