Are you eligible for Chapter 13?
Three is the magic number in Chapter 13 bankruptcy
eligibility. The requirements are:
- Individuality. Corporations need not apply.
- Regular income, hence the nickname "wage
- Being under the allowed debt limits. As of
April 2004, it's $290,525 of unsecured debts -- such as credit
card debt and medical bills, not tied to an asset -- and $871,550
of secured debt -- those tied to an asset that can be repossessed
or foreclosed upon, such as a house or car. The limits change
April 1 each year.
Additionally, in some cases Chapter 7 bankruptcy filers
may be forced to choose Chapter 13 instead. Under a bankruptcy code
known as an abusive filing, surplus income can cause a Chapter 7
case to be dismissed or converted to a Chapter 13, explains attorney
Michael J. O'Connor, who has handled thousands of bankruptcy cases.