Unlike in Chapter 7, you will not lose any property in Chapter 13 bankruptcy unless you don’t follow the payment terms in the repayment plan. Yet, you need to have enough regular income as a payment to your debts to qualify for bankruptcy 13. That is why Chapter 13 is also referred as the “wage earner’s bankruptcy”.

How to qualify for Chapter 13?

How to file Chapter 13: Begin your Chapter 13 bankruptcy battle by filing a petition with the court. There are other requirements you must comply with to be eligible in filing for Chapter 13.

• You must undergo and complete a credit counseling from a government-approved agency 180 days before filing a Chapter 13 petition. Thereafter, you must present your certificate together with other necessary documents requested by the court.
• Individual debtors who wish to file for Chapter 13 protection should have unsecured debts less than $394,725 and secured debts less than $1,184,200.
• Chapter 13 is originally designed to cater individual debtors and married couple with joint properties, which means businesses are not eligible and should file for Chapter 11.
• You must also provide a proof that you have filed state and federal income taxes for the past four years.
• You can’t file a Chapter 13 bankruptcy if you have a dismissed bankruptcy case within 180 days.
• You need to disclose information including (a) a list of creditors with the amount of claims, respectively; (b) the debtor’s amount and sources of income; (c) a list of the debtor’s property and accounting of all contracts and leases; (d) a liquidation of the debtor’s monthly living expenses; (e) the debtor’s most recent federal tax return and a statement of any unpaid taxes.

Chapter 13 repayment plan

You have to develop a Chapter 13 repayment plan mainly because this is the most important part of your Chapter bankruptcy case. This plan usually reaches a time span of three to five years of which you have to make monthly payments to finally receive a discharge.

You pay your plan payment through your disposable income which is determined by a calculation done to your income and expenses. And if you don’t have disposable income left, you can still attend to your debts because you filed your Chapter 13 bankruptcy.

Advantages of filing Chapter 13 bankruptcy

• After you file a bankruptcy petition, the court restricts your creditors from contacting you directly and making any collections from you of unpaid debts. Moreover, they should go through first with the bankruptcy trustee assigned by the court.
• You can keep your property (e.g. house, car) and even extend the time you have to pay your debts.
• If you have missed mortgage payments, you can prevent foreclosure and repossession through a Chapter 13 repayment plan because it allows you to catch up with those payments.

Before you make any move, maybe you should consider hiring a bankruptcy attorney who can give you professional help in managing your case towards the right direction. Find a bankruptcy attorney who clearly understands your goals and sincerely want to provide their service.

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