Most people who find themselves in a financial bind and are considering bankruptcy are generally uncertain as to whether they qualify to file Chapter 7. For most people, the concern of not qualifying for Chapter 7 bankruptcy stems from misinformation from friends and family or the internet. In fact, in 2019, more than 11,000 people filed for Chapter 7 bankruptcy in Los Angeles alone. This number will obviously be much higher for 2020 given the economic climate midst the COVID-19 pandemic.
However, if you are exploring your options for resolving debt, you should be aware that there are some restrictions on who can file Chapter 7 bankruptcy. As such, it is best to consult with an experienced Central Valley bankruptcy lawyer before you take any action.
Restrictions and Limitations for Filing Chapter 7 Bankruptcy
While it is best to speak with a bankruptcy attorney as to any restrictions and limitations on filing Chapter 7 bankruptcy because it is case specific, below are some general guidelines:
- Income eligibility. Since 2005, anyone who files for Chapter 7 bankruptcy must demonstrate that the filing is not abusive. This means that under the U.S. Bankruptcy Code, petitioners must show that they really need to file Chapter 7 and are not simply trying to get out of paying their debt obligations.
- Past bankruptcy filings. Although a past bankruptcy filing will not necessarily preclude you from filing Chapter 7, it can make you ineligible to receive a discharge in a Chapter 7 bankruptcy. As such, if you are ineligible for a Chapter 7 discharge, you may have no incentive to file. In most cases, an individual who has received a discharge in a prior Chapter 7 bankruptcy, must wait eight years from the filing date of the first case to file another Chapter 7 bankruptcy case and be eligible for discharge.
- Restrictions from bankruptcy court. Under the code section, bankruptcy petitioners who have been found to have abused the process, engaged in fraudulent actions, or dismissed a case in response to an adversary proceeding may be banned from filing another case for a specific period of time.
Call an Experienced Central Valley Bankruptcy Attorney
If you are considering Chapter 7 bankruptcy, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to Chapter 7 bankruptcy.
For more information or to schedule a complimentary consultation with Central Valley bankruptcy attorney Gurjit Srai, please call 209-323-5558, or complete our online form.