Is Filing For Chapter 13 Bankruptcy Right For Me?
If you are currently considering personal bankruptcy, you are likely exploring your options for filing for bankruptcy in addition to other debt-relief possibilities. Once you have learned more about Chapter 13 bankruptcy, you may be wondering: is filing for Chapter 13 bankruptcy right for me? Chapter 13 bankruptcy can benefit many kinds of debtors who qualify, while other debtors may want to seek advice about other options such as Chapter 7 bankruptcy or, in some cases, Chapter 11 bankruptcy. If you are wondering whether Chapter 13 bankruptcy could be the right choice for you, ask yourself the following questions.
Do You Earn a Regular Income?
Chapter 13 bankruptcy is what is known as a wage earner’s plan, or a reorganization bankruptcy. Thus in order to be eligible to file for Chapter 13 bankruptcy, you will need to be able to show the court that you are a regular wage earner who will be capable of making routine monthly payments as part of a repayment plan agreement through which debts are reorganized. Typically, Chapter 13 repayment plans last for anywhere from three to five years, so you will need to plan to show that you have a job that will allow you to make regular payments during that period of time.
Are Your Debts Below the Chapter 13 Limit?
Chapter 13 bankruptcy has debt limits. To be clear, your debts must be below the debt limits in order to qualify for this type of bankruptcy. What are the current debt limits? Based on the recently passed law known as the Bankruptcy Threshold Adjustment and Technical Corrections Act, the total combined secured and unsecured debt limit for Chapter 13 bankruptcy is $2,750,000. This amount represents an increase from past debt limits and a change to the law such that secured and unsecured debts are not considered separately. Without an extension of this change to the debt limit, in two years it will revert to a debt limit of $465,275 (unsecured debt) plus $1,395,875 (secured debt).
If you have a significant amount of debt that is less than $2,750,000 but above either of the other limits cited above, you should be sure to file for Chapter 13 bankruptcy while the extended debt limit is in effect. If you do not qualify based on the debt limit, you may be able to file for Chapter 13 bankruptcy instead.
Are You an Individual or Sole Proprietor?
Chapter 13 bankruptcy is only available to individuals (and not to businesses), unless your business is structured as a sole proprietorship.
Are Your Debts Dischargeable?
You will only want to file for Chapter 13 bankruptcy (or for any type of bankruptcy) if your debts ultimately are dischargeable. If the majority of your debts are non-dischargeable debts, you should seek advice from a lawyer about other debt relief options.
Contact Our Chapter 13 Bankruptcy Lawyers in West Palm Beach
When you have questions about whether bankruptcy is right for you, and specifically whether you should consider Chapter 13 bankruptcy, you should seek advice from an experienced West Palm Beach Chapter 13 bankruptcy attorney at Kelley, Fulton, Kaplan & Eller. Our firm has years of experience representing individuals in Chapter 13 bankruptcy cases, and we can discuss your case with you today.