Chapter 7 bankruptcy is an important legal and financial tool that helps many New Yorkers find stable financial footing each year. Through Chapter 7 bankruptcy a debtor may liquidate their assets for the purposes of paying off their creditors and wiping their schedule of debts clean. Though it is a rigorous process, Chapter 7 bankruptcy can leave individuals with the potential to rebuild their credit and their lives for a strong and financially successful future.

Despites its benefits, not everyone can use Chapter 7 bankruptcy. This post will address some of the ways that debtors may be barred from engaging with the process to eliminate their debts. This post, however, does not provide legal or financial advice. All questions about Chapter 7 bankruptcy should be discussed with New York-based bankruptcy attorneys.

Bars to Chapter 7 bankruptcy

Knowing whether one qualifies for Chapter 7 bankruptcy is the first step toward beginning the process. The following list introduces some of the factors that may prevent debtors from being approved to use it, but readers should know that its inclusions are not comprehensive of all possible bars to usage.

  • Too high of income
  • Too recent of past bankruptcy debt discharge
  • Access to disposable income to pay off debts
  • Failure to complete bankruptcy requirements, like credit counseling
  • Use of fraud or deceit in dealings with creditors

Before filing for Chapter 7 bankruptcy, a debtor can consult with a legal professional about their options.

What to do when you can’t file

When a person cannot use Chapter 7 bankruptcy to better their financial situation they should not give up. They may be able to pursue Chapter 13 bankruptcy if it is better suited to their financial situation. Their lawyer can help counsel them on debt relief options that may change their access to the bankruptcy process and support their goals of becoming debt free.