Are you confused whether you can file for Chapter 13 bankruptcy or not? Get debt relief right away. BK lawyers help clients find attorneys today. Lots of debtors, feel Chapter 13 bankruptcy is a good option. But not everyone falls into the category of Chapter 13 bankruptcy. Seek information of who all can file for Chapter 13 bankruptcy. However, Chapter 13 Bankruptcy is not for Businesses.
A sole proprietorship or partnership, cannot file for Chapter 13 bankruptcy in the name of that business. Businesses can be tried for Chapter 11 bankruptcy when they need to release their bad debts.
In order to fall into the category of Chapter 13, you must have sufficient disposable income. This is to show the bankruptcy court that you will have enough income, after subtracting certain allowed expenses and required payments on secured liabilities (such as an education loan or car mortgage), to meet your repayment plans. Your obligations must pay back certain debts in full, or the judge will not approve it and allow your proceedings.
As a business owner, however, you are an individual who can file for Chapter 13 bankruptcy. In your Chapter 13 bankruptcy case you can incorporate business-related debts which are personally liable by you. Exceptions to this rule are that the Stockbrokers and commodity brokers cannot file a Chapter 13 bankruptcy case, even if it is for their personal (non-business) debts.
You can use the income from the following sources to fund a Chapter 13 plan:
Commissions from your targets reached
Seasonal work salary
Social Security benefits
Unemployment benefits, strike benefits and other benefits
Child support or alimony you receive
Property sale proceedings from primary business
If you are married, it is not mandatory that your income is “yours.” As a source of income nonworking spouse can file alone and use money from a working spouse. And an unemployed spouse can file jointly with a working spouse.
Your Debts Must Not Be Too High
You do not qualify for Chapter 13 bankruptcy if your secured debts exceed $1,185,000 adjusted regularly according to inflation. Home loans and car loans are examples of secured debts which you are liable to lose if you don’t repay the creditor. But a debt might also be secured if a creditor has filed a notice of claim against your property like IRS.A creditor does not have a right to take unsecured property. Credit card debts, medical and legal bills, back utility bills, and department store charges are all unsecured debts.
Documents required for submission for chapter 13 lawsuits are proof that you filed your federal and state income tax returns for the four tax years prior to your bankruptcy filing date. Your Income Tax Filings must be up to date. If you need some time to get up to date on your filings, the court can postpone the proceedings. Ultimately, however, if you don’t produce your tax return bills of the returns for those four years, your Chapter 13 case will be dismissed.