Bankruptcy Chapter 7 & 13

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Who Is Eligible
Chapter 7 Liquidation Bankruptcy

In order to file Liquidation Bankruptcy you must meet all of these requirements:

  • Not, within the last 8 years, have filed a Bankruptcy under Chapter 7 or Chapter 11 (business) in which you received a discharge.  [�727(a)(8)]
  • Not, within the last 6 years, have filed a Bankruptcy under Chapter 13 or Chapter 12 (family farmer or fisherman) in which you received a discharge.  This restriction may not apply if the prior Chapter 13 or 12 paid 100% of unsecured debt, or 70% of unsecured debt if plan was in good faith and it was the debtor's best effort.   [�727(a)(9)]
  • Have less income than the median for your state OR have less monthly income remaining after deducting allowable expenses to pay 25% of your total unsecured debt over 5 years. [�707(b)]
  • Not be a railroad, financial institution, or insurance company. [�109(b)]
Chapter 13 Debt Adjustment

In order to file for Debt Adjustment, you must:

  • Have sufficient regular income to meet your monthly living expenses and make a plan payment. [�109(e), �101(30)]
  • Have less than of unsecured debt, and less than of secured debt. [�109(e) ]
  • Not be a corporation, partnership, stockbroker, or commodity broker. [�109(e), �101(30)]

Note: You may file Chapter 13 even if you have filed a Bankruptcy within the last 8 years, or if you have too much income to qualify for Chapter 7.  A discharge will not be granted if you received a discharge in a Chapter 7 filed within the last  4 years [�1328(f)(1)] or a Chapter 13 filed within the last 2 years [�1328(f)(2)].

To file under both Chapter 7 and Chapter 13:
  • You must complete Credit Briefing, by internet, phone or in person, from an approved nonprofit budget and credit counseling agency within 6 months before filing.  [�109(h)(1)]
  • You must be a resident in the state in which you are filing for the last 90 days.  If you have not resided in the state that long, you can only file in the state where you have resided, or which has been your principal place of business or which has been the location of your principal assets for the majority of the last 180 days. [28 USC �1408]
  • You cannot file within 180 days after dismissal of a previous case if that case was dismissed because (1) you failed to obey court orders or failed to appear before the court, or (2) you requested that the case be dismissed after a creditor requested relief from the automatic stay. [�109(g)]

This page was last revised: 02/18/09