If you’re reading this, you’re most likely going through a rough patch. Going bankrupt or being on the brink of bankruptcy is not something you should be trying to deal with alone, as the cost of failure is too high to take any chances.
If you’re considering to file for bankruptcy to get out of uncertainty and grasp for even the tiniest string of hope, do note that there are certain requirements you must meet in order to be approved.
Today, our Salt Lake City bankruptcy attorney Justin M. Myers is going to focus on Chapter 13 bankruptcy requirements. “What’s the difference between Chapter 7 and 13 bankruptcies?” you may wonder.
Well, filing for Chapter 7 bankruptcy allows you (the debtor) to discharge certain specified debts in exchange for turning your nonexempt property, if any, over to a trustee. Filing for bankruptcy under Chapter 13, on the other hand, allows you to keep your property by proposing a repayment plan to make regular payments to creditors over three to five years.
So do you qualify to file for Chapter 13 bankruptcy? Check out these Chapter 13 requirements:
You’re ineligible for Chapter 13 if you’re a bankrupt business entity. Only individuals and households (husband and wife) are eligible to file for Chapter 13 bankruptcy. Businesses, corporations, and limited liability companies (LLC) do not qualify for Chapter 13 bankruptcy and must consult a bankruptcy attorney to find out what’s the best bankruptcy plan for your particular business in Salt Lake City.
You will be banned from filing for bankruptcy under Chapter 13 if:
If you tried filing for Chapter 13 bankruptcy in the past 180 days and your case was dismissed, you will have to wait until after 180 days have passed to try again.
In order to qualify for Chapter 13 bankruptcy benefits, you have to show documented proof that an approved credit counselling agency provided you with debt counselling in the past 180 days.
Ask a Salt Lake City Chapter 13 bankruptcy attorney about how to speed up the process of getting a debt management plan from a credit counselling agency.
There are certain limits when it comes to filing for bankruptcy under Chapter 13. According to law, your unsecured debt should NOT exceed $336,900 in order to qualify for Chapter 13. If you’re wondering what is unsecured debt – these are the debts that are not secured by property (think: medical bills, credit card debt, etc.).
As for secured debt, there’s a limit of $1,010,650.
In order to qualify under Chapter 13 requirements, you – as a debtor – must file state and federal income tax returns for the previous four years. You must have proof of filing your income tax returns. Before you meet with creditors, it is highly advised to speak to the best bankruptcy attorneys in Salt Lake City to have a clear plan in mind.
In order to qualify for Chapter 13, you must have sufficient income to pay the debt. Please note that you must have enough income, after deducting allowable expenses, for mandatory payments to priority and unsecured creditors, as well as for certain other payments after filing for Chapter 13 bankruptcy.
There are certain other Chapter 13 requirements a debtor must meet in order to qualify. Find out the full list of requirements by contacting our attorneys at JMM Legal.