The most common choices when filing bankruptcy are Chapter 7 and Chapter 13. To file Chapter 7, you must meet eligibility requirements.
The U.S. Courts explain you must meet a means test under bankruptcy law to file this type of case among meeting other requirements.
Means test
The means test is meant to prevent people from filing Chapter 7 rather than Chapter 13 when they could afford to repay at least some of their debts. You will automatically pass this test if your income is less than the state median income.
If you do not pass that part of the test, you can then provide financial information to see if you meet the other guidelines. You need to prove that you have little to no disposable income after paying necessary expenses and liquidating assets that are not exempt.
Other requirements
You cannot file Chapter 7 if you have had a previous bankruptcy in the past eight years. You also cannot file again if you had attempted to file previously and a judge dismissed the case in the previous 180 days.
You must also complete the required debt counseling course within 180 prior to filing your case. You also must complete the second required course on time according to bankruptcy laws or the court could dismiss your case.
You will have to show you are eligible to file Chapter 7 as part of your bankruptcy petition. It is essential that you ensure you meet all requirements. If you do not, the court will dismiss your case, and you will have to wait to try to file again. In some cases, if you fail the means test, the court will allow you to transfer your case to Chapter 13.
