Chapter 7 bankruptcy offers a way for debtors in California and other states to return to solvency. However, not everyone will qualify for a liquidation bankruptcy. To qualify, an individual will need to pass the means test. It’s important to note that only individuals or married couples can file for this type of protection. Debts owed by corporations or LLCs are not allowed to be discharged through this process.

Those who have below the median income in their state based on the size of their household can pursue a Chapter 7 bankruptcy. Debtors who have previously received a Chapter 7 discharge must wait at least eight years before trying to do so again. Furthermore, a debtor cannot seek a liquidation bankruptcy less than six years after receiving a discharge in a Chapter 13 case.

If a Chapter 7 case is dismissed for violating a court order or because of fraud, an individual must wait at least 180 days before filing again. Those who file for bankruptcy must obtain credit counseling no more than 180 days before they are set to receive a discharge. Failure to do so could result in a case being dismissed. It may be possible to receive financial assistance to help defray the cost of the financial management course.

Filing for bankruptcy can help a person eliminate credit card, medical and many other types of debt. An attorney may explain the specific benefits of filing for Chapter 7 protection. Those benefits may include an automatic stay of creditor contact or the ability to receive a discharge in a matter of weeks or months. An attorney may also help a debtor learn more about the credit counseling requirement and how to fulfill that requirement in a timely manner.