Information On Chapter 13 Bankruptcy Eligibility
Deciding whether or not to file for Chapter 13 is a serious decision to make. However, it can be a viable option for you if you are still earning a regular income but are still struggling with creditors calling you every day.
If you are able to make a partial payment, you can restructure your debt so you can pay your creditors a potentially reduced amount in three to five years without putting your residence or car in jeopardy. There are specific criteria that you have to meet in order to be eligible.
Here is an overview.
When Is Chapter 13 Appropriate?
Chapter 13 is only for debt restructuring by an individual, not by a business. Some individuals want to file for Chapter 7 because they want to liquidate their assets and get their debt wiped out. However, many do not qualify. If you have enough disposable income to pay back at least part of your debt and want to keep your house, Chapter 13 would be the more appropriate option. Chapter 13 protects your home from foreclosure and can prevent your car from getting repossessed. It can prevent your wages from being garnished while your debt is restructured.
Participation In A Credit Counseling Program
You need to agree to take part in a credit counseling program that is approved by the bankruptcy court and earn a certificate of completion. You must submit this certificate along with your Chapter 13 filing within 180 days of its issuance, or else it will expire. These courses are available online. We can provide a list of agencies that are approved so you can choose one that you prefer.
Debt Must Fall Within Certain Limits
Your debt must fall within the dollar limits stated in the bankruptcy code. For Chapter 13, your total secured debt, which includes your mortgage, car loan, and other loans that are backed by collateral, must be less than $1,257,850. For unsecured debt, which includes almost everything else like credit card balances, medical, and other unpaid bills, the limit is $419,275.
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Last Four Years Of Income Tax Returns
Before you file, you must produce the last four years of your federal and state tax returns. Without these returns, the court will dismiss your bankruptcy case. If you have not been filing your taxes, you might still be able to file them late. Discuss this with us, and we will go over what your options are.
Take Your First Step In Financial Recovery
Bankruptcy laws are complex. Our dedicated team of attorneys at W. Ron Adams can help you unravel the complexities of Chapter 13. We understand the financial challenges that you are going through. Our firm is highly regarded in Northern Kentucky as the leader in bankruptcy debt relief. We have helped dozens of clients address their debt issues and help them get their personal finances back on solid ground. Call us today for a free consultation to discuss if Chapter 13 is right for you.
LET OUR EXPERIENCE GUIDE YOU
Call to schedule your Free Bankruptcy Consultation!