An individual who files a voluntary chapter 7 bankruptcy petition must, first of all, either have a “domicile” (that is, a place of official or legal residence) in the U.S., have a place of business in the U.S. or own property in the U.S.

An “alien” — that is, a non-U.S. citizen — can file a bankruptcy petition, as long as he or she satisfies at least one of those requirements. Under the law, minor children and insane people can also file petitions, usually through a guardian or trustee. You must not have been granted a Chapter 7 discharge within the last 8 years or completed a chapter 13 plan in the last 6 years. (If you think you have filed a previous bankruptcy within these time periods, call us. There are exceptions to the rules.) You must not have had a bankruptcy filing dismissed for cause within the last 180 days. It must not be a “substantial abuse” of bankruptcy to grant the debtor relief. Last, it would not be fundamentally unfair to grant the debtor relief under chapter 7 or chapter 13. You may be employed, self-employed or even unemployed, and you do not have to be insolvent. There’s no limitation on the total amount of debt you owe in order to qualify for chapter 7 relief. Generally speaking, if after you pay the monthly expenses for necessities there is not enough money to pay the remaining monthly debts, then granting a discharge would not be an abuse of chapter 7.  If you have secured loans (mortgage or car loans) and want to keep them, you must be current and be able to maintain the contract monthly payments.

Small-business owners who file chapter 7 can continue to stay in business if they do not have employees and have necessary insurance on their business activities. For most sole proprietorships, the trustee is not inrtrested in taking over your business unless there are significant assets (A/R, inventory, equipment, money in the bank, etc.)