Chapter 13 bankruptcy is a debt relief option that is often often chosen by those who don't qualify for Chapter 7 bankruptcy via, for example, the bankruptcy means test.
The bankruptcy means test determines whether someone's income level is at or below the state median level based on family size. The means test is, in part, used ensure that those who qualify for Chapter 7 bankruptcy are those who would benefit from it the most.
Chapter 13 bankruptcy is a debt repayment option that has numerous benefits of its own for those who are eligible. For example, the automatic stay that comes with Chapter 13 bankruptcy is a legal action that can halt certain lawsuits brought against the filer, and it prevents debt collectors from continuing to pursue outstanding debts included in the bankruptcy. This can mean an end to harassing phone calls, letters and visits from debt collectors during the bankruptcy proceedings.
While there is no official Chapter 13 means test, you will need to meet certain requirements in order to file, such as having enough money to make regular payments to your bankruptcy trustee.
If you would like to learn more about Chapter 13 bankruptcy, or the bankruptcy means test, you may want to talk to one of our sponsoring bankruptcy attorneys. Get answers on if bankruptcy is right for you, and which type of bankruptcy you are eligible to file.
Filing bankruptcy may be a life changing experience. So get the facts before you may such a big decision.
To file for bankruptcy under Chapter 13, there are certain requirements, however there is no Chapter 13 means test, which exists for Chapter 7. Several of these requirements deal with previous bankruptcy filings, and limitations that result from past bankruptcies according to how long ago they were filed and what the outcome was.
Also, Chapter 13 requires you to make regular payments to a bankruptcy trustee, so you'll need some regular income. Chapter 13 takes your debts and combines and orders them. In some cases, they may be reduced or cleared. Then, you'll work with the court to create a repayment plan and you'll write a check to a trustee who will then handle your creditors and debts.
Other requirements include the completion of a credit counseling certificate. This course must be completed before filing for Chapter 13 bankruptcy. There are also limits on the amount of debt that someone has before they can file for Chapter 13 bankruptcy.
The law puts a limit on the amount of debt that is eligible. This debt is in the area of $336,900 for unsecured debt that isn't backed by physical property, and $1,010,650 for secured debts like car loans and home mortgages that are associated with collateral.
If you want to learn more about qualifying for bankruptcy protection, speak with a local Chapter 13 lawyer. A lawyer may answer all of your questions about filing and help you make an educated choice about what's best for your future.
You can get a free case evaluation with a Chapter 13 lawyer near you when you complete the free form on this page.
Laws may have changed since our last update. This is for informational purposes only and is not legal advice. For legal advice on your particular situation, speak to a local attorney.