Not long ago, this blog discussed the elements of a Chapter 7 bankruptcy filing. Many individuals who use bankruptcy as a means of alleviating their overwhelming financial burdens choose Chapter 7 because it provides a relatively quick method of finding freedom from debts. However, it is important that those who are considering bankruptcy understand the Chapter 13 process as well and the requirements it imposes on those who wish to utilize its protections.
Unlike a Chapter 7 bankruptcy which essentially eliminates a debtor’s outstanding financial burdens through the liquidation of their property, a Chapter 13 bankruptcy takes several years to complete as a debtor satisfies the requirements of their court-approved repayment plan. In order to file for Chapter 13 bankruptcy, a party must meet certain criteria.
First, businesses may not file for Chapter 13 bankruptcy. This process is reserved for private persons, only. Beyond that, only individuals who have not completed a Chapter 13 bankruptcy in the prior two years or a Chapter 7 bankruptcy in the prior four years may file for this type of bankruptcy.
Next, individuals who want to use Chapter 13 bankruptcy must be current on their tax filings and must have completed credit counseling in order to begin the process. They must be able to repay some of their debts but unable to repay all of their debts with the income that they receive.
There are a host of other requirements that people must meet in order to successfully file for Chapter 13 bankruptcy. To learn more about this useful legal process for ending burdensome debts, readers are encouraged to discuss their financial needs and concerns with bankruptcy attorneys in their areas.
Source: FindLaw, “Who Can File for Chapter 13 Bankruptcy?” accessed Nov. 13, 2017
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