Filing Chapter 13 in Idaho

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Consumers filing bankruptcy in the state of Idaho have two primary choices: chapter 7 and chapter 13. However, changes to the federal bankruptcy laws in 2005, which apply in Idaho as well as across the United States, have made filing for a chapter 7 more difficult. Now, those who live in Idaho who want to file chapter 7 must show they make less than the median income in Idaho or must pass a means test. If a debtor is unable to meet these requirements, the best and only option is usually going to be a chapter 13. 

Filing for Chapter 13

If you wish to file for a chapter 13, there are a few basic qualifying criteria in Idaho:

  • You must not owe more than $1,010,650 in secured debt (things like mortgages, etc.), and you must not owe more than $336,900 in unsecured debt (things like credit cards and personal injury loans). If you exceed these debt limits, your options become even more limited, and you may need to file a chapter 11. 
  • You must not have had a chapter 7 discharge within the past 6 years.
  • You must have completed credit counseling with an approved program.
  • You must be able to provide proof of income, including tax returns and income records for the six months prior to the bankruptcy proceedings. This income must be sufficient to afford you the opportunity to repay some of your debts each month while still having sufficient disposable income to meet basic needs. 

Understanding Chapter 13

Assuming you meet the basic requirements of filing for chapter 13 in Idaho, you need to understand exactly how the process works:

  • You do not need to turn assets over to a bankruptcy estate, as you would in a chapter 7. Instead, you may keep the assets, including houses and cars if you are able to become current on secured debt payments. 
  • You must create a repayment agreement that is approved not only by the court but also by the creditors. The agreement will extend for a period of 36 and 60 months, and debt payments will be made to a trustee, who will distribute the payments appropriately among creditors to whom you owe debts.
  • Any balances remaining at the end of the repayment period on the debts that are eligible will be discharged. Not all debts may be discharged or included in a chapter 13 repayment plan, however, so it is important to understand that this doesn't guarantee you a clean financial slate. For instance, student loan and past-due child support debts will not be helped by an Idaho chapter 13. 

Getting Help

There are many additional requirements and procedural rules for an Idaho chapter 13 filing. You need to contact an experienced bankruptcy attorney for help deciding what chapter of bankruptcy is best, as well as for assistance in actually filing your claim, notifying your creditors, and creating a payment plan.