For a lot of debtors, Chapter 13 will be the preferred option for a couple of reasons. One of the main reasons why is that it allows debtors to keep their property without necessarily having to pay the creditors. It should be noted that not everyone is going to be eligible for Chapter 13 bankruptcy. In order to qualify for Chapter 13 under the bankruptcy code, a debtor must some requirements and they include:
Not a Business Entity
Individuals or those filing for joint bankruptcy like husband and wife are eligible to file for Chapter 13 bankruptcy. Businesses and corporations are not eligible and will be required to file for Chapter 11 instead. The exception is with commodity brokers that are eligible for Chapter 13.
There is No Prior Bankruptcy
You’ll automatically be ineligible for Chapter 13 if the debt was discharged in the last two years. You’re also not eligible if the Chapter 7 bankruptcy was discharged in the last four years.
Previous Bankruptcy Was Not Dismissed
It is not possible for a debtor to file for Chapter 13 bankruptcy if there was a previous petition that was dismissed in the last 180 days. It could be that the debtor violated a court order or failed to appear in court entirely. It is imperative that you’re getting a Dallas bankruptcy lawyer if you’re not sure of the course of action to take when you find yourself in such a predicament.
Debts Are Not Too High
There are limits imposed on how much can be filed as debt. Chapter 13 is only accessible to those debtors that have below $336,900 in unsecured debt. The debt limits are revised every year to account for changes that come as a result of inflation.
Filing For Income Tax Returns
In order to be eligible for Chapter 13, a debtor should provide evidence for filing for both state and federal taxes for the last four years. This should be done seven days prior to meeting the creditors for the first time.
Why You Should Hire a Bankruptcy Attorney
One of the main reasons why you should hire an attorney for your Chapter 13 bankruptcy is because they’re able to identify any potential hiccups that could arise and look for solutions before things can get out of hand.
There could be other ways of achieving financial peace other than bankruptcy. A good attorney will explore all the options before making the conclusive decision to opt for filing for bankruptcy.
Deciding on the bankruptcy to file: Both Chapter 13 and Chapter 7 are meant to accomplish specific goals. The attorney should start analyzing your needs carefully before recommending the course of action.
The Preparation Process
This will start by applying the means test in order to determine the kind of bankruptcy that you qualify for. A reputable attorney will use the unique circumstances to your advantage so as to get the best possible outcome regardless of the option. The exemptions will vary from one state to another and it is the work of the attorney to understand the rules so as to protect property. Filing without an attorney will be an unusual thing to do as you could end up losing more than what you had bargained for.
You’ll be required to file pages about your financial information such as debts, income, assets, and expenses. You’ll need to work closely with the attorney to know how much can be disclosed when it comes to financial information. Your testimony needs to be correct and accurate at the meeting of creditors as well as in court.
Getting The Right Attorney
As much professionalism will play an integral role in the selection process, it is also important that you’re working with someone that can be trusted. They’ll be honest about other alternative solutions if bankruptcy isn’t the only way out of the financial mess. It is crucial to have an understanding of all the possible solutions so that you’re not making a decision that you could end up regretting.
The attorney needs to be enthusiastic and passionately involved in the process. Such an attorney will not only be concerned about the money but providing quality legal representation. He or she should be attentive so as to understand your situation. Working with a local attorney will also come in handy as they’re likely to have a thorough understanding of jurisdiction laws and the various requirements for Chapter 13 bankruptcy.