Chapter 13 Reorganization

Chapter 13 bankruptcy is the most commonly used of all the bankruptcy chapters.  Unlike Chapter 7 Bankruptcy, under Chapter 13 of the U.S. Bankruptcy Code, no liquidation applies.  In Chapter 13 reorganization, an individual is given an opportunity to repay all their debts as outlined in a tightly controlled budget plan.  The budget plan is overseen by a trustee appointed by a bankruptcy court.

To be eligible for this kind of bankruptcy, you must:

• Be an individual. Businesses cannot file for bankruptcy under Chapter 13.
• Be up to date with your tax returns. You’ll need to show the court that you’ve properly submitted your tax filings for each of the last four years.
• Have sufficient disposable income. The court will need to see evidence that you have enough income to pay your allowed monthly expenses, plus the payments you’re already required to pay on secured debts (such as car loans and mortgages), andyour repayment obligations under your Chapter 13 plan.
• Not have debts that are too high. To qualify for Chapter 13, the total sum of all your secured debts cannot exceed a certain amount (contact us for the amount as it adjusts for inflation).
• File in good faith. You should have all the right intentions to follow the repayment plan as it is (and not to commit any fraudulent activities, like misrepresenting your income).