Can I File Chapter 13 Bankruptcy?

  • David M. Offen,
  •   Chapter 13 Bankruptcy
  •   Comments Off on Can I File Chapter 13 Bankruptcy?

Can I file Chapter 13 Bankruptcy? Those who do not qualify for Chapter 7 bankruptcy often times consider Chapter 13. While this is a good option for many debtors, not everybody is eligible to file. If you have questions about the bankruptcy process, including whether or not you should be filing Chapter 7 or Chapter 13, it is best to speak with an experienced attorney. This person can answer your questions, help you decide which option is best, and assist with the filing process. Before we get into the finer details of what it takes to file Chapter 13 bankruptcy as an individual, it is important to note that corporations do not qualify. As a corporation, your only option is Chapter 11. Note: if you are a business owner, you can file for Chapter 13 as an individual. When doing so, you are able to include business-related debts for which you are personally liable. Do you have Disposable Income? To qualify for Chapter 13, you are required to show that you have enough income, after allowed expenses, to meet the obligations of a repayment plan. Your plan will require you to make payments on your debtl. If you are unable to do so, the Chapter 13 Trustee will not recommend that your Chapter 13 plan be approved.  Fortunately, many income sources are taken into consideration including (but not limited to):

  • Wages and/or salary from current employment
  • Self-employment income
  • Pension payments
  • Social Security benefits
  • Unemployment benefits
  • Disability benefits
  • Workers’ compensation
  • Welfare payments
  • Child support
  • Alimony
  • Rental income

Your Debt must not be must not be over the allowed limits Do you have secured debt that exceeds $1,149,525? If so, you do not qualify for this type of bankruptcy. While this number can change from time to time due to inflation, it gives you a solid understanding of just how much debt you must have in order to be disqualified. In addition to secured debt, your unsecured debt cannot exceed $383,175.  Have you filed your tax returns? If you have not filed federal and state income tax returns for the four years prior to your bankruptcy, you will need to file the returns for the case to be able to proceed. Those who need time to catch up can ask the court to postpone their hearing. At this point, you probably have a better idea of if you can file Chapter 13 bankruptcy. If you have any questions, contact a local bankruptcy attorney who can help determine your eligibility and guide you through the process.

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