When you’re consumed by debt and are having a difficult time with repayment plans, Chapter 13 bankruptcy could be a good option for you. Unlike Chapter 7 bankruptcy, which liquidates your assets and charges off excess debt, Chapter 13 is a form of bankruptcy where you’ll be able to keep your assets and some income while you work to repay your creditors.
You will formulate a plan of repayment that describes how you will continue paying off your debts within a three-to-five-year period. Not everyone qualifies for Chapter 13, however. Below, we discuss the requirements for Chapter 13 approval, and why credit counseling is included in the approval process.
Qualifying for Chapter 13
In order to qualify for Chapter 13 bankruptcy, you’ll need to be employed and have a steady income. This will allow you to formulate and fund a feasible repayment plan.
Also, your total accumulated debts cannot exceed $394,000, and you will need to submit a disclosure statement that describes your income, debts, assets, expenses, and other relevant financial affairs, along with a copy of your most recent tax return.
In addition to, you cannot file a Chapter 13 until you’ve completed credit counseling within the past 180 days.
Why Credit Counseling Is Required
Before you declare Chapter 13, one major requirement is to complete credit counseling. You’ll need to obtain your certificate of completion from an agency that has been approved by the Office of the United States Trustee Program.
Credit counseling is required to provide you the opportunity to explore avenues other than bankruptcy to clear your financial slate. Only applicants with physical and mental disabilities, or those on active duty with the military are exempt from this requirement. Once your credit counseling has been completed, you will submit your certificate of completion to the courts when filing your Chapter 13.
Contact an Indiana Chapter 13 Lawyer
If you’re considering personal bankruptcy as an option to rid yourself of excessive debts that you haven’t been able to control, reach out to an Indiana Chapter 13 lawyer at Rowdy G. Williams Law Firm. You can schedule your initial appointment today by filling out the quick contact form below or by calling our office directly at 1-812-232-7400.