What Are the Requirements for Chapter 13 Bankruptcy?

gavel with paperwork

You may know for certain that you have racked up enough consumer debt that constitutes a consumer bankruptcy filing. But your uncertainty may lie with which type to pursue. Namely, Chapter 7 or Chapter 13 bankruptcy. With this, it is not so much deciphering which to choose but rather understanding which you are eligible for. With that being said, please continue reading to learn the requirements for filing for Chapter 13 bankruptcy and how an experienced Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you fulfill every last one.

Do I qualify for Chapter 13 bankruptcy in the first place?

As the debtor of a Chapter 13 consumer bankruptcy case, you may be expected to pay off your outstanding creditors in a court-ordered, three- to five-year repayment plan. You may be drawn toward this bankruptcy type, as you may believe it is more honorable to pay off your debts rather than having them discharged from your immediate responsibility. But again, it is not necessarily in your authority to select the Chapter 13 bankruptcy option.

In reality, you must prove to the New York State bankruptcy court that you receive a regular, substantial income; whether from wages, self-employment commissions, pensions, Social Security benefits, or otherwise. This is to confirm that you have the financial capability to keep up with a repayment plan. What’s more, you must show that your total secured and unsecured debts are less than $2,750,000. Lastly, you must demonstrate that you have filed all required New York State and federal income tax returns for the four years prior to your bankruptcy petition.

What are the requirements for filing for Chapter 13 bankruptcy?

Once you confirm that you meet all the eligibility criteria for Chapter 13 bankruptcy, you may proceed forward with filing the petition. With this, you may be expected to meet certain requirements and overall follow the below steps:

  1. Attend and complete a Department of Justice-approved credit counseling course.
  2. Gather relevant financial documents that take inventory of your assets and debts.
  3. Consider your income and create a repayment plan proposal for the court to approve.
  4. Submit your bankruptcy petition, financial documents, and repayment plan proposal to the court.
  5. Attend a 341 meeting of creditors and answer questions posed by your bankruptcy trustee and creditors.
  6. Attend a confirmation hearing to learn the court’s approved three- to five-year repayment plan.
  7. Make monthly repayment plan payments to your trustee who will then distribute them to your creditors.
  8. Attend and complete a debtor education course so you may not have to file for bankruptcy again.
  9. Patiently await for the court to discharge your eligible debts and close your bankruptcy case for good.

There is a lot to consider before pursuing a Chapter 13 bankruptcy filing. To help you make the right considerations, please consult with a skilled Rockland County bankruptcy attorney. Our team at The Law Offices of Allen A. Kolber, Esq., P.C. will guide you toward the best decision.