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Do you qualify for Chapter 13 bankruptcy?

If you are considering filing for bankruptcy, you may wonder which Chapter best fits your situation. There are stark differences between Chapter 7 and Chapter 13, for example, which will affect how much debt you will retain once the bankruptcy closes.

If you wish to restructure some of your debts as opposed to discharging them, you may be interested in filing for a Chapter 13. Because not everyone can file for this type of bankruptcy, you must qualify to do so.

Chapter 13 requirements

According to FindLaw, you must meet the following requirements to file for a Chapter 13 bankruptcy:

  • You are not filing for bankruptcy as a business entity
  • You are not ineligible due to a previous discharge
  • A court has not dismissed a bankruptcy case for you in the last six months
  • You have evidence of completing credit counseling
  • Your total debt amount falls below the threshold to file a Chapter 13
  • Your restructuring plan addresses repayment of all required debts

Unlike with a Chapter 7 bankruptcy, there is no income test to qualify for a Chapter 13.

Chapter 13 benefits

One of the main benefits of filing for a Chapter 13 bankruptcy is that you have the opportunity to repay most of your debts by reorganizing them. This means that you may receive some of the benefits of Chapter 7, like a lower interest rate or overall repayment amount, but it will not stay on your credit report for as long.

Another reason you may want to file for Chapter 13 is that you do not have to liquidate your assets to repay your debts like you would during Chapter 7.

It is important to review your situation and understand the benefits and qualifications for filing this type of bankruptcy.


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