People struggling with overwhelming debt may consider options, such as filing for Chapter 13 bankruptcy, to regain control of their finances. To receive bankruptcy assistance, however, they must meet certain eligibility requirements.
Reviewing the requirements and disqualifications for filing for Chapter 13 bankruptcy may help people determine if this option suits their circumstances and needs.
Requirements for Chapter 13 filings
According to the Internal Revenue Service, to qualify for Chapter 13 bankruptcy, people must meet certain requirements. Individual people or married couples may pursue Chapter 13 assistance. To qualify, they must have a regular income. Further, their total unsecured debts cannot exceed $394,725 and their total secured debts cannot total more than $1,184,200.
Disqualifications for Chapter 13 filings
According to the U.S. Courts, certain factors may disqualify people from filing for bankruptcy under Chapter 13. Debtors cannot file for Chapter 13 unless they underwent credit counseling with an approved agency within the previous 180 days. The court may also dismiss bankruptcy petitions from those who had another filing dismissed within the last 180 days because the filers voluntarily dropped their cases after creditors sought to recover property through the bankruptcy court or because they willfully neglected to appear before the court or to comply with orders issued by the court.
People should not take the decision to file for Chapter 13 bankruptcy lightly. Taking this step may affect their finances and futures. Therefore, those with significant financial challenges may find it helpful to consider all their options and the factors involved, including the eligibility requirements, when deciding how to achieve a fresh financial start.