What is Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is often called a “wage earners” plan because it requires the debtor to pay all or a portion of the debts over a three to five year period. A repayment plan without steady income may not be allowed since it leaves too much uncertainty.
Who is eligible for Chapter 13 Bankruptcy?
Any individual is eligible for to file for Chapter 13 bankruptcy as long as there is some evidence of regular income (this can include self-employed individuals) and the debtor’s unsecured debts are less than $360,475 and secured debts are less than $1,081,400 (figures as of 01/2012). Assuming your income is adequate, you will be allowed to restructure your debts while you repay your creditors over a three to five year period. If you do not have enough income (or a sufficiently steady income) for a Chapter 13 bankruptcy, you may be eligible to file for Chapter 7 bankruptcy.
Filing for Chapter 13
When you file a Chapter 13 bankruptcy, you are allowed time to pay off some or all of your debts without losing your personal property or real estate. This is possible through the repayment plan you agree to follow, which must be approved by the court. Some general steps you will have to take to file Chapter 13 bankruptcy include filing an official petition, calculating all of your debts, and making payments in accordance to your plan.
An experienced bankruptcy attorney can assess your particular situation to see if a Chapter 13 bankruptcy is right for you.
Chapter 13 Bankruptcy: An Overview.
Chapter 7 vs. Chapter 13 Bankruptcy: Which is Best?