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  • The basics of filing a Chapter 13 Bankruptcy

    The two most common forms of bankruptcy are Chapter 7 and a Chapter 13 bankruptcy. Depending on your financial circumstances, income, assets and other related issues, you may only qualify for Chapter 13 and not Chapter 7. Chapter 7 is reserved for people with few assets and little or no income. It discharges unsecured debt such as credit cards.

    On the other hand, with a Chapter 13 bankruptcy, filers work out a restructured payment plan and then repay their debts over a three to five year period, sometimes at a discount, to a trustee.

    While this is more challenging, the good news is that with a Chapter 13 bankruptcy, you get to keep all of your property. With a Chapter 7 bankruptcy, you may be forced to sell part of your non-exempt possessions to satisfy your debts.

    Chapter 13 bankruptcy requirements

    You must meet several requirements to qualify to file a Chapter 13 bankruptcy:

    • This type of bankruptcy is available only to individuals and couples.
    • If you are a business owner, you can still file a Chapter 13 bankruptcy, but only your personal debts will be discharged. Any business debts you have will remain separate and intact.
    • You must be able to show a regular stream of income so that you will be able to make regular payments to the trustee handling your bankruptcy. If you don’t have a regular stream of income, your bankruptcy plan will probably not be approved.
    • Secured debts, such as car payments and mortgage payments have a ceiling. When they are combined, they cannot exceed $1,149,525.
    • Unsecured debts, such as credit card debt, loans, taxes and medical bills also have a cap on them which cannot exceed $383,175.
    • Stock or commodity brokers are not allowed to file Chapter 13 bankruptcy under any circumstances.
    • Paying taxes, alimony and child support are considered priority debts in a Chapter 13 filing and must be repaid in full as part of your plan.

    The Hixson Law Firm serves clients in Mansfield, Arlington, Grand Prairie and other nearby Texas communities.

    • File Chapter 13 Bankruptcy
    • hixson_admin Jan 11 2018
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