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Is chaper 13 bankruptcy always an alternative of Chapter 7 bankruptcy is not eligible?
Is it true that if I can’t file Chapter 7 bankruptcy, that I can definitely file for Chapter 13 bankruptcy?
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Answers (1)
This is not true. Some people who make too much money or have too much equity to qualify for a Chapter 7 bankruptcy do not make enough money for a Chapter 13 repayment plan. In order to qualify for a Chapter 13 bankruptcy, an individual needs to have a source of steady income and also has to have expenses that are reasonable enough to leave enough income in order to pay every month into a repayment plan to pay a portion of the debt owed to the creditors.
Therefore, if an individual is not employed and has a house that is all paid off in a state that does not protect 100% of equity in a bankruptcy, that individual will not be able to file either a Chapter 7 or Chapter 13 bankruptcy unless he has some way of gaining a certain amount of income every month or is willing to give up his property.
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Posted by Marina Ricci on 22 Jan 2010