Grounds for Chapter 7 dismissal
Under 11 U.S.C. § 707, the court can dismiss a Chapter 7 case for several reasons:
1. Means test failure (§ 707(b)(2))
The means test compares your income to your state's median income. If your income exceeds the median and the means test formula shows you can repay a significant portion of your debts, the case is presumed to be an abuse. See our means test failure guide.
2. Totality of circumstances abuse (§ 707(b)(3))
Even if you pass the means test, the court can dismiss for abuse based on the totality of your circumstances. Indicators include: ability to pay debts from future income, recent lavish spending, or strategically timing income to manipulate the means test.
3. Bad faith (§ 707(b)(3)(A))
Filing in bad faith -- to delay creditors, to abuse the process, or for improper purposes -- is grounds for dismissal. See our bad faith guide.
4. Failure to comply with filing requirements
Under § 521, you must file all required documents within specified deadlines. Failure to provide tax returns, pay stubs, credit counseling certificates, or complete schedules can result in automatic dismissal.
5. Prior discharge time bar
Under 11 U.S.C. § 727(a)(8), you cannot receive a Chapter 7 discharge if you received one in a prior Chapter 7 case filed within 8 years. Under § 1328(f), a prior Chapter 13 discharge within 6 years bars a Chapter 7 discharge (with exceptions).
What happens after dismissal?
When a Chapter 7 case is dismissed, the automatic stay lifts and creditors can resume collection. You can typically refile unless the court orders otherwise under § 109(g). If the dismissal is for abuse, the court may impose a 180-day bar on refiling or conditions on any future filing.
Conversion is often an option. If your Chapter 7 case is at risk of dismissal for means test failure, you may be able to convert to Chapter 13 under 11 U.S.C. § 706(a). Chapter 13 does not have a means test -- instead, your income determines your plan payment amount.