To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor
may be an individual, a partnership, or a corporation or other business
entity. Subject to a means test for individual debtors, relief is available
under chapter 7 irrespective of the amount of the debtor's debts or
whether the debtor is solvent or insolvent. An individual cannot file
under chapter 7 or any other chapter, however, if during the preceding
180 days a prior bankruptcy petition was dismissed due to the debtor's
willful failure to appear before the court or comply with orders of the
court, or the debtor voluntarily dismissed the previous case after creditors
sought relief from the
bankruptcy court to recover property upon which they hold liens. In addition, no
individual may be a debtor under chapter 7 or any chapter of the Bankruptcy
Code unless he or she has, within 180 days before filing, received credit
counseling from an approved credit counseling agency either in an individual
or group briefing. There are exceptions in emergency situations or where
the U.S. trustee (or bankruptcy administrator) has determined that there
are insufficient approved agencies to provide the required counseling.
If a debt management plan is developed during required credit counseling,
it must be filed with the court.
One of the primary purposes of bankruptcy is to discharge certain debts
to give an honest individual debtor a "fresh start." The debtor
has no liability for discharged debts. In a
chapter 7 case, however, a discharge is only available to individual debtors, not
to partnerships or corporations. Although an individual chapter 7 case
usually results in a discharge of debts, the right to a discharge is not
absolute, and some types of debts are not discharged. Moreover, a bankruptcy
discharge does not extinguish a lien on property.
If you have questions about whether filing bankruptcy