A Chapter 13 bankruptcy allows the debtor to come up with a payment plan that allows them to take care of the overwhelming financial burden while still keeping the assets and property most valuable to them. A Chapter 13 bankruptcy can be used to allow the debtor to save or keep their house, pay mortgage arrears, pay back taxes, and manage their debt. In this blog, we will break down the requirements you must meet to be eligible to file for Chapter 13 bankruptcy.
Businesses Cannot File For Chapter 13 Bankruptcy
Even if you are the sole owner of the business, you cannot file for a Chapter 13 bankruptcy under its name. If you’re filing bankruptcy for your business, you’ll likely file for a Chapter 11 bankruptcy. You can, however, include business-related debts in your Chapter 13 bankruptcy.
Do you have sufficient disposable income?
To be eligible to qualify for a Chapter 13 bankruptcy, you have to show the court that even after taking out certain allowed expenses as secured debts, you will still have enough income to make your payments. If your repayment plan fails to cover your debts in full, the judge will not approve it – an unapproved repayment plan can cause delay in your bankruptcy case.
The following sources of income can be used to fund a Chapter 13 bankruptcy plan:
- Social Security benefits
- Child support and alimony
- Money that’s brought in from selling property
Are you up-to-date on your income tax filings?
You have to be able to show the court that you filed your federal and state income tax for the four years leading up to when you filed for bankruptcy. If you are unable to bring forward paperwork or transcripts that show your tax returns, your case may be dismissed.
At Nguyen Law Group, our Rancho Cucamonga bankruptcy attorney understands the overwhelming stress of shouldering a financial burden. Clients who come to the firm can trust that they will be guided, step by step, to a debt-free future.
Call Nguyen Law Group today at (909) 328-6280 or contact us online to request
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