What Are the Qualifications for Filing Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows debtors to repay what they owe over three to five years.

A Chapter 13 bankruptcy enables individual debtors to restructure and repay their outstanding debts over a three- to five-year period. Several factors are used to determine eligibility for filing Chapter 13.

Who May File

Individuals, married couples and businesses operating as sole proprietorships are eligible for Chapter 13, subject to income requirements.

Exclusions

Businesses operating as partnerships or corporations are ineligible for filing Chapter 13.

Debt Limits

Total unsecured debt, including credit cards, personal loans and utility bills, must be less than $336,900. Total secured debt, including mortgage, home equity, and auto loans, must be less than $1,010,650. (Both figures are as of December 2009.)

Additional Considerations

Your income for the six months prior to filing will be considered in determining whether you possess enough disposable income to meet the requirements of your repayment plan.

Disqualification

If a bankruptcy petition was dismissed in the 180 days prior to filing a second time, an individual may not file. Individuals also may not file unless they have attended certified credit counseling in the 180 days prior to filing.

References

• U.S. Courts: Chapter 13 Bankruptcy Basics
• Department of Justice: U.S. Trustee Program

Resources

• National Foundation for Credit Counseling