It can be frustrating to learn that you don’t qualify for a chapter 7 bankruptcy when that is your preferred option. However, it’s important to keep in mind that you may still have an option for filing bankruptcy.
Chapter 13 bankruptcy can be a great way to help you out of debt if you don’t qualify for a chapter 7 bankruptcy. In a chapter 13 bankruptcy, you’re able to make a repayment plan that allows you to pay back your debts over a span of three to five years, depending on your circumstances.
In addition, chapter 13 bankruptcy allows for several benefits that chapter 7 doesn’t always allow for, such as:
- Retaining all of your property,
- Getting current on missed mortgage or auto payments,
- Paying back debts that can’t be discharged, such as child support obligations,
- Decreasing your auto loan balance, and
- Clearing a second mortgage or another junior home loan.
Read on to learn more about who can’t file for bankruptcy under chapter 7 and how a chapter 13 bankruptcy can still benefit you if you’re in debt.
Who Cannot File for Chapter 7 Bankruptcy
There are several reasons why you may be unable to file for bankruptcy under chapter seven, including:
- You have a previous chapter 7 bankruptcy discharge on your record within the last eight years or a chapter 13 case within the last six years.
- Your bankruptcy case was dismissed by the court within the last 180 days as a result of:
- A violation of your court order,
- Your filing was ruled fraudulent by the court or was considered an abuse of the bankruptcy system, or
- You requested your case be dismissed after a creditor wanted to be relieved of the automatic stay.
- The courts determined you cheated your creditors or hid assets to avoid having to sell them to repay your debts.
- You are filing for bankruptcy as a corporation or LLC.
Qualifications for a Chapter 13 Bankruptcy
Although you may not qualify for a chapter 7 bankruptcy, you may still be able to file for a chapter 13 bankruptcy. If you meet the following requirements, you may be eligible for a chapter 13 bankruptcy:
- You have a regular income,
- Your unsecured debts are less than $419,275,
- Your secured debts are less than $1,257,850,
- Your tax filing status is current,
- You haven’t filed for chapter 13 bankruptcy in the past two years or chapter 7 bankruptcy in the past four years, and
- You haven’t filed a bankruptcy petition (chapter 7 or 13) in the last 180 days that was dismissed for particular reasons, such as not appearing in court or not complying with court orders.
An Attorney Can Help You Understand Your Rights
Filing for chapter 13 bankruptcy tends to be much more complex than filing for bankruptcy under chapter seven, so it is critical that you consult an attorney early on in the process.
You’ll want to make sure your repayment plan is just right for your circumstances so you can pay off your debts in the time allotted to you. Having an attorney help develop your plan and submit the necessary paperwork can tremendously ease the burden and make the process much more manageable for you.
Our attorneys here at Caddell Reynolds Law Firm are highly skilled in bankruptcy law and have helped many others in similar situations clear their debts. Let our team see if we can help with your financial goals too.
Don’t delay—reach out to our office right away to learn more about what we can do for your case.
Contact the experienced attorneys at Caddell Reynolds Law Firm by calling 800-671-4100 or filling out an online contact form today.