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Who is eligible to file for Chapter 13 bankruptcy?

On Behalf of | Dec 3, 2020 | Chapter 13 | 0 comments

People in Kentucky purchase many different products and services. They also have many monthly bills which they must pay. They also may need to take out some loans in order pay for various bigger items. Between all of these expenses people may not have much room for extra costs. However, life is unpredictable and sometimes people are forced to incur additional debt or obligations due to unexpected events.

An example is a medical emergencies that may require extensive medical treatment. People may incur significant medical debt and miss time at work which may result in loss income in addition to the medical debt. This may result in people needing to begin using credit cards which leads to even more debt. Before people realize it they may have overwhelming debt and may feel like they will never be able to rid themselves of it. People may have options to rid themselves of the debt and one of those is Chapter 13 bankruptcy.

Eligibility requirements for Chapter 13 bankruptcy

Many people will in fact be eligible for Chapter 13 bankruptcy. People can still be working and do not necessarily need to be insolvent. Individuals unsecured debt just needs to be less than $394,725 and their secured debt must be under $1,184,200.

However, even if people meet the debt level requirements, if they have had a bankruptcy petition dismissed due to failing to appear, failing to follow orders, or it was voluntarily dismissed they within the previous 180 days they cannot file to bankruptcy. They also must go through credit counseling within the previous 180 days.

There are many people in Kentucky who find themselves in debt for many different reasons. Sometimes this debt becomes overburdensome though. This can create a very difficult situation for these people, but there are ways that people can free themselves of the burden. Chapter 13 bankruptcy is one of those options.