Chapter 7 is often called the "fresh start" bankruptcy because qualifying debt is wiped out entirely. Three factors determine whether you qualify.
1. Property Value
If you own substantial equity in a home, vehicle, or other property, the bankruptcy trustee may have authority to sell it and use the proceeds to pay creditors. Many people assume their home and car are automatically protected — that's not always true. Exemption rules vary, and an attorney needs to evaluate your specific situation.
2. Income
If your income is high enough that you could reasonably pay back creditors, you won't qualify for Chapter 7. Income thresholds vary by household size and state, and they change periodically. People above the threshold typically file Chapter 13 instead, which is a structured repayment plan.
3. Prior Filings
Timing rules limit how often you can file. You generally cannot receive a Chapter 7 discharge within eight years of a previous Chapter 7, or within six years of a Chapter 13 in most cases.
Don't Guess — Ask
Chapter 7 qualification is more nuanced than these three rules suggest. The means test, exemption planning, and timing all interact. The fastest way to know is to call us — consultations are free, and we'll tell you straight.