For reasons of circumstance or incompetence, bankruptcy is sometimes the only option. However, before considering filing for bankruptcy one must make sure they are eligible to file for the form of bankruptcy they feel best fit. Filing bankruptcy online will tell an individual if they are eligible or not without seeking professional legal aid. For the individual, Chapter 13 requirements are lesser than the other option of Chapter 7, but there are still many limitations.
How Chapter 13 Works
Chapter 13 bankruptcy is a progressive form of bankruptcy that defies common bankruptcy assumptions. Through Chapter 13 bankruptcy, all debts are to be repaid. Recently, filing bankruptcy online became possible. However, those seeking bankruptcy because of financial incompetence rather than uncontrollable circumstances, professional legal aid is suggested to avoid further mistakes.
Individuals
For individuals attempting to file for Chapter 13 bankruptcy an income large enough to make monthly payments for three to five years according to a repayment plan designed after bankruptcy is granted. For those trying to file for bankruptcy a second time or more, there must be at least 180 days between attempts.
Married couples
Married couples may file jointly or separately as individuals. With either option, the requirements are the same.
Debt Limitations
The total debt per individual must be less than $336,900 of unsecured debt. Unsecured debt is to creditors who are not able to claim the debtors' property when unpaid. Common Examples of these debts are:
- Credit cards
- Department store cards
- Personal loans
- Phone bills
- Cable bills
- Internet bills
The total debt per individual must be less than $1,010,650 in secured debt. Secured debt is to creditors who can claim property from the debtor when unpaid. Examples of common secured debts are:
- Mortgages
- Car loans
- Home equity lines
The amounts of the debt limits are periodically altered to account for changes in the consumer price index. They were last changed in 2007. To calculate debts, a bankruptcy filing list should be created. Each company on the bankruptcy filing list will have to make a proof of bankruptcy claim. If the proof of bankruptcy claim is not made within 90 days of the bankruptcy meeting, the creditor loses their claim to debts.
Businesses
A business partnership or corporation may not file for bankruptcy as a whole. However, if the business is owned by an individual and the individual is eligible for bankruptcy, the business may be included in this manner with the same requirements.
