While no one relishes the idea of filing for bankruptcy, it may be the best option to get out from suffocating debt. Chapter 13 bankruptcy is a type of bankruptcy that many debtors use. However, to file under Chapter 13, you will first need to find out if you meet standards to qualify for Chapter 13 bankruptcy.
Difference Between Secured and Unsecured Debt
Unlike secured debts, unsecured debts are not secured by property. This means that creditors cannot take property away from you to satisfy debts. Common examples of unsecured debts include:
- Medical fees
- Lawyer fees
- Credit card bills
- Utility fees
- Student loans
Secured debts are tied by way of liens to property which creditors can seize as payment for debt.
Who Qualifies for Chapter 13?
According to United States Courts, if your unsecured debt totals less than $394,725 and your secured debt is no more than $1,184,200, you may qualify for Chapter 13. These amounts may be adjusted due to inflation.
Businesses cannot use Chapter 13. Similarly, a corporation or a partnership also may not file under Chapter 13. If you own a business, you can file under Chapter 13, but you can only include business-related debt for which you are personally liable in your petition.
Keep in mind that 80 days before filing your petition, you must complete an approved credit counseling course.
Stipulations for Chapter 13 Filings
There are a few reasons why you would not be able to file for Chapter 13 bankruptcy. For example, you cannot file for Chapter 13:
If you had a previous bankruptcy petition dismissed due to failing to appear before the bankruptcy court or did not comply with its orders
If you chose to have a prior case dismissed after your creditors sought relief from the bankruptcy court to claim property on which they held liens
How a Bankruptcy Attorney Can Help
No matter what chapter you plan to use, filing for bankruptcy without the help of an attorney can be daunting. A bankruptcy attorney can help you avoid costly mistakes on your petition, so consider approaching experienced counsel for your filing.
If you have any questions about bankruptcy or want to speak with one of our Monmouth County bankruptcy attorneys, contact us today. You can call us at (732) 358-2028 or fill out our online form and someone from our office will be in touch with you shortly.