Chapter 13 Bankruptcy: Eligibility
Chapter 13 Bankruptcy: Eligibility
Chapter 13 bankruptcy provides a way for those with too much income to qualify for Chapter 7 relief, or those with property they want to keep such as a house or car, to receive a discharge of some portion of their debts. However, there are a few qualifying factors that one must meet in order to file for Chapter 13 relief. You may also visit our page that is dedicated to Chapter 13 Bankruptcy relief to learn more.
Chapter 13 Bankruptcy Qualifications
First: To qualify for a Chapter 13 bankruptcy, one must be either an individual (or joint) debtor. Businesses generally do not qualify for Chapter 13 relief, however if you are the sole owner of a business entity and you vote to transfer all the business assets and debts to yourself as an individual, you can effectively liquidate the business and claim all of its debts and assets in your individual filing.Second: To qualify for a Chapter 13 bankruptcy, your total secured and unsecured debts must be within certain limits. The limits change periodically, but right now the limit for secured debt eligible for discharge in a Chapter 13 is $1,081,400. The limit for unsecured debt eligible for a Chapter 13 discharge is $360,475.Finally: To qualify for a Chapter 13 bankruptcy, you must be able to propose a legally feasible repayment plan. You must have sufficient income to pay back all ‘priority’ debts (examples are child support and tax debts), make your required monthly payments on the property you want to keep, including any arrearages owed, and pay at least some money toward your unsecured debts over the life of the plan.We can assist you by reviewing your options. We'll help you propose a feasible plan is to take the means test- an eligibility requirement for Chapter 7 that asks higher-income filers to show that they cannot propose a feasible Chapter 13 repayment plan.
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