There are different types of bankruptcy and that means that there are different types of criteria that have to be met before you decide to file for a certain kind of protection. A Rockland County Chapter 13 bankruptcy lawyer from our firm can tell you everything that you need to know about Chapter 13 bankruptcy. They can also tell you if it’s a good option for you in your current situation.
How Do I Qualify For Chapter 13 Bankruptcy?
There are a few primary qualifications for Chapter 13 bankruptcy filers. You must:
Be up-to-date on tax filings: To be more specific, you must have at least four years of tax filings with the state and federal government before your bankruptcy filing date. If you file for bankruptcy before you get caught up on your taxes, then the court might dismiss your bankruptcy case before you can get your documents in order.
Meet certain income requirements: When you file for Chapter 13 bankruptcy, you make an agreement to pay back creditors. You need to form a payment plan that they agree to and you need to have enough income to actually make payments on this plan.
Not have more than a certain amount of debt: This type of filing is only for people who have under a certain amount of debt. For cases that will be filed between now and March 31, 2025, that’s $1,395,875 of secured debt and $465,275 of unsecured debt. If you owe more than that, Chapter 13 bankruptcy isn’t for you.
Why File For Chapter 13 Bankruptcy?
Filing for Chapter 13 bankruptcy is appealing for a few reasons. First, it stops collection actions from creditors. So they cannot call you about collecting, garnish your wages, or take any other actions unless a court lets them.
You also are not forced to sell off assets during this type of bankruptcy. Chapter 7 requires liquidation. Instead, you make a payment plan and you pay off creditors over time. You also usually end up negotiating the amount of debt owed down too, so you’ll have less to pay before your creditors consider your account satisfied.
Can a Business File For This Type of Bankruptcy?
No, this type of filing is for individuals. However, someone who is running a business on their own as a sole proprietor may prefer this type of bankruptcy to Chapter 11. A lawyer can advise you on the best option.
How Long Does Bankruptcy Take?
These cases can take a few months to settle after you have filed all of the required paperwork. Then you have your payment plan, which takes three to five years to complete once it has been negotiated. So don’t expect to be free from debt in a few weeks or months.
Contact Our Bankruptcy Lawyers
If you want to learn more about filing for bankruptcy, contact the Lauterbach Law Firm. We can help you see if you qualify for this kind of filing.
