3 Requirements Necessary To File For Chapter 13 Bankruptcy

When your debts get so bad that you think that there is no way that you can get out from under them, you may think that it's time to file for bankruptcy. There are different kinds of bankruptcy that you can file for. One is Chapter 13. But, how can you tell if you qualify to file for bankruptcy Chapter 13?

Private Individual

For Chapter 13, you have to file as a private individual. You and your spouse may file together, but not under any kind of business name. If you have a business that is a sole proprietorship, you can file for bankruptcy, but you can only claim the debts you are liable for personally, not anything from the business. 

Sufficient Income

When you file for Chapter 13 bankruptcy, you have to prove that you have enough income to pay all your creditors off after the judges approves your bankruptcy. That amount has to come after your living expenses have been paid, including any secured debts like your mortgage payment, rent, or car payments. Your bankruptcy repayment plan will have to include plans to pay your creditors back fully, so the judge will want to see pay stubs, records of freelance work, proof of Social Security benefits, child support payments, or unemployment benefits. When income is counted, it doesn't mean just what you, yourself, earn. It includes income from a spouse. For example, if you, as an unemployed person, want to file for bankruptcy without your spouse, you can count your spouse's income on your bankruptcy papers.

Tax Status

You also have to be current on all your income tax filings in order to file for Chapter 13 bankruptcy. When you file, you will have to give proof that you have filed and are completely current. Not only will you have to show proof of filing for the current year, but also for the previous four years. You will have to show that not only for your federal income taxes but also for your state income taxes if your state requires income taxes. 

If you feel that you qualify for Chapter 13 bankruptcy, you need to speak with a lawyer so they can help you file for it. A lawyer like Hoffman, Hamer & Associates, PLLC will be able to help you with setting up a bankruptcy repayment plan, and will go with you when your application goes before the judge for the final approval.