Who Can File for Chapter 13 Bankruptcy?

Once you’ve noticed the warning signs possibly suggesting the need to file bankruptcy (your debt is too high for you to pay off, you have troubles paying your monthly bills, or you have suffered a job loss, which seriously affected your finances), contact bankruptcy lawyers Escondido CA residents rely on before the situation gets out of hand.

You are surely trying to make things right, wondering what your options are. If you are struggling to understand the situation while desperately trying to acquire the necessary paperwork, asking around: “Where can I find the best Chapter 13 bankruptcy lawyers near me?”, you have come to the right place – the help is closer than you think, even if your  bankruptcy case has been dismissed before.

What does Chapter 13 stand for?

Chapter 13 is one of four Bankruptcy Code law chapters that individuals can file in the event of bankruptcy. Unlike Chapter 7, which allows the debt to be paid off by acquiring means selling debtor’s nonexempt property, Chapter 13 has a different goal. It is designed to reconstruct the debt into a repayment plan that should last between 3 to 5 years. The debtor has to be able to make monthly payments to an appointed trustee, who is responsible for forwarding the money to appropriate debtor’s creditors – this is why Chapter 13 is often referred to as a “wage earner plan”.

Who can file for Chapter 13?

There are several qualifications a debtor must meet before filing:

  • The debtor can file for this bankruptcy plan only as an individual or as a married couple, as Chapter 13 is not available for businesses. However, if business-related debts are a sole proprietor’s personal responsibility, that person is also eligible to use the wage earner plan;
  • The debtor must have a regular income. As the basis of Chapter 13 plan is the debtor’s capability to make monthly payments, if their income is too low or inconsistent, a possibility of Chapter 13 discharge will most probably be dismissed in court;
  • The debtor’s unsecured debt must fall under $394,725, while the secured debt must stay below $1,184,200;
  • The debtor is not eligible for Chapter 13 if their debt was previously discharged when filing for the same plan in the past two years, or when successfully filing for Chapter 7 in the past four years;
  • The debtor can file for wage earner bankruptcy if they have regularly filed their income tax returns;
  • The debtor cannot file for a Chapter 13 discharge if they already filed for the same plan or for Chapter 7 within previous 180 days, and it got dismissed for reasons such as not appearing in court, not complying with appropriate court orders or other relevant reasons.

If you feel lost in all the terms, explanations, requirements, and they only make you worry even more, do not despair. It’s time to answer the question that surely troubles you the most: “Where can I find the best Chapter 13 bankruptcy lawyers near me?”

So, who are the best Chapter 13 bankruptcy lawyers near me?

The bankruptcy lawyers Chang & Diamond, APC, are recognized professionals always available for questions and consultations. Dial our toll-free numbers (619) 312-4900 or (800) 718-8118 and book your appointment. Together, we can get your future right back on track.