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Am I eligible to file for Chapter 7 bankruptcy?

Am I eligible to file for Chapter 7 bankruptcy?

Chapter 7 bankruptcy may be available to those in Virginia who are filing as an individual or a business entity. Those who qualify are allowed to liquidate any debts that are eligible to be discharged regardless of how much that debt is. For instance, a debtor who has $1,000 of debt is given the same consideration under the law as someone with $100,000 worth of debt.

Individuals who have had a bankruptcy case dismissed in the previous 180 days for failing to follow the orders of a bankruptcy court may not file for bankruptcy. This is true whether that individual wanted to file for Chapter 7 or Chapter 13 bankruptcy. The rule also applies if a debtor voluntarily dropped a bankruptcy case after creditors took action to seek relief.

An individual who wishes to file for bankruptcy must undergo credit counseling from an approved agency. This must be done no more than 180 days before the date of filing. Debtors may have the requirement waived in emergency situations or in the event that a trustee determines that no such agency existed. Many types of unsecured debts are eligible for a discharge under Chapter 7 bankruptcy rules.

Filing for bankruptcy may allow a debtor to obtain a clean financial slate. In some cases, certain unsecured debts may be discharged and the debtor will have no future obligation to make payments on those debts. Those who are thinking about filing for bankruptcy may wish to talk to a bankruptcy attorney prior to doing so. This may enable them to learn about their obligations before filing as well as learn how to get the case resolved as quickly as possible.

Source: United States Courts, “Liquidation Under the Bankruptcy Code“, September 14, 2014