Chapter 13 of the US Bankruptcy Code allows persons who earn a regular income or earn more than allowed under the Chapter 7 means test to restructure their debts, retain assets, while still being able to discharge potentially a large portion of their unsecured debt. Through your bankruptcy petition, our Florida bankruptcy attorneys will propose a plan to repay creditors over a three to maximum of five year period. 11 U.S.C. §1322(d). The eligibility to extend the payment plan out to five years is based upon the debtor's income. In most cases, if the debtor makes more than the median income for their state, the debtor's plan must be for five years.
The restrictions on filing a Chapter 13 are significantly less than filing a Chapter 7. Currently, a person, individually or as a sole proprietor, may file so long as the filing includes unsecured debts less than $336,900 and secured debts are less than $1,010,650. 11 U.S.C. § 109(e). As with all bankruptcy filings, a person is not eligible to file if within the last 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). Under 11 U.S.C. §§ 109, 111, a party must also receiving credit counseling from an approved credit counseling agency within the last 180 days before filing. There are rare exceptions under which this provision can be waived, but the great majority of filers should plan on attending the class either in person or on the internet prior to filing.
Debtors must have filed taxes through the most recent year and must have no outstanding tax returns to the IRS. A debtor may owe the IRS money in back taxes however, and sometimes those taxes can be discharged at the end of a Chapter 13 petition.
Please click below to learn more about:
