In difficult financial times, filing for bankruptcy can be a great way to get a fresh financial start and be free from the burden of debt. One of the most popular bankruptcy chapters is Chapter 7. It’s a preferred choice for many debtors because it enables them to quickly liquidate assets to pay off debts. In the majority of cases, these debtors will also benefit from a debt discharge, which means that they will be completely free of debt at the end of the process.
While Chapter 7 bankruptcy is a great choice for many, not everyone is eligible. The following are some common reasons why you may not be eligible for Chapter 7 bankruptcy.
Your income is too high
The most common reason why a person may not be eligible for Chapter 7 bankruptcy is that their income is too high. Chapter 7 bankruptcy is only available to those who would otherwise be unable to file for Chapter 13 bankruptcy because they do not have sufficient income. To file under this chapter, your income must below a predefined amount to qualify.
You recently filed for bankruptcy
If you filed for Chapter 7 bankruptcy in the past eight years or filed for Chapter 13 bankruptcy in the past six years, you will not be eligible to file.
You did not participate in credit counseling
You must participate in approved credit counseling in the 180 days prior to filing for Chapter 7 bankruptcy.
If you are worried about your financial situation, it is important to know that there are many options available to you. Filing for Chapter 7 is just one of many ways to tackle your debt.