How to Qualify for Chapter 13
Chapter 13, also known as Chapter 13 Wage Earner Plan, allows people to pay debts over time while keeping their property, according to U.S. Courts. Even during foreclosures, people can stop such proceedings by making up for delinquent payments over time. According to www.lawyers.com, Chapter 13 provides for full or partial repayment of debts over three to five years, based on an individual's circumstances. Under Chapter 13 debtors go through a "means evaluation" to determine how much they will repay and how long they will have to do so. There are certain requirements to qualify for Chapter 13.
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Instructions
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Earn an income and be an individual. According to www.bankruptcyhome.com, the most important aspect to being eligible for Chapter 13 is having a regular income. Furthermore, no corporations may file for Chapter 13, only individuals or sole proprietors.
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Hold debt less than the set limits. To be eligible for Chapter 13, an individual can hold unsecured debts smaller than $336,900, and secured debts must be less than $1,010,650, according to U.S. Courts. These numbers are altered periodically to reflect changes in the economy.
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Be in good standing with bankruptcy courts. Individuals must not have had a prior bankruptcy petition within the last 180 days that had been dismissed because of the debtor's failure to appear in court, according to U.S. Courts. Likewise, if an individual failed to comply with court orders or was dismissed after creditors sought relief to recover property in which said creditor held liens, he will not be eligible to file for Chapter 13.
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Attend credit counseling, within 180 days prior to filing, by an approved credit counseling service. According to U.S. Courts, there is an exception to this rule if there are not a sufficient number of approved credit counseling agencies available.
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Complete the bankruptcy forms and gather the following information: individual's work and amount of income, list of all creditors and amounts owed, list of all of the debtor's properties and a detailed list of the debtor's living expenses for each month.
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Pay a total fee of $274 to file the case with the courts. According to U.S. Courts, installments can be made on the filing fees. The fees must be paid within 120 days of filing.
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Tips & Warnings
According to U.S. Courts, if a debt management plan is developed with an approved credit counseling agency, the plan must be filed with the courts.
