Do You Qualify to File Chapter 13 Bankruptcy?

Chapter 13 Qualification Basics

To qualify for a Chapter 13 Bankruptcy, which is a repayment plan of your debt, you must meet the following basic requirements:

1. Must have regular income.

This can include wages, salaries, self-employment income, or other sources of income. Sometimes, this also includes a steady contribution of a fixed amount by a family member or other individual, who wants to help a Debtor with their Chapter 13 Plan payments. The third party who volunteers to contribute to your monthly income, must show proof of income themselves, as well as sign a Declaration indicating their willingness and amount they will contribute.

2. Debts must meet limits.

As per the most recent increase in debt limits, and until April 2025, unsecured debt in a Chapter 13 case cannot exceed $465,275 and secured debt cannot exceed $1,395,875. Typically, unsecured debt consists of credit card debt, medical bills, judgments, personal loans that are not secured by any collateral, etc. Secured debt, on the other hand is debt that is secured by collateral, such as a mortgage on a home, a car loan, debt on furniture, etc. Note, that there are no debt limits in Chapter 7 or Chapter 11 cases.

3. Prior Discharge Limitations.

In order to obtain a discharge of unsecured debt after the completion of the Chapter 13 payment plan (which can take between 3-5 years), you must not have received a discharge in a Chapter 7 Bankruptcy within the last 4 years, or in a Chapter 13 bankruptcy within the last 2 years.

Remember the 2-4-6-8 Rule of Filing Bankruptcy Again

• 2 Years between a prior Chapter 13 bankruptcy discharge (completed the payment plan) and a new Chapter 13 case

• 4 Years between a prior Chapter 7 case and a new Chapter 13 bankruptcy

• 6 Years between a prior Chapter 13 bankruptcy and a new Chapter 7 case. There are some important exceptions to this rule, depending on how much of your debt you repaid in your first Chapter 13 case before filing the Chapter 7 case.

• 8 Years between a prior Chapter 7 case a new Chapter 7 bankruptcy.

4. No Pending Bankruptcy Cases.

A bankruptcy petition is filed under the federal laws. Therefore, you cannot have any other bankruptcy cases pending in any other courts across the country, if you want to file a new case.

5. Complete a Credit Counseling Course.

Within 180 day prior to filing a bankruptcy voluntary petition, you must have completed a credit counseling course from an approved agency, and obtained a certificate of completion. Your bankruptcy lawyer will need to include that certificate with the initial filing of your papers with the court.

Talk to a Bankruptcy Lawyer Near You.

Remember, the above are just a few of the basic requirements to qualify for filing a Chapter 13 debt repayment Plan. There are other important legal and financial criteria that will determine qualification to file, and the successful outcome of your case.

A chapter 13 bankruptcy is ultimately an opportunity to repay debt but in an organized and controlled fashion. The famous “automatic stay” of the federal bankruptcy laws will also be in effect, giving you peace of mind that your creditors cannot sue you for debt you incurred before the filing of the case.

Based on your monthly budget, your household income, and non-exempt assets, you may qualify to propose a Chapter 13 Plan that offers to repay a percentage of your unsecured debt (credit card, medical bills, personal loans, etc).

An experienced bankruptcy lawyer can help you determine whether you qualify for a Chapter 13 bankruptcy in your area. It is helpful to hire a lawyer who is not reluctant to 'hold your hand' during your bankruptcy case, and who you 'click' with.

Free Bankruptcy Consultation.

Most bankruptcy attorneys offer free consultations to determine whether you are a good fit for each other, and whether you even qualify for bankruptcy.

Nikki Hashemi, Esq. offers telephonic, virtual Zoom, and in-person appointments for her clients who are drowning in debt and want to consider their options.

Holding the client's hands during the bankruptcy process is what she prides herself in, and is dedicated to help her clients achieve a successful discharge and/or repayment of the debt. She proudly and confidently serves clients located in all of Ventura County (Camarillo, Moorpark, Thousand Oaks, Newbury Park, Simi Valley, Ventura, Oxnard, etc.) as well as clients located in the San Fernando Valley of Los Angeles County (Agoura Hills, Calabasas, Woodland Hills, Granada Hills, Northridge, Canoga Park, Mission Hills, Panorama City, Porter Ranch, etc.).

Nikki can be reached at 805-424-3131 or book your free consultation online at this LINK.

Be sure to subscribe at www.interplaylegal.com to get stay up to date with our Blog posts. At Interplay Legal Solutions Inc., Nikki Hashemi, Esq. represents Chapter 7 and Chapter 13 Bankruptcy clients, as well as young families with Estate Planning needs.

Mandatory Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established by mutually signing a retainer agreement.

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