Prerequisites for Chapter 13 Reorganization

Chapter 13 reorganization helps many debtors get a handle on unwieldy debts. When debt starts consuming your life and gnawing at you daily, it is time to do something to change the situation. You can get professional help dealing with your financial affairs and setting yourself up for a better financial future.

Chapter 13 Prerequisites

Chapter 13 bankruptcy is a form of reorganization. Through a Chapter 13, you will create and follow a repayment plan which is under the discretion of a bankruptcy court or trustee. Chapter 13 reorganization can only be used by individual debtors. Many of the individuals who file Chapter 13 do so because they did not meet income or asset requirements for filing a Chapter 7 bankruptcy.

When you file for Chapter 13, a bankruptcy court will consider your income, debt and assets to determine your minimum debt payments. A portion of many of your unsecured debts will be discharged in most cases. This can be fifty or more percent of your debt in some cases, providing extreme relief for individuals who have been struggling living month to month.

To qualify for a Chapter 13 reorganization, your income must be sufficient to pay off some of your debts, but it cannot be so high that you should be able to find means of repayment other than bankruptcy. There are limits to the amount of assets and debts you can have. Discuss specific income and asset maximums with an experienced attorney who can provide you state specific information and current law.

You must go through credit counseling from an approved organization before you can file for Chapter 13. Upon completion of a certified course, you will be given a certificate to file with a bankruptcy court and you can then begin your case. Once the proceedings are finalized, you will generally be given a three to five year time line in which to repay your debts. Your case will continue to be watched over by the court until you have completed payments.

Getting Legal Help

An attorney who regularly handles Chapter 13 reorganizations can help you assess whether you will meet state specific income requirements. Getting a professional to review your financial situation with you can greatly relieve some of the anxiety you face about your overwhelming debts. An attorney can help you figure out whether bankruptcy can help you and you can ask all of the questions that have been going through your head in confidence.