Everyone who files for bankruptcy has to qualify for the particular chapter that they file for. With Chapter 13 bankruptcy, the requirements are a little different than that of Chapter 7. And Chapter 7 bankruptcy requirements are different than Chapter 11 requirements. And so on and so forth.
Today, let’s just focus on the requirements for Chapter 13 bankruptcy, which is often referred to as the “consolidation” option of bankruptcy. This is because the central pillar of Chapter 13 bankruptcy is the reorganizing of your debts and the repayment plan that you will agree to before finalizing your bankruptcy. This allows you to repay your creditors under new terms.
However, you have to meet a number of criteria before you can go through with a Chapter 13 bankruptcy:
- A business entity is not allowed to file for Chapter 13
- A prior bankruptcy cannot disqualify you. If you had debt discharged in a Chapter 13 bankruptcy in the last two years or for Chapter 7 bankruptcy in the last four, then you may be disqualified from discharging debt in a Chapter 13. Similarly, if you had a bankruptcy filing dismissed in the last 180 days, then you may not be allowed to file for Chapter 13.
- Your debts do not reach a certain limit ($336,900 in unsecured debt and $1,010,650 in secured debt)
- You are up to date on your tax filings
- Your income is sufficient enough to meet the plan
Source: FindLaw, “Who Can File for Chapter 13 Bankruptcy?,” Accessed Oct. 27, 2017