Am I Eligible for Chapter 13?
April 2, 2019
As a debt repayment plan, chapter 13 allows you to keep your home and other possessions while discharging many types of debt. You must meet certain criteria to be eligible for chapter 13, as it’s crucial that you’re able to keep up with payments for the duration of the repayment term, which usually ranges between three to five years.
According to Debt.org, businesses are not able to claim chapter 13 status. This plan is intended for individual filers, who must show that they have a sufficient income to meet the conditions of the plan. After filing the initial bankruptcy petition, a debtor has 14 days to provide verification of all sources of income. This includes job earnings, unemployment wages, money earned selling property, Social Security payments, and pensions.
You also have to show that you’re current on your taxes. Taxes, along with student loans and spousal/child support payments, are not eligible to be discharged. That means these debts must be repaid in full regardless of how much you owe. If you’ve missed filing taxes over the four years preceding your petition, chapter 13 may not be granted until taxes are paid off.
In terms of the chapter 13 process, you’ll be responsible for assorted fees, including a filing fee of $235, along with administrative costs totaling $75. The bankruptcy court will also request some information from you. This includes a list of your creditors and how much you owe, income statements, tax returns, your total monthly living expenses, titles and deeds for properties you own, and any leases that are in your name. You’re also responsible for creating a repayment plan, which the court and your creditors will review to ensure it’s a fair proposal.