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Chapter 7 Bankruptcy Eligibility
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. Subject to the means test, that used for individual debtors, relief is available under chapter 7 bankruptcy irrespective of the amount of the debtor’s debts or whether the debtor is solvent or insolvent.
An individual cannot file under chapter 7 bankrutpcy or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
In addition, no individual may be a debtor under chapter 7 bankruptcy or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. There are exceptions in emergency situations or where the U.S. bankruptcy trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the bankruptcy court.
One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.
If you’re plagued by credit card debt, collection accounts or medical bills, Chapter 7 bankruptcy may be the most effective way to protect yourself from creditor harassment and get a fresh start. Patrick D. West Law Firm, P.C.’s licensed bankruptcy attorneys have over 40 years of combined experience handling bankruptcy cases in the Dallas, Fort Worth Metroplex. Our Fort Worth and Dallas bankruptcy attorneys and staff are ready to help you successfully complete the Chapter 7 process and make the annoying creditor phone calls stop. We’ve helped numerous clients eliminate their debt and get a fresh start. We may be able to do the same for you.
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