Chapter 7 Bankruptcy — Who Can File?

Filing for Chapter 7 bankruptcy can be a powerful tool for dealing with overwhelming debt. But it isn’t available to everyone. There are several situations in which you won’t be allowed to file Chapter 7 bankruptcy.

Your Income Is Below The Median Income For A Family Of Your Size In Nevada

The  first step in figuring out whether you can file for Chapter 7 bankruptcy is to measure your “current monthly income” against the median income for a family of your size in your state (See Nevada median income). Your “current monthly income” is your average income over the last six months before you file. If your income is less than or equal to the median, you can file for Chapter 7 bankruptcy.

If your income is more than the median, however, you must pass “the means test” in order to file for Chapter 7 bankruptcy.

Use a Chapter 7 Means Test Online Calculator

If you’re looking for an easy way to determine your eligibility under the Chapter 7 means test, use our online means test calculator. Once you enter your zip code, the calculator uses the applicable income and expense standards for your state, county, and region to determine your eligibility.

You’ll have to supply some income and expense information, but the calculator will save you the trouble of looking up income and expense figures for your area and doing the math. And, if you decide to file for Chapter7 bankruptcy, you can use these figures on your official paperwork (the calculator closely follows the format of the means test form, Official Form 22A, that you must complete when you file for bankruptcy).

You Have Not Previously Received A Bankruptcy Discharge Within The Past Eight Years

You cannot file for Chapter 7 bankruptcy if you obtained a discharge of your debts in a Chapter 7 bankruptcy case within the last eight years, or a Chapter 13 case within the last six years.

A Previous Bankruptcy Was Not Dismissed Within the Previous 180 Days

You cannot file for Chapter 7 bankruptcy if a previous Chapter 7 or Chapter 13 case was dismissed within the past 180 days because:

• you violated a court order
• the court ruled that your filing was fraudulent or constituted an abuse of the bankruptcy system, or
• you requested the dismissal after a creditor asked for relief from the automatic stay.

You Have Not Defrauded Your Creditors

A bankruptcy court may dismiss your case if it thinks you have tried to cheat your creditors or concealed assets so you can keep them for yourself.

Certain activities are red flags to the courts and trustees. If you have engaged in any of them during the past year, your bankruptcy case may be dismissed. These no-nos include:

• unloading assets to your friends or relatives to hide them from creditors or from the bankruptcy court
• running up debts for luxury items when you were clearly broke and had no way to pay them off
• concealing property or money from your spouse during a divorce proceeding, or
• lying about your income or debts on a credit application.

In addition, you must sign your bankruptcy papers under “penalty of perjury” swearing that everything in them is true. If you deliberately fail to disclose property, omit material information about your financial affairs, or use a false Social Security number (to hide your identity as a prior filer), and the court discovers your action, your case will be dismissed and you may be prosecuted for fraud.