We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What are the Chapter 7 Bankruptcy Rules?

Nicole Madison
By
Updated: May 17, 2024
Views: 3,182
Share

Chapter 7 bankruptcy rules govern who can apply for this type of bankruptcy and when they can apply. For example, rules stipulate that a person who files this type of bankruptcy must demonstrate that he does not have enough money to pay his debts. Additionally, he cannot have a discharged bankruptcy that is less than eight years old. Likewise, an individual who had a bankruptcy case dismissed in the previous 180 days for reasons such as court order violations or fraud is not eligible for a Chapter 7 bankruptcy.

One of the most important Chapter 7 rules governs who can apply for this type of bankruptcy. Individuals are usually eligible for this type of bankruptcy discharge, but partnerships and corporations are not. This does not mean that they cannot file bankruptcy, however, as there are other types of bankruptcy that are available for partnerships and corporations.

The amount of money the individual owes is not usually a factor in whether or not he is eligible for bankruptcy, but some types of debts may not be eligible for discharge. For example, many types of students loans are not eligible for Chapter 7 discharge. Chapter 7 bankruptcy rules usually exclude child support as a dischargeable debt as well.

There are also Chapter 7 bankruptcy rules that involve the ability of an individual to repay his debt. To be eligible for this type of bankruptcy, an individual’s income cannot exceed the median income in his state. In the event that a person’s income is too high, he may still have the right to file this type of bankruptcy if he does not have enough disposable income to create a reasonable five-year repayment plan for a significant amount of his debt.

Some Chapter 7 bankruptcy rules involve the previous filing of bankruptcy. Usually, an individual is not eligible for this type of bankruptcy if fewer than eight years have passed since he received a Chapter 7 bankruptcy or fewer than six years have passed following a Chapter 13 bankruptcy. Likewise, if a person had a bankruptcy case dismissed in the last 180 days because he violated a court order, he is not eligible for this type of discharge. The same holds true if an individual committed fraud or an abuse of bankruptcy law.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Nicole Madison
By Nicole Madison
Nicole Madison's love for learning inspires her work as a WiseGeek writer, where she focuses on topics like homeschooling, parenting, health, science, and business. Her passion for knowledge is evident in the well-researched and informative articles she authors. As a mother of four, Nicole balances work with quality family time activities such as reading, camping, and beach trips.

Editors' Picks

Discussion Comments
Nicole Madison
Nicole Madison
Nicole Madison's love for learning inspires her work as a WiseGeek writer, where she focuses on topics like...
Learn more
Share
https://www.wisegeek.net/what-are-the-chapter-7-bankruptcy-rules.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.