When you decide to file for bankruptcy, you will be faced with two major types. Learning how to file for Chapter 13 bankruptcy can ensure that you are making the right choice for you and your family. Not everyone is eligible to file for Chapter 13. What do you need to know about this type of bankruptcy?
You Must Be Able to Meet Repayment Requirements
The first thing that you need to know is that you will need to show the bankruptcy court that you have enough disposable income to make the required payments on secured debts, as well as your repayment obligations that will be under your bankruptcy plan. If you do not have sufficient income to meet your obligations, the judge will deny your bankruptcy plan.
Your Debt Level Cannot Be Too High
If your secured debts are more than $1,149,535, you cannot file for Chapter 13 bankruptcy. Secured debts include your home and car most commonly, but can also include other debts where you have collateral against the loan, such as a tax lien against your property, etc. Unsecured debts, such as personal loans and credit cards, cannot exceed $383,175 to qualify for Chapter 13 bankruptcy.
You Must Be Up to Date On Income Tax Filings
You will be required to submit proof that your tax returns, both federal and state, have been filed for at least the last four years prior to your bankruptcy filing date. If you need to catch up on your income tax filings, you will need to postpone your court date for bankruptcy, as your plan will be dismissed if you are not able to prove that you are current.
A Business Cannot File for Chapter 13
If you are filing on behalf of your business, even a sole proprietorship, you will need to file for another type of bankruptcy. Chapter 13 is only for individual bankruptcies, although you can include your business-related debts that you are personally liable for in your case. The only exception is that if you are a stockbroker or commodity broker, you cannot file Chapter 13.
When you want to take care of your debts, bankruptcy can be a choice that can allow you to get a new start financially. It will also allow you to pay off at least a portion of your debts. By getting all of the information possible concerning how to file for Chapter 13 bankruptcy, you can make sure that your plan will be accepted and you get a new start financially.