The biggest qualification is related to the income of the debtor. If the debtor’s income is higher than the state median then a “means test” will be applied to see if the chapter 7 is feasible. This “means test” will look at the debtor’s gross monthly income over a 5 year period. If this monthly income is more than $10,950 or 25% of the debtor’s unsecured debt then the individual will not be eligible.

Aside from meeting the income requirements, a potential chapter 7 bankruptcy applicant must prove that he or she has received credit counseling from an approved agency within the last 180 days.

Chapter 7 bankruptcy is unique because of the liquidation of non-exempt assets and the relative speed at which these cases can be handled vs. other types of bankruptcy protection.