Thomas F. Miles, Attorney and Counselor at Law
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Conditions that can render a person ineligible for Chapter 7

Chapter 7 like other forms of bankruptcy has its own unique requirements, and these requirements must be fulfilled if a person is to be illegible for filing bankruptcy under Chapter 7. These are the circumstances in which the person will be considered ineligible for Chapter 7:

The debtor's income is above the limit: An income level is set, and if the income of the debtor is above this limit then it will be considered too high for the requirements of Chapter 7 unless it passes the second phase of the mean test. The mean test is used to determine whether the filer falls under the income level standards of Chapter 7. In the first phase of the test it compares the recent monthly income of the debtor with that of the median income of the state, if the monthly income is below or equal to the median income of the state then it falls under the standards of Chapter, but if the monthly income is above this then the filer must pass the second phase of the mean test. If the filer's monthly income is too high, then the disposable income after allowed expenses will be examined. If it is determined that the disposable income after the deductions of allowed expenses is significant enough to allow repayment to any of the creditors, then the filer will be considered ineligible for Chapter 7.

Debt was previously discharged via bankruptcy: if the filer has already successfully used Chapter 7 in the last 8 years or Chapter 13 during the last 6 years to eliminate their debts, then they will be considered ineligible to apply again for Chapter.

Previous failed attempt to file for bankruptcy: If the filer already applied for bankruptcy either under chapter 7 or 13 within the last 180 days and was deemed ineligible, then he is considered ineligible for Chapter 7 still within the 180 day period. The filer may also be considered ineligible for Chapter 7 if the court believes that the filer attempted to commit fraud with his creditors.

Filing for bankruptcy under Chapter 7 is a very complex endeavor as it has multiple unique standards and requirements that must be maintained and fulfilled over a significant period of time, thus it is highly recommended that you consult an experienced attorney near you.

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