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Who can file for Chapter 13 bankruptcy?

On Behalf of | Feb 22, 2021 | Chapter 13 Bankruptcy

Bankruptcy is an important process that can help Miami residents get out from under their debts. There are different types of bankruptcy that debtors can pursue, and one of them is Chapter 13 bankruptcy. Unlike Chapter 7 bankruptcy, which involves the liquidation of the debtor’s assets, Chapter 13 bankruptcy allows a debtor to use their disposable income to pay down their debts over time.

Not everyone who has debt can file for Chapter 13 bankruptcy. This post will provide general information about the process and who may qualify for its protections. The advice of a knowledgeable bankruptcy attorney should be sought by readers with bankruptcy questions as this post does not provide legal advice.

Rules for qualifying for Chapter 13 bankruptcy

One reason that individuals file for Chapter 13 bankruptcy instead of Chapter 7 bankruptcy is their income level. If a person makes too much money, they may not be allowed to use Chapter 7 to eliminate their debts. Chapter 13 uses a person’s income to formulate a repayment plan to pay of specific debts and creditors.

Aside from having income to use to pay off debts, a person must meet other qualifying terms to file for Chapter 13 bankruptcy:

  • Completion of credit counseling
  • Completion of taxes for prior 4 years
  • Repayment plan meets all creditor and debt requirements
  • No prior dismissed bankruptcy filings in prior 180 days

A bankruptcy attorney can help a debtor assess if they meet these and other requirements.

Benefits of Chapter 13 bankruptcy

Bankruptcy is a difficult process with burdens that debtors must endure. It can, though, help them eliminate their financial obligations and find strong financial footing. Chapter 13 bankruptcy in particular can help a debtor keep their property and continue to live their life as they work their way through their repayment plan. Though it may not be easy, bankruptcy can help individuals improve their futures and overcome difficult economic situations.


Kingcade & Garcia | A Miami Law Firm