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The Curious Bag
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Courts don't have requirements on the amount of debt that individuals or businesses must have to file for Chapter 7 bankruptcy. However, debtors must meet other criteria to be eligible for this type of bankruptcy.
Time Frame
To file for Chapter 7, debtors cannot have settled their debts through Chapter 7 or Chapter 13 bankruptcy in the previous six to eight years.
Means Test
The court reviews an individual's monthly income and living expenses from the previous six months, then measures the net income against the state's median income level. Individuals with an income above this level cannot file for Chapter 7 bankruptcy.
Credit Counseling
A certificate provided by an approved credit counseling agency dated at least 180 days before the filing date is required.
Considerations
Filers who have engaged in fraudulent activities will have their bankruptcy petition dismissed. Fraudulent activities include conveying or hiding personal assets to avoid losing them through bankruptcy or divorce, using false information to apply for credit and knowingly taking on more debt that can be paid back.
Warning
Chapter 7 filers who fail to provide the court with complete and truthful information about their economic situation can be charged with fraud.
Source:
U.S. Courts: Liquidation Under the Bankruptcy Code
NOLO: Chapter 7 Bankruptcy -- Who Can File?
NOLO: The Bankruptcy Means Test: Is Your Income Low Enough for Chapter 7 Bankruptcy?
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