Not everyone is able to qualify for Chapter 7 bankruptcy

On Behalf of | May 20, 2021 | Chapter 7 Bankruptcy |

If you’re going through financial difficulties in North Carolina, you have options. One option to consider is filing for bankruptcy. But, before doing that, it’s imperative to learn if Chapter 7 bankruptcy is right for you. With that in mind, not everyone can qualify for it. Here’s a closer look at what you’ll need to qualify for Chapter 7 bankruptcy.

Passing the bankruptcy means test

Before you qualify for Chapter 7 bankruptcy, you’ll need to pass the bankruptcy means test. Based on your income, this test compares what you earn per year with your state’s median income. If you earn too much, you won’t be able to qualify for Chapter 7 bankruptcy.

Chapter 7 is for single people, married couples, or owners of small companies

After passing the means test, there are a few other conditions you’ll need to meet. You’ll need to either be single, married filing jointly, or a small business owner to qualify for this type of bankruptcy. Chapter 7 bankruptcy isn’t allowed for corporations or LLCs.

You’ll have to receive credit counseling

Another requirement to meet before filing for bankruptcy is receiving credit counseling. This help must come from a credit counseling agency that gets approved by the government. You’ll also need to complete this counseling no more than 180 days before your bankruptcy discharge.

You haven’t had a recent bankruptcy charge or dismissal

You’ll also need to ensure you haven’t had a previous discharge for Chapter 7 bankruptcy within the past eight years. You must also not have had a bankruptcy dismissed within the past 180 days.