Not knowing whether you qualify for Chapter 13 is among the most common questions people who are thinking of filing for bankruptcy ask bankruptcy lawyers in San Diego.

Potential clients inquire about how Chapter 7 works and how many times they can file Chapter 7, as well as about the details of filing Chapter 13. However, on this occasion, we’ll help you learn if you qualify for Chapter 13.

How do you qualify for Chapter 13?

According to the Southern District of California Department of Justice, there are several criteria you have to meet in order to qualify for Chapter 13:

  1. Business entity – Chapter 13 is only for individuals or partners – husband and wife. If you’re a business owner who’d like to file a Chapter 13 for his business, you are not eligible. The same goes for commodity brokers and stockbrokers.
  2. Prior bankruptcy – If you have discharged a debt during the previous two years under Chapter 13, or during the previous four years under Chapter 7, you are not eligible for Chapter 13.
  3. Amount of debt – In order to file Chapter 13 bankruptcy, your debt mustn’t be too high. The limits are $336,900 for unsecured debt and $1,010,650 for secured debt. These limits are adjusted once every three years, for inflation.
  4. Tax return – In order to qualify for Chapter 13, you need to provide proof of filing federal and state income tax during the four previous years, and you have to provide it seven days before the meeting of creditors.
  5. Debt counseling – You’re required to provide proof that a credit counseling agency approved by the government has provided you with the services of debt counseling. You should do this 180 days before trying to file a Chapter 13.
  6. Sufficient income – Lastly, you need to prove that you have sufficient income to pay all of your potential financial obligations before being approved for Chapter 13.

Can you be denied Chapter 13 bankruptcy?

Yes, unfortunately, you can be denied Chapter 13 bankruptcy. The most common reasons for being denied Chapter 13 bankruptcy include failing to meet all the criteria required, failing to provide all the necessary documentation, or failing to appear in court for the 341 hearing.

And, we know, all of this sounds a bit frightening, and you’re right to feel that way. Filing for bankruptcy can be a bit complicated for an individual without any previous knowledge of these matters.

However, if you hire a good bankruptcy lawyer when thinking of filing for bankruptcy, not only do the odds of your claim being approved increase, but the entire process becomes a lot easier and less stressful.

Filing for bankruptcy is not scary in its own right. In fact, it can prove to be the best thing you could have done. However, the process can be complex, which is why you should consider seeking professional legal help.

Can I file Chapter 13 if I just bought a car?

You can file for Chapter 13 if you’ve recently bought a car. You won’t lose any of your assets if you’re in the process of filing for bankruptcy. You are free to protect or exempt all the assets you deem necessary for a fresh start after the process is complete.

Just know that, if you’ve bought a car shortly before filing a Chapter 13, you’ll have to continue paying for the car according to the terms of the car loan as you probably won’t be able to include the car loan in your Chapter 13 payment plan.

“Who are the best bankruptcy lawyers in San Diego I can ask for advice?”

If you’re thinking about filing for Chapter 13, but find it hard to wrap your head around all the paperwork and the criteria required for it, don’t worry, everybody’s been there. That’s why you should turn to Chang & Diamond – the best of the best when it comes to bankruptcy.

We will guide you through the sometimes winding road to a successful Chapter 13 case, and you’ll come out of it strong and satisfied. If you’re finding it hard to enjoy your visits to the San Diego Natural History Museum, come to our office for a consultation and begin your journey to a happier tomorrow!