Filing Chapter 13 Bankruptcy

sarahheller By sarahheller, 22nd Jul 2011 | Follow this author | RSS Feed | Short URL http://nut.bz/y8v21ikc/
Posted in Wikinut>Money>Debt

Filing for bankruptcy is not a decision that should be taken lightly. For people who have been affected by the downtown in the economy and/or the recent drought conditions, however, filing for Chapter 13 may be a good option.

Chapter 13

If you’re considering filing Chapter 13, however, you must first figure out if you are eligible. In order to file Chapter 13, you must be an individual or married couple (corporations and business partnerships are not eligible for Chapter 13), have a steady income that is greater than what the judge will consider to be your reasonable living expenses, and have unsecured and liquidated debts not exceeding more than a total of $336,900 and secured debts not exceeding a total of $1,010,650.
The steady income can come from a business, a job, and/or pension and disability payments. Money from student loans and child support typically does not qualify. Alimony can qualify towards this requirement in some states. Secured debts are defined as those that are backed with an asset such as a car loan or a mortgage. Unsecured debts are not backed by an asset, such as credit card debt or medical bills.
It is also important to remember that individuals can only get a discharge in Chapter 7 every 8 years. This was recently increased from seven years with the 2005 bankruptcy federal bankruptcy law amendments. You can, however, file a Chapter 13 bankruptcy even if you got a Chapter 7 discharge four years ago. Because of this rule, it is common to file Chapter 7 bankruptcy to get rid of those debts that are dischargeable, and then immediately afterward file a Chapter 13 bankruptcy to repay any remaining debts that were not discharged in the Chapter 7.

Tags

Bankrupt, Bankruptcy, Chapter 13

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Comments

author avatar Neha Dwivedi
24th Jul 2011 (#)

great info....thanks for sharing,,,

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