The 3 Requirements for an Individual to File Chapter 13 Bankruptcy
I’ve stated in previous posts that there are requirements that must be met for an individual to file a petition for debt reorganization under Chapter 13 of the Federal Bankruptcy Code. Today, I’m going to tell you what those requirements are as well as offer a bit more information about what this filing does.
First, you should understand that a Chapter 13 bankruptcy is for individuals only. Corporations and partnerships cannot file for this kind of relief. That said, there are 3 basic requirements that must be documented in order to qualify:
1. The person’s unsecured debts must be less than $336,900.
2. The person’s unsecured debts must be less than $1,010,650.00.
3. The individual must have spoken with an approved agency within the past 180 days.
Those are all the basic requirements and there’s a good reason that the qualification is a simple process. Unlike a Chapter 7 bankruptcy, this protection won’t discharge an individual’s debts. Instead, a trustee assigned to your case by the court will negotiate with your creditors to arrange new terms for payment of what you owe. Once the plan has been approved and the petition granted, the person who filed is responsible for making payments directly to the trustee and distribution of the funds to the creditors takes place through the court.
Another important point to realize about legal debt reorganization is that there may be serious consequences for failing to meet your payment obligations as arranged by the court. If you default and fail to contact the trustee, your case may eventually be dismissed and the payment arrangements can be voided. It is vitally important to contact your trustee if circumstances arise that prevent you from making your scheduled payments. Often, a payment plan may be modified to allow you time to catch up on your payments. In extreme cases, you may apply for a hardship discharge or your bankruptcy may be converted to Chapter 7. The point is, it’s extremely important to make your payments or contact the court.
As you can see from the way it’s structured, Chapter 13 is designed to provide an opportunity for those who qualify to manage their debts, rather than canceling them. It’s a good alternative in some cases. It may also provide an alternative for individuals who need relief, but don’t qualify for Chapter 7 or have debts that can’t be discharged, such as tax payments or student loans. A reputable bankruptcy attorney can help you determine whether debt reorganization is the best choice for your financial situation.
Keep in mind that there are many other means of debt relief available that don’t involve filing for bankruptcy. If you’re struggling with debts that you can’t manage, contact accomplished COLTON BANKRUPTCY LAWYER Jeff Larkin. To seek advice from SAN BERNARDINO BANKRUPTCY ATTORNEY Jeffrey Larkin, call 877.25.NEW.HOPE for a free consultation today or visit his BANKRUPTCY ATTORNEY IN CARLSBAD CA Google+ Local page.
For more details, Please visit our website: https://larkinfirm.com