In my two previous posts, I discussed the importance of income and equity in determining if you qualify for Chapter 7 bankruptcy. In this third related post, I will discuss several other issues which may determine whether you will be able to file a Chapter 7 bankruptcy, or if you must file a Chapter 13 bankruptcy.... or if you are eligible at all.
The first important question to review is whether or not you have ever previously filed a bankruptcy. It is important to know if you have previously filed a Chapter 7 bankruptcy because you are only eligible to file another one 8 years after the previous date of filing. If your previous filing is too recent, there are really only two options... wait to file another Chapter 7 bankruptcy, or consider a Chapter 13 bankruptcy, which will allow another discharge of your debts, but will require you to repay at least some of your creditors. If you have filed another bankruptcy, definitely let your attorney know. Timing your case may be very important.
It is also important to know how long you have lived in the state in which you want to file. You must be domiciled at least 91 days in the state in which you wish to file. Domicile simply means the place where you consider it to be your home. For instance, if you rent an apartment in Pennsylvania, but often travel for weeks (or months) at a time out of state, Pennsylvania will still be considered your state of domicile. If you cannot wait the necessary 91 days, you will be forced to file in your previous state of domicile. This is important, because you absolutely cannot file in a state in which you are not domiciled.
Filing your taxes is also a requirement to filing Chapter 7 bankruptcy. If you have not filed your taxes, your bankruptcy attorney will have you complete them before filing your case, otherwise the case cannot be completed with a discharge. It should be noted, you will not be required to pay and Federal Income Taxes if you owe money. You are merely required to have them filed. Unfortunately, they will generally not be dischargeable.
A final issue that may prevent you from filing a Chapter 7 bankruptcy would be a recent transfer of property (such as a home or a car) to a friend, family member, or business associate. If you have made such a transfer in the past two years, let your bankruptcy attorney know when you discuss your case. It may be necessary to delay your case filing, or have the property returned.
Taken together, these issues along with your income and equity in your home will largely determine if you qualify for a Chapter 7 bankruptcy. Contact us if you would like to discuss your situation in detail in a free consultation. Chapter 7 bankruptcy may be a great option for you.