Eligibility requirements filing for bankruptcy under Chapter 13
Filing for bankruptcy may be an option for Florida residents looking for a way to stop debt-related lawsuits. Chapter 13 bankruptcy can stop wage garnishments and repossessions while allowing debtors to reorganize their obligations through a manageable payment plan. As a general rule, as long as a person makes the payments as required, creditors cannot pursue collection proceedings.
Individuals who have a regular source of income are eligible to file for bankruptcy protection under Chapter 13, but there are limits to how much debt a person can have and still qualify. Every three years, there are increases or decreases to the dollar amounts based upon changes in the Consumer Price Index. As of April 1, 2016, an individual debtor cannot have unsecured debt in excess of $394,725. Secured debt cannot exceed $1,184,200. The debt limit for owners of small businesses is an aggregate of secured and unsecured debt of $2,256,050.
The automatic stay of court actions and collection efforts by creditors is issued by the bankruptcy court upon the filing for bankruptcy by the debtor. The stay can stop foreclosure actions at least temporarily. The repayment plan must be approved by the court, and it will last from three to five years.
As good as Chapter 13 might appear to be, it might not be suitable for everyone. Apart from the eligibility requirements that must be met, other options might be more appropriate depending upon the particular circumstances of the debtor. An lawyer can outline other forms of debt relief that might be available.