The question posed in the title of this post poses an interesting issue, because anyone can file for Chapter 7 bankruptcy. The issue many Floridians will run into after the fact, however, is that they are not eligible to seek the protections of the process. Some may have their cases converted to Chapter 13 cases, and others may have their cases rejected.
To answer the posed questions, this post will explain who may not be eligible to pursue to Chapter 7 bankruptcy to reduce or eliminate their outstanding debts. Before choosing to file for bankruptcy, readers should talk to their trusted bankruptcy attorneys about their intentions. This post is informational but does not offer its readers any financial or legal advice.
Limits to accessing the Chapter 7 bankruptcy process
There are many bars to accessing Chapter 7 bankruptcy for debt relief. One bar is having the ability to repay some of the debtor’s obligations. If a person has enough money left over after paying for their needs to repay some of their debts, then they may not be able to use Chapter 7 bankruptcy.
Another possible bar to Chapter 7 bankruptcy is if a debtor has too high of an income. Individuals who file for Chapter 7 may be subject to a means test that compares their income to that median income of the state. If their income exceeds that threshold, they may be precluded from using Chapter 7 bankruptcy.
Other bars to Chapter 7 bankruptcy can include prior bankruptcy filings, prior bankruptcy discharges, and deficiencies in the bankruptcy process. A knowledgeable bankruptcy attorney can advise their client on how to avoid these pitfalls to accessing the Chapter 7 process.
What options does a debtor have besides Chapter 7?
It is important that readers remember that Chapter 7 is only one option for debtors. Other forms of bankruptcy, like Chapter 13, may be more beneficial to their needs. Debtors’ conversations with their trusted attorneys can help them make good choices about their financial futures.