Are you struggling to keep up with your debt payments? Are you at risk of foreclosure or repossession? If so, Chapter 13 bankruptcy may be an option for you. But what qualifies you for this type of bankruptcy protection? Read on to learn more.
You must have a regular source of income to qualify for Chapter 13 bankruptcy
If you are contemplating filing for Chapter 13 bankruptcy, one of the requisites is having a regular source of income. Whether in the form of wages from employment, benefits from programs such as Social Security or unemployment compensation, or pensions from previous employers, demonstrating an ability to make regular payments towards debt obligations serves as an important factor for qualifying for this type of bankruptcy. Therefore, if you are struggling with unleveraged debt, taking stock of your current financial situation and assessing whether you possess a consistent income stream should be a top priority before considering all the possible actions that may qualify you for Chapter 13 bankruptcy.
Unsecured debts and secured debts
Struggling financially can feel like a daunting task, but filing for Chapter 13 bankruptcy may be the best solution. To qualify for this type of bankruptcy, your unsecured debts must not exceed $394,725 and your secured debts cannot exceed $1,184,200. While it will take considerable time and effort to get back on your feet financially, taking advantage of the provisions that Chapter 13 provides is an important step in rebuilding credit and debt restructuring.
You must have filed all required tax returns for the past four years
If you’re looking to qualify for Chapter 13 bankruptcy, it’s important to make sure that you have filed all of your required tax returns for the past four years. This information is crucial in gauging your financial status and determining whether or not you are eligible for this form of bankruptcy. Doing so also shows lenders that you are committed to taking control of your finances responsibly. It may seem tedious, but taking this extra step can help make the process go much smoother in the long run.
You must complete an approved credit counseling course before filing for bankruptcy
If you are considering filing for bankruptcy, it’s important to know that you must complete an approved credit counseling course before proceeding. Taking this precautionary step gives you the benefit of learning more about how to make and stick to a budget, handle unsecured debts, and evaluate other potential options for repayment and debt resolution. Therefore, meeting these criteria and hiring a leading Chapter 13 bankruptcy attorneys is essential for qualifying for Chapter 13 bankruptcy. Along with the completion of an approved credit counseling course, there are other requirements that must be met in order to file such as having enough funds to create a repayment plan. It’s best to understand all the qualifications beforehand so you can make an informed decision on what action to take.
You must develop a repayment plan and submit it to the court for approval
If you would like to file for Chapter 13 bankruptcy, you must have a repayment plan ready before the court process can begin. This repayment plan will determine how much of your debt you can repay over a period of three to five years. You must be able to prove that you have enough income left after your other expenses and debts, in order to make all the necessary payments. When submitting a repayment plan to the court, it is important to consider all relevant information such as income levels, living expenses, and the amount and type of debt you owe. The court will review your proposed payment plan to ensure it meets their requirements and allows for reasonable cost of living needs so that you remain financially secure during and after the bankruptcy case.
Filing for Chapter 13 bankruptcy is a big decision, so make sure you thoroughly understand what qualifications are needed before making any commitments. If done correctly and with great care, it could be a major lifesaver in difficult financial times.