Thursday, December 13, 2012
That's right. Not just anyone can file a chapter 13. First, only an individual (or unincorporated business) can be a debtor in a chapter 13. This precludes a corporation or partnership from filing this chapter of bankruptcy; they may have to look at either a chapter 7 or chapter 11.
Secondly, this chapter of bankruptcy requires you have regular income. How this income is defined changes from one jurisdiction to another, but for the purpose of this discussion, we will presume you have a job that pays you on a regular basis, or you have bills paid for you on a regular basis. That's right, if someone else is paying you bills on a regular basis, this will be considered income an may help you in your filing of your bankruptcy.
Next, we need to look at your level of debt. Did you know you can actually have too much debt to be able to file bankruptcy. According to section 109(e), your unsecured debts must be less than $360,475, and your secured debts must be less than $1,081,400. I know what you are thinking...where in the world did they ever come up with these numbers? These numbers are actually based on the consumer price index, and change periodically.
Some other things you should consider include whether you have previously filed a chapter 13. That is, if you previously filed a chapter 13 bankruptcy, how long to you have to wait in before being able to file another chapter 13 bankruptcy? An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e).
And just like filing a chapter 7, an individual must have received credit counseling from an approved credit counseling agency, either in an individual or group briefing, within 180 days before filing. See 11 U.S.C. §§ 109, 111. (Note: there are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling.)
So, there is a little more to filing an chapter 13 bankruptcy than you thought, isn't there? If you are thinking of filing a Chapter 13 (especially a chapter 13), you should seek the advise of a competent bankruptcy attorney in your area. Many attorneys offer free consults for people contemplating bankruptcy.