Boston Bankruptcy Attorneys

Eligibility for Chapter 13 Bankruptcy

To be eligible for Chapter 13, any debtor must meet a number of qualifications. The first part of determining eligibility for Chapter 13 bankruptcy is checking that the person filing is an individual and not a corporation or business. There are different types of bankruptcy for corporations and businesses.

Income and Debt Limits

A debtor filing for Chapter 13 bankruptcy must have a regular income. This income must be greater than a person's regular living expenses. In addition, there are requirements pertaining to how much debt a person can have. The maximum amount of unsecured debt that a person can have is $336,900. The maximum amount of secured debt is $1,010,650. An unsecured debt is something like a credit card; a secured debt may be something like a mortgage.

There are limits on the amount of debt a person can have, because the debt has to be paid back. It is unreasonable to expect a person to pay back loans in five years or even seven years if the amount is too high.

No Means Test

Unlike Chapter 7 bankruptcy, there is no means test. The means test in Chapter 7 bankruptcy determines if a person should really be filing for Chapter 13 bankruptcy. Something of an equivalent to the means test for Chapter 13 bankruptcy is the income requirement. The rules are set up in a way that ensures that the debtor doesn't take on ridiculously large payments to get out of bankruptcy.

Contact a Boston Bankruptcy Lawyer

If you are considering filing for bankruptcy, contact the Boston bankruptcy attorneys of Joshua Spirn & Associates at 1-800-975-5346 to discuss your situation today.