For people that are running businesses, there are times that come during the process of doing business that debts accumulate, and the business stops being solvent. In case you business is having such a rough time and creditors are on your neck asking for their money back, it is possible to get some sort of debt relief.
The law allows you to file for bankruptcy and avert the consequences that come with being insolvent. However, there are certain things that you need to know about the process of filing for chapter 13 bankruptcy before you get started.
Chapter 13 eligibility
There are certain requirements that you have to fulfill to qualify for chapter 13. Here are some of these requirements.
- For you to be eligible, you have to have a secured debt of less than $1, 149,525 and unsecured debt of less than $383, 175.
- You must have not had another bankruptcy petition rejected at for at least 180 days prior to the filing date.
- You must have evidence that you have been attending credit counseling sessions with a recognized institution in the period of at least 180 days prior to the filing date.
- You must be willing to list all your assets, and give records of your income and expenditure.
- It must be evident that your average income is equal to or less than the median income for your state.
Some of these requirements may sound difficult to comply with. This is the reason you should look for a good lawyer to help you interpret them and avoid making mistakes that could lead to your petition getting rejected.
The proceedings
If there are no problems with the application, the judge may choose to grant the confirmation. During the confirmation hearing, an automatic stay is placed on personal assets which mean that they cannot be seized as part of debt collection by a creditor. Also, the process of getting a confirmation could avert a foreclosure.
These are just a few important things you should know about the process of filing for chapter 13 bankruptcy. The easiest way to go through the process is getting a lawyer who will help you decide whether you should get a chapter 7 or 13.
