Who can file a chapter 7 bankruptcy?

Who can file a chapter 7 bankruptcy?

Any individual who resides, is domiciled, or owns property or a business in the United States can…believe it or not…file a chapter 7 bankruptcy case in the U.S. Bankruptcy Court.  A business is also allowed to file a chapter 7bankruptcy-court bankruptcy but will not receive a discharge.

Just because a person resides, or is domiciled etc. etc.  doesn’t necessarily mean that once he has filed the chapter 7 bankruptcy case, that he can actually stay in the bankruptcy case.  People get kicked out that shouldn’t have filed the chapter 7 in the first place for a few different reasons.

Means Test

The bankruptcy code requires that those individuals with primarily consumer debts to take a “means test”.    This test is a convoluted way the law uses to determine whether the individual has the “means” to pay both living expenses and some amount of debt over a period of time.  If the person fails the means test, they can be kicked out of the chapter 7.  If this occurs, then they will need to file a chapter 13 bankruptcy and pay something toward the debt or deal with the creditors directly.

Prior Filing

If the filer has filed a chapter 7 case within the last 8 years and received a discharge, or a chapter 13 case within the last six years and received  a discharge.

Prior case dismissed within the last 180 days and one of the following are true:

  • A Court Order was violated
  • A Court ruled that the filing was fraudulent or was an abuse of the bankruptcy system
  • The filer requested a dismissal of the case after a creditor asked for relief from the automatic stay


The Court can dismiss the case if it thinks the filer tried to cheat.  Things like:

  • Giving away stuff in order to hide it from creditors or from the bankruptcy trustee prior to filing.
  • Running up debts to buy “fancy” stuff when the filer was clearly unable to pay the debt
  • Hiding money or property from the spouse during the divorce
  • Lying about financial situation to creditors

Failure to tell the truth

When a petition and schedules are filed that are assumed to be complete and truthful.  They are signed by the filer under penalty of perjury.  (read as potential jail time to some).  If the filer deliberately fails to disclose information, or uses a fake social security number they are going to get kicked out of a chapter 7 bankruptcy.  OR worse.

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