file for bankruptcy, individuals or businesses must meet certain qualifications. The qualifications for filing for bankruptcy vary depending on the type of bankruptcy being filed, which are typically categorized as Chapter 7 and Chapter 13 bankruptcies in the United States. Here are the qualifications for each type
Table of Contents
Chapter 7 Bankruptcy
– Means Test
To qualify for Chapter 7 bankruptcy, individuals must pass the means test. This test compares the individual’s income to the median income in their state. If their income is below the median, they are generally eligible for Chapter
If their income is above the median, they may still qualify based on their disposable income and expenses.
– No Recent Bankruptcy Discharge
Individuals cannot file for Chapter 7 bankruptcy if they have received a discharge in a Chapter 7 case within the past eight years or a Chapter 13 discharge within the past six years.
– Credit Counseling
Before filing for Chapter 7 bankruptcy, individuals must complete a credit counseling course from an approved agency within 180 days.
Chapter 13 Bankruptcy
– Regular Income
Chapter 13 bankruptcy is designed for individuals with a regular income. They must have enough income to cover their living expenses and make monthly payments towards their debts.
– Debt Limit
There is a debt limit for Chapter 13 bankruptcy. As of 2021, the unsecured debt limit is $419,275, and the secured debt limit is $1,257,850. These limits are adjusted periodically to account for inflation.
– No Recent Bankruptcy Discharge
Individuals cannot file for Chapter 13 bankruptcy if they have received a discharge in a Chapter 7 case within the past four years or a Chapter 13 discharge within the past two years.
– Credit Counseling
Similar to Chapter 7 bankruptcy, individuals must complete a credit counseling course before filing for Chapter 13 bankruptcy.
It is important to note that bankruptcy laws and qualifications may vary by country, so it is advisable to consult with a bankruptcy attorney or legal professional in your jurisdiction for specific details.