Are there ways to qualify for a Chapter 7 bankruptcy if we do not qualify for Chapter 13 (over unsecured debt limits)?

Asked over 5 years ago - Denver, CO

We do not pass the means test for a chapter 7 because our income is too high, but we would not be able to pay 25% of our unsecured debt off in 5 years. Our unsecured debt limit is above the limit to be eligible to file for a Chapter 13. Is there any way that we might be able to qualify for a Chapter 7 due to the fact that we don't qualify for ch 13 and the fact that we would not be able to pay 25% x 5 years to unsecured creditors?

Our other option is an individual chapter 11 case, but we cannot afford the filing fees/lawyer fees and I have read that the chances of completing a ch 11 is really low. I am just wondering if we have a chance at filing ch 7 even though we do not pass the means test because we do not qualify for a ch 13.

Attorney answers (1)

  1. E. Brian Davis

    Contributor Level 14

    Answered . By saying that "your income is too high" I am assuming you mean that you do not pass the means test.

    Please remember that there is a "special circumstances" exception to the means test and that you may well fit in that category. Probably the only way to find out for sure is to file the Chapter 7 case, note the numbers on the means test, and argue that special circumstances exist which ought to allow you to file the Chapter 7 case in spite of failing the means test. Then if the U.S. Trustee objects, the judge will decide.

    REMEMBER that the means test does NOT apply to persons who file Chapter 7 and have mostly business debt.

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