Any individual living in the United Sates with a steady income can file a Chapter 13 bankruptcy, also known as a wage earner repayment plan. Your income, though, doesn’t necessarily have to come from wages earned from a job, as the name implies. Income can also come from pensions, Social Security, and even government benefits like welfare. Keep in mind that there’s a debt limit to filing Chapter 13. The total amount of your unsecured debts, like credit card accounts and medical bills, and the total amount of your secured debts, such as mortgages and car loans, may not exceed the limits imposed by Chapter 13 bankruptcy laws. If you’re married and both spouses are liable for the same debts, you can file for Chapter 13 together or separately. The cost is the same if you file by yourself or if you file jointly with your spouse. If you’re the owner of a small, unincorporated business, you have the option of selecting this chapter as well. Corporations and partnerships, however, are prohibited from filing under this plan, but can choose to file a Chapter 11 business reorganization bankruptcy instead. Stockbrokers, commodity brokers, and individuals who’ve had a bankruptcy filing dismissed for cause within the last 180 days aren’t eligible to file Chapter 13 either. In addition to meeting the basic eligibility requirements, be aware that you’ll be required to make regular payments to a trustee throughout the entire duration of your case. Thus, even if you’re eligible to file a Chapter 13 bankruptcy, make sure you also have the discipline required to make it successful. Furthermore, since your debts aren’t eliminated in a Chapter 13 bankruptcy, you’ll need to have the desire to pay some or all of your debts.
