Chapter 13 Bankruptcy Plano TX: How To Know If You’re Eligible To File

Chapter 13 Bankruptcy Plano TXChapter 13 bankruptcy in Plano TX is one of two types of personal bankruptcy that individuals can file for in the United States.  Chapter 7 and Chapter 13 bankruptcies can allow you to either eliminate your debt or reduce it and make payments to meet your obligations.  Both options are good, sound ways to help you out of your financial problems and to give you a way to start over; but both options aren’t available to every debtor.  In general, qualifying for Chapter 7 bankruptcy is fairly straightforward –  if you have little to no income, Chapter 7 will eliminate almost all of your debt without any payments to your creditors.  Chapter 13 bankruptcy in Plano TX has different requirements for eligibility that include:

 ▸ You must be an individual.  Businesses can’t file for Chapter 13 bankruptcy.

 ▸ You must pass a means test to show the court that you have enough income left after paying certain allowed expenses, like car payments, to meet any repayment obligations set up by the court. The sources of income that you’re allowed to count toward your total include regular or seasonal wages, self-employment income, sales commissions, pension payments, social security benefits, disability benefits, unemployment benefits, welfare payments, child support and alimony payments, rental income and the proceeds from selling property.  If you are married, you can include your spouse’s income.

 ▸ Your debts can’t be too high.  You won’t qualify for Chapter 13 bankruptcy in Plano TX if your secured debt is in excess of $1,149,525.  Secured debts are those that are tied to the loss of specific property, like your home or your car, if you don’t repay them.  Another example of a secured debt is one in which a creditor, like the IRS, has filed a lien against your property.  As for unsecured debt, it can’t exceed $383,175.  These debts include credit card bills, medical bills, utility bills and more.  Both secured and unsecured debt limits are adjusted periodically for inflation.

 ▸ You must be up-to-date on your income tax filings.  You must be able to submit proof to the court that you have filed your income taxes for the four years prior to filing for bankruptcy.  If you need time to get all of your returns filed, the court can postpone your bankruptcy proceeding.  If you still can’t produce proof of filing, your case will be dismissed.

To get all of the information you need about Chapter 13 bankruptcy in Plano TX and to find out if you are eligible to file, call us at Collins & Arnove at (972) 516-4255.  You can also visit us online at to learn more about us and about Chapter 13 bankruptcy.

Collins & Arnove | Chapter 13 Bankruptcy Plano TX | 972-516-4255