Table of Contents
- Self-Assessment Checklist: Are You a Likely Candidate for Chapter 7?
- Income: Is Your Income Below the State Median?
- Assets: Do You Own Only Basic Property?
- Debts: Are Your Debts Mostly Unsecured?
- Budget: Do You Have Little to No Disposable Income?
- Credit Report: Is Your Score Already Damaged?
- Goals: Do You Want a Quick Fresh Start?
- Have You Filed Bankruptcy Before?
- Bonus: Are You Working With a Bankruptcy Attorney Near You?
- ReferU.AI Can Help
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If you're considering filing for bankruptcy, determining if Chapter 7 is the right option for you is crucial. This self-assessment checklist will help you evaluate your eligibility for Chapter 7 bankruptcy and highlight the importance of consulting an experienced attorney near you for personalized guidance.
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Discover if you qualify for Chapter 7 bankruptcy with our comprehensive self-assessment checklist. Understand key factors like income, assets, and debts, and find out how an attorney near you can assist in navigating the bankruptcy process for a fresh start.
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Mar 30, 2025 06:20 PM
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Self-Assessment Checklist: Are You a Likely Candidate for Chapter 7?
Thinking about filing bankruptcy, but unsure whether Chapter 7 is the right path for you? You’re not alone. Chapter 7—also known as “liquidation bankruptcy”—is the most common form of bankruptcy, but not everyone qualifies.
This post offers a quick self-assessment checklist to help you determine whether you’re a likely candidate for Chapter 7. While this is no substitute for legal advice, it’s a great starting point for evaluating your options—and deciding whether to speak with a bankruptcy attorney near you.
💡 For every post in this series, scroll down to “Related Posts.”
Income: Is Your Income Below the State Median?
The first step is to assess your income level. If your average monthly income over the last six months is below your state’s median income for your household size, you’re likely eligible for Chapter 7.
- Do you earn less than ~$70,000/year for a one-person household (example for CA)?
- Have you recently experienced a job loss or income drop?
If yes, you likely pass the Means Test’s first threshold.
Assets: Do You Own Only Basic Property?
Chapter 7 filers typically keep essential assets due to exemption laws, including:
- A modest home or apartment
- A vehicle (up to a certain value)
- Personal belongings (clothing, appliances, furniture)
- Retirement accounts
If you don’t own luxury items or significant property, Chapter 7 is likely to be a “no asset case,” meaning you won’t lose anything.
See Will I Really Lose Everything? Understanding Asset Protection for more on what you can keep.
Debts: Are Your Debts Mostly Unsecured?
Chapter 7 works best for unsecured debts, like:
- Credit cards
- Medical bills
- Personal loans
- Utility arrears
It’s less effective for:
- Student loans
- Recent taxes
- Child support or alimony
See Does Bankruptcy Eliminate All Debts? Breaking Down Dischargeable vs. Non-Dischargeable Debts to understand which debts qualify.
Budget: Do You Have Little to No Disposable Income?
Even if your income is above median, you may still qualify if your disposable income (after expenses) is minimal. Consider:
- High medical costs
- Dependents or child care expenses
- High mortgage or car payments
If your budget is stretched thin, you may still pass the Means Test.
See How to Calculate the Means Test Step-by-Step (With Examples) for guidance on computing eligibility.
Credit Report: Is Your Score Already Damaged?
If you’ve missed multiple payments or defaulted on accounts, your credit may already be low—and Chapter 7 can stop the damage.
See Bankruptcy and Your Credit Score: Fact vs. Fiction to learn how bankruptcy can lead to long-term credit recovery.
Goals: Do You Want a Quick Fresh Start?
Chapter 7 is ideal for those seeking fast debt discharge (within 3–6 months) and who:
- Don’t want a multi-year repayment plan
- Need immediate relief from lawsuits or collections
Have You Filed Bankruptcy Before?
You can’t file Chapter 7 if you’ve received a Chapter 7 discharge in the last 8 years or Chapter 13 discharge in the last 6 years (unless special exceptions apply).
See Am I Legally Allowed to File Multiple Times? Rules for Repeat Filings for timelines.
Bonus: Are You Working With a Bankruptcy Attorney Near You?
Filing Chapter 7 is complex—eligibility calculations, exemptions, paperwork, court hearings. A local bankruptcy attorney near you can:
- Accurately assess eligibility
- Maximize what you keep
- Guide you through the Means Test
- File everything correctly to avoid delays
ReferU.AI Can Help
If you answered “yes” to most of these questions, you may be a strong candidate for Chapter 7. But don’t go it alone—ReferU.AI connects you with an experienced bankruptcy attorney near you who can confirm your eligibility and guide your filing for the best outcome.
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