Florida residents struggling with debt often consider Chapter 7 bankruptcy as an option for wiping their financial slates clean and rebuilding their credit.
There are some qualifying criteria, however, that you must meet to file for this type of debt relief. Learning more about these eligibility requirements may help you determine whether Chapter 7 bankruptcy is the right choice for you.
Disqualifiers for Chapter 7 bankruptcy
There are several reasons that a Chapter 7 bankruptcy petition can be disqualified or dismissed. For example:
- The bankruptcy court will often voluntarily dismiss any debtor’s case if filed within 180 days of a creditor’s request for a leave of court. Leaves like these usually happen because a creditor attempts to recover collateral.
- A bankruptcy trustee may also dismiss any filing submitted by a debtor that had their case dismissed within the past 180 days due to them not complying with court orders, including appearing in court.
- The same logic applies if a debtor fails to complete required credit counseling and submit their respective certificate of completion to the court before filing for Chapter 7 bankruptcy. This too may result in your case’s dismissal.
- Any proof that the court amasses that you transferred your property to someone else or concealed, falsified or destroyed financial records may also make you ineligible to file for bankruptcy or result in a trustee dismissing an open case.
You are also ineligible to file Chapter 7 bankruptcy if you’ve previously done so within the past eight years.
What you need to know about the bankruptcy means test
Anyone who plans to file Chapter 7 bankruptcy must first successfully pass the means test. It aids the court in determining how significant your debts are and whether you have the means to repay them. The court may convert your case to a Chapter 13 one if you fail this test.
Do you qualify to file for Chapter 7 bankruptcy protection?
Having your debts discharged in bankruptcy would likely take a significant amount of stress off your shoulders. You may wonder what options you can pursue if you don’t meet the stated eligibility criteria, though. An attorney can go over those debt relief options with you.