I Passed the Means Test – Can I File Chapter 7 Bankruptcy?
Before consulting with an experienced bankruptcy lawyer, many Georgians perform some of their own research on Google in order to see if they qualify to file a Chapter 7 bankruptcy. Most people prefer to file Chapter 7 over Chapter 13 because at the conclusion of a successful Chapter 7 case, the bankruptcy court wipes away all of the person’s qualifying debts, whereas Chapter 13 requires a debtor to make payments to his/her creditors over a period of 3 to 5 years – and it is not until the end of this period that the remaining debt is discharged.
If you have done some reading on the Internet about Chapter 7, you have likely come across the Means Test. The purpose of the Means Test is to separate those debtors who truly can’t afford to pay their bills from those debtors who merely are having a difficult time meeting their bills and want to decrease their debt burden.
However, it is important that potential debtors understand that just because they pass the Means Test, it is not guaranteed that they can file for Chapter 7 and receive a discharge.
Recent Bankruptcy Cases
If you have filed any bankruptcy cases in the past, you may be ineligible for filing Chapter 7 (for a few years) even if you pass the Means Test. The bankruptcy law states that a person cannot receive a second (or subsequent) Chapter 7 discharge if that person already obtained a Chapter 7 discharge within the past 8 years. You are also prevented from filing a Chapter 7 case if you had successfully filed a Chapter 13 case within the past 6 years. Additionally, if you had a previous Chapter 13 or Chapter 7 case dismissed within the past 6 months, then you might not be able to file a Chapter 7 case. (But please note that this rule only applies if the previous case was dismissed because the bankruptcy court believed that you filed a fraudulent case, that you abused the bankruptcy system or violated a court order, or if you requested that the case be dismissed because one of your creditors requested relief from the automatic stay. )
Defrauding Creditors, Hiding Assets, Running Up Credit Card Bills
Even if you meet the eligibility requirements for a Chapter 7, the bankruptcy judge can still dismiss your case if he/she thinks that you have hidden your assets or tried to cheat, lie to, or defraud your creditors.
There are certain actions that are immediate red flags to bankruptcy judges such as a debtor transferring assets to his/her friends or family and not disclosing the asset or the transfer on the bankruptcy paperwork. Another big issue is when bankruptcy judges see that a debtor recently went on an expensive vacation, bought a new car or luxury jewelry, and put these new expenses on credit cards right before filing for bankruptcy.
It is of the utmost importance that debtors disclose everything on their bankruptcy paperwork, even if they are afraid that by doing so they will lose their Chapter 7 eligibility and their case will be dismissed. The reason honesty is so important in the bankruptcy process is because debtors sign all of their bankruptcy paperwork under “penalty of perjury.” This means that by signing the paperwork, you are swearing that everything you wrote is true and correct, and that you did not omit information that is relevant to the bankruptcy process.
If you have more questions about the Chapter 7 bankruptcy process and how you may qualify, contact our office today at 404-913-1529 to speak to one of our experienced attorneys about your case. We look forward to working with you!