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Is Chapter 13 bankruptcy right for me?

| Apr 22, 2021 | Bankruptcy

Having too much debt is more than just a financial problem — it is an emotional problem too. From first realizing that one is no longer to keep up with bills to dodging calls from creditors, the mental load of debt is a significant burden. Those who earn a relatively good wage might even be convinced that there is no help out there for people like them. In reality, Chapter 13 bankruptcy can be a smart option for some Maryland consumers.

Do you qualify for Chapter 13?

There are a few requirements for filing for Chapter 13, the first being that the filer is not a business entity. Instead, someone in Virginia can either file as an individual or jointly with a spouse. Previous filings can also limit whether someone can file for Chapter 13 if not enough time has passed, including if the person filing:

  • Previously discharged debt with Chapter 13
  • Previously discharged debt with Chapter 7
  • Had a bankruptcy filing dismissed within the past 180 days

What about income?

There is no income limit on filing for Chapter 13 bankruptcy, although if someone’s income falls below Virginia’s state average than Chapter 7 might be a more appropriate choice. However, there is a cap on debt. The limit for unsecured debts such as medical bills or credit card debt is $419,275, while the limit for secured debts is $1,257,850.

Filing for bankruptcy does not have to be a scary experience. Many men and women find that the process brings a sense of financial security that they had previously been unable to obtain. One of the first steps in this process is to decide whether filing it is appropriate to file for Chapter 7 or Chapter 13, a step for which some people find it helpful to seek guidance.