{"id":286899,"date":"2016-04-04T10:41:50","date_gmt":"2016-04-04T15:41:50","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/chapter-7\/chapter-7-bankruptcy-rules-overview.html"},"modified":"2023-11-14T09:29:28","modified_gmt":"2023-11-14T14:29:28","slug":"chapter-7-bankruptcy-rules-overview","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/chapter-7\/chapter-7-bankruptcy-rules-overview.html","title":{"rendered":"Chapter 7 Bankruptcy Rules Overview"},"content":{"rendered":"\n
\n \n
\n

Chapter 7 Bankruptcy Rules Overview<\/h1>\n
\n
\n By Linda Sanabria, J.D.<\/a> | Legally reviewed by Susan Mills Richmond, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

You may file for either a Chapter 7 or Chapter 13 bankruptcy. Both Chapter 7 and Chapter 13 have advantages, and both will ultimately appear on your credit report.<\/p>\r\n

The type of bankruptcy you qualify for will depend on your monthly income, amount of debt, and overall financial situation. A Chapter 13 bankruptcy<\/a> acts as a reorganization of debt where you can use monthly payments to pay off a repayment plan<\/a>.<\/p>\r\n

On the other hand, a Chapter 7 bankruptcy, also known as a liquidation bankruptcy, erases all debt that is legal to erase.<\/p>\r\n

Chapter 7 bankruptcy rules determine who qualifies, how to file, and what debt is eligible for discharge<\/a>.<\/p>\r\n

Read on for a general overview of Chapter 7 bankruptcy basics.<\/p>\r\n

Qualifying for Chapter 7 Bankruptcy<\/h2>\r\n

Every state has different income guidelines. Those who fall within their state’s criteria may be qualified to file for Chapter 7 under the Bankruptcy Means Test.<\/p>\r\n

The means test<\/a> stops filers who have the ability to repay their creditors from discharging their debt. Filers have to show proof of all debt and income from the last six months to comply with the means test.<\/p>\r\n

If you have a certain amount of income left over every month after paying creditors, you will fail the means test.<\/p>\r\n

Although you may be ineligible for Chapter 7 bankruptcy, Chapter 13 is an option. A Chapter 13 bankruptcy petition allows filers to repay creditors with a repayment plan.<\/p>\r\n

Who Is Ineligible To File Chapter 7 Bankruptcy?<\/h2>\r\n

Under Chapter 7 bankruptcy rules, you are ineligible to file based on:<\/p>\r\n