To qualify for Chapter 13 bankruptcy in Schaumburg, you must first meet several individual criteria. Because Chapter 13 bankruptcy involves a “payment plan” structured so you can repay your outstanding debts over time, federal bankruptcy courts only offer this option to those most likely to succeed.
Requirements for Filing Chapter 13 Bankruptcy
The most basic requirements for filing a Chapter 13 bankruptcy case include:
- Being an individual: Chapter 13 bankruptcy only allows individuals to file a case. Any business or other entity is excluded from seeking legal relief under Chapter 13.
- Having a steady income: The entire purpose of Chapter 13 bankruptcy is to allow individuals to repay past-due debts while still holding onto their most important assets, such as their cars and homes. Typically, the structure of a Chapter 13 bankruptcy payment plan involves making your regular monthly payments plus an additional payment or payments, so you must have a reliable income throughout your entire bankruptcy proceeding.
- Filing your taxes: Federal bankruptcy courts will not allow you to open a Chapter 13 case without proof of past tax returns. To qualify, you must provide copies of at least the past four years worth of both state and federal income tax returns.
- Having debt within the legal limitations: Chapter 13 bankruptcy is only an option for individuals whose debt is less than the federally established limitations. These limitations, which are set by the government and change every three years, help disqualify potential filers who could not realistically pay back their debts over their remaining lifetime. Beginning April 2019 and ending April 2022, the Chapter 13 debt limitations are $419,275.00 of unsecured debt and $1,257,850.00 of secured debt.
Contact Our Schaumburg Law Firm
If you have additional questions about filing for Chapter 13 bankruptcy in Schaumburg, our knowledgeable attorney can assist you. Give us a call at (847) 845-9477 to retain Mr. Robert M. Kaplan and get answers to your case’s most important questions.