Qualifying for Chapter 13 Bankruptcy in California

This week we discussed how you must pass the means test in order to qualify for Chapter 7 liquidation bankruptcy in California. But what are the requirements to qualify for Chapter 13 redistribution bankruptcy? Let’s take a closer look.

In order to petition forĀ Chapter 13 bankruptcy:

• You must not have a recent prior bankruptcy. You may not file for Chapter 13 bankruptcy if you have filed for Chapter 13 bankruptcy in the last two years or if you have filed for Chapter 7 bankruptcy in the last four years. You may also not file for Chapter 13 bankruptcy if you have had a prior bankruptcy dismissed for certain reasons within the last 180 days.
• You must be an individual. Businesses may not file for Chapter 13 bankruptcy – only individuals, couples, and families.
• You must have a significant amount of disposable income. Chapter 13 bankruptcy involves a payment plan that helps you eliminate your debt. In order to participate in a payment plan, you must prove that you have enough money coming in monthly to make these payments – whether through wages, Social Security, retirement benefits, pensions, or other sources of income.
• You must provide four years of tax returns. Before filing for Chapter 13 bankruptcy, be sure that you are current on the last four years of both state and federal income taxes.
• You must have completed credit counseling. All people filing for bankruptcy must complete credit counseling and provide proof of that counseling within 180 days of filing for bankruptcy.

If you are still unsure whether you qualify for Chapter 13 bankruptcy, or if you are unsure if bankruptcy is the right choice for you and your family, California bankruptcy attorney Kerry Denton can help. Call 619-458-3739 today to schedule an appointment with a lawyer in our Chula Vista law office.

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