When do I qualify for a Chapter 13 Bankruptcy?

Not being able to qualify for chapter 7 means that you can qualify chapter 13. Generally chapter 7 is for those who are under the median or can prove that they have no money left at the end of each month. Not being able to meet either of the criteria will then move you into a chapter 13.

Why 13 Instead of Chapter 7

Chapter 7 is for those who are completely broke. They're under the median income for their state with overwhelming debt, or they're able to pass the long form of the means test when over the median. When a debtor finds that they have too much money left over at the end of the month, they must file under 13. This chapter is for repaying debt over a 36-60 month period, depending on debt load. Any remaining debt at the end of the time period will be discharged.

Being in chapter 13 is not necessarily a bad thing. It will be easier on the credit ratings once everything's discharged. And if there's a loss of income, it can be turned into a chapter 7 instead. The court does not want to punish a petitioner just because they cannot make their monthly payments.

Get Help from a Legal Professional

Have a consultation with an experienced bankruptcy lawyer. Don't try to figure out bankruptcy on your own. Let them look at your finances and assist you with the correct filing that's right for your income.