- posted: Jun. 15, 2025
- Bankruptcy
While bankruptcy is a valuable tool for individuals overwhelmed by debt, not everyone qualifies. The specific requirements depend on the type of bankruptcy being considered—primarily Chapter 7 or Chapter 13, the most common forms for individuals.
The following are possible reasons a debtor can be disqualified from obtaining bankruptcy protection:
Recent bankruptcy filing — If you have received a discharge in a Chapter 7 bankruptcy within the last eight years or a Chapter 13 discharge within the previous six years, you are generally ineligible to file again immediately for the same type. This rule is designed to prevent abuse of the bankruptcy system.
Failing to meet the means test — To qualify for Chapter 7 bankruptcy, a debtor must pass the “means test,” which assesses whether their income is below the median for their household size in their state. Since Chapter 7 is meant for those without the means to pay their debts, debtors whose income is too high must consider Chapter 13 or another option.
Dismissal of a previous bankruptcy — If you previously filed a bankruptcy case that was dismissed (for example, for failure to comply with court orders or because of fraudulent activity) within the past 180 days, you are blocked from filing a new bankruptcy case during that window. The bankruptcy courts take compliance with procedure and honesty very seriously.
Fraudulent behavior — Attempting to hide assets, falsify information, or defraud creditors during bankruptcy proceedings will not only disqualify you but can also result in criminal charges. Blanketing your petition with false statements, transferring property to friends or relatives, or concealing income are examples of fraudulent behavior that can lead to disqualification.
Failing to complete required credit counseling — Before filing for bankruptcy (under either Chapter 7 or 13), individuals must complete a mandatory credit counseling course with an approved agency. This requirement aims to ensure filers are informed about alternatives and the implications of bankruptcy. Failure to complete the course is grounds for immediate disqualification or dismissal of the bankruptcy petition.
Incomplete or incorrect paperwork — Bankruptcy requires extensive, accurate documentation. Omitting critical information, failing to provide required documentation, or making mistakes on paperwork can result in a case dismissal.
Understanding these disqualifications is vital to determining whether bankruptcy is the right path and to preparing a successful case if you do proceed. A knowledgeable bankruptcy attorney will help you to navigate these complex requirements.
At Marlin Branstetter Attorney at Law in Anaheim, I deliver effective legal support to Californians living with unmanageable debt and considering bankruptcy. Call me at 714-276-8589 or contact me online to schedule a free initial consultation.
