Chapter 13 Bankruptcy Eligibility Requirements
In a Chapter 13 bankruptcy, you keep your assets, but continue paying on your debts over a period of 3-5 years. It allows those who are looking to pay back owed money the time to do so, while working with a fixed budget. By making sure that you have all of the items needed to qualify for Chapter 13, this may put you one step closer to becoming debt free.
One way of doing this is by getting assistance from an experienced attorney. John Dunlap has experience in this area and is willing to help your case. Contact our offices for assistance in Chapter 13 and get a free 30 minute session.
Am I Eligible for Chapter 13 Bankruptcy?
You may be wondering if you are eligible for Chapter 13 Bankruptcy. By following the list of requirements that are needed will help individuals become more eligible for this type of bankruptcy. While there are many benefits that come from Chapter 13 bankruptcy, following these requirements will provide you with some guidance on whether you qualify or not.
Chapter 13 Bankruptcy Eligibility Requirements
One of the biggest benefits of filing for Chapter 13 is the ability to repay your debts throughout a period of time. This is often done through a repayment plan. However, there are some steps to take in preparing for Chapter 13, before the court approves the plan that proves that you are eligible for Chapter 13. This includes:
- updated tax information
- proof that you area within debt amount limitations
- have enough income to fulfill the monthly payment plan
Proof of up-to-date tax information is one way that qualifies you for Chapter 13 eligibility, this includes federal and state income tax returns for the four tax years prior to your bankruptcy filing date. In addition, one must also have proof of income to show the court that you can pay on the decided upon amount in the repayment plan. The court must have proof that your income will cover the debts owed in full to be approved.
Additionally, your debts amounts cannot exceed $336,900 of unsecured debt and $1,010,650 in secured debt. Secured debts are debts that are secured by an asset such as a house or a car. Unsecured debts are debts that lenders do not have the right to and can’t collect any collateral for the debt, such as credit cards.
If you are unsure about the Chapter 13 bankruptcy eligibility requirements and if you qualify or not, contact John Dunlap. He is well versed and experienced in Chapter 13 bankruptcy and is more than willing to help.
Chapter 13 instead of Chapter 7?
When looking at bankruptcy eligibility requirements, you may be trying to decide whether or not Chapter 13 or Chapter 7 is the better choice. Some reasons why one may want to choose Chapter 13 over Chapter 7 may include:
- If you are behind on your mortgage or car loan. Chapter 13 allows you to pay back owed debts on loans.
- If you have a tax obligation, domestic support arrearages, or other debt that you cannot discharge. Chapter 13 also takes care of any tax obligations that you may face, which is discussed in your repayment plan.
- If you need more time to repay your debts. This is one of the biggest benefits of choosing Chapter 13 over Chapter 7 bankruptcy. Chapter 7 does not allow you 3-5 years to pay back the money that you owe, whereas Chapter 13 gives you more control over how long and how much you pay.
Seeking credit counseling during the Chapter 13 process may help you have a better understanding of what is and is not acceptable. Contact John Dunlap for help with your case. We offer a FREE 30 minute consultation to discuss your situation.
You can file for Chapter 13 if:
- You Are Not a Business Entity: A business cannot file for Chapter 13 bankruptcy in the name of that business. Bankruptcy for businesses typically fall under a different category. However, you are able to file for Chapter 13 bankruptcy as an individual even if you own a business. Chapter 13 can help a sole proprietor with their business plan.
- You Have been Discharged from Previous Bankruptcy: If you have filed for bankruptcy in the past, you have to wait two years after filing Chapter 13 or four years after filing Chapter 7 before filing again.
- You Have Attended Credit Counseling: Chapter 13 bankruptcy requires you to complete a credit counseling at least 180 days prior to filing bankruptcy. Completing this requirement is part of your eligibility.
- You Have Filed Your Income Tax Returns: You must have proof of your income tax from the previous four years to be eligible for Chapter 13.
- You Have Sufficient Income to Pay Debt: Because Chapter 13 is a pay back option, you must prove that your income will be sufficient enough to cover the payments that are agreed upon in the repayment plan.
Figuring out Chapter 13 bankruptcy eligibility requirements can be overwhelming on your own. John Dunlap is an experienced attorney who offers expertise in this area of bankruptcy. By taking advantage of our FREE 30 minute consultation, you may be one step closer to making the best decision about your finances.