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Am I eligible for Chapter 13 bankruptcy?

For those in Essex and throughout the state who are facing financial problems, it can often seem like there is no light at the end of the tunnel and no way out. Not wanting to put forth the impression that they are shirking their responsibilities by even considering the prospect of bankruptcy, they continue to struggle without looking at options to get a fresh financial start. While some might believe there are negative connotations to the mere mentioning of the word "bankruptcy," the reality is that it is a viable tool to get into a better position and start over again.

One frequent concern for those who are thinking about Chapter 13 bankruptcy is the eligibility requirements. Provided the eligibility requirements for filing for Chapter 13 are met, it is possible to move forward with the process.

An individual is able to file for Chapter 13. This includes those who are self-employed or operate a business that is unincorporated. The debts must be below a certain level and that level is adjusted contingent on changes to the consumer price index. At the moment, the amount of unsecured debts must be below $383,175.

There are also excluding factors. Corporations or partnerships are not eligible to file for Chapter 13. If a person is trying to file for Chapter 13 and has filed for bankruptcy and had the petition dismissed because of a willful failure to appear before the court, for a lack of compliance with court orders, or if the case was voluntarily dismissed due to liens held by creditors and this occurred within the previous 180 days, then it is prohibited. Chapter 13 is also unavailable unless the debtor has gone through credit counseling within the previous 180 days.

Although there are rules that must be adhered to when filing for Chapter 13 and the eligibility depends on the situation, it is still an option that those who are facing unmanageable debts should consider. It is also unwise to move forward with a filing of Chapter 13 without legal help. Calling a lawyer experienced in helping clients with Chapter 13 is a good way to start.

Source: USCourts.gov, "Chapter 13 Eligibility," accessed on Aug. 4, 2015

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