Chapter 13 FAQ’s
Under some bankruptcy laws there are certain ways in which a business owner can file for bankruptcy as an individual and still maintain his or her business. Not only can business continue, certain individuals can keep certain assets like their home. Chapter 13 bankruptcy can allow for all of these things to happen in an individual meets the law’s strict qualifications.
In order to qualify for Chapter 13 bankruptcy:
An person must be filing as an individual and not as a small business or corporation. If an individual would like to file for bankruptcy under the name of their business entity they must instead file for Chapter 11 which is reserved for businesses.
The amount of debt accrued by a debtor must not exceed the monitory limits set. These limits are adjusted frequently. For the most up to date limits you can refer to the official US Courts website.
The individual petitioning the court has not already, within the last 180 days, petitioned for Chapter 13 and been denied their claim for any number of reasons. These could include failure to appear in court or failure to comply with court ordered instructions.
The debtor must have undergone credit counseling with a qualified and approved debt counselor within 180 days of their petition.
Once the individual has worked out a payment plan and strategy with their debt counselor, it must be approved and filed with the court.
Again, the most attractive benefit of filing for Chapter 13 rather than Chapter 7 is that a person is afforded the opportunity to keep their home from being foreclosed upon. By working with the court and their debt counselor the debtor is allowed to continue making payments towards the mortgage while other debts are forgiven.
For the most up to date eligibility guidelines for filing for any form of bankruptcy, you can visit the official US Courts Bankruptcy website here.
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