Bankruptcy & Chapter 13 Jurisdictional Limits
Chapter 13 bankruptcy is a voluntary proposal by individuals who want to repay creditors over time. The bulk of the debt is repaid within five years, and typically involves paying only part of the debt. Chapter 13 allows you to keep assets that could be lost in other bankruptcy proceedings.
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Jurisdiction
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Federal courts hold the jurisdiction of all bankruptcy proceedings. Federal courts also retain jurisdiction of any cause of action arising out of the bankruptcy as long as it is sufficiently related as decided by the court on a case by case basis.
Initiating Proceedings
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File a petition with the federal bankruptcy court including a list of creditors, schedule of assets and liabilities and a statement of financial affairs. All property prior to the bankruptcy filing is included in the bankruptcy estate. The court reviews the petition and information and, if eligible, you are given a payment plan.
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Limitations
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You can only request Chapter 13 if you are an individual with regular income. Businesses are not eligible. Unsecured debt must be less than $250,000 and secured debt must be less than $750,000. Unsecured debt includes credit card debt. Secured debt includes your mortgage, vehicle or any other debt that is tied to an asset. Individuals with debt that exceeds this amount must file Chapter 11 or Chapter 7.
Discharge
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You can be discharged from Chapter 13 bankruptcy when you have completed the payment plan, have not been discharged from a previous bankruptcy within a certain time frame and have completed a financial management course.
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References
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