Requirements for Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy proceedings are for people who would like to reduce and discharge debts, while keeping certain assets, such as their home, cars, and retirement accounts and investments. Not everyone will be eligible to file a Chapter 13 proceeding though.

There are several requirements debtors must meet in order to qualify for this type of debt restructuring. Your experienced California bankruptcy attorney can help you determine whether you are eligible, and can walk you through the process of meeting all the filing requirements.

Proof of Income and Wages

The Chapter 13 process is sometimes called the “wage-earner’s plan,”  since debtors must show that they have a steady income each month with which to repay certain creditors over a period of three to five years. If you and your bankruptcy attorney believe Chapter 13 is right for you, your tax returns for the past two to four years will likely need to be submitted to the court as proof of your income.

Asset Exemptions in California

In Chapter 13 filing, income levels help the bankruptcy court decide how much you will need to pay your unsecured creditors per month, and for how long. California allows or even mandates numerous asset exemptions in determining monthly income levels for people filing bankruptcy.

Some common exemptions include allowances for a home, motor vehicle, certain personal property, retirement and pension accounts, public aid or benefits, insurance, tools of your profession, business partnership assets, and even a potential  miscellaneous or “wildcard” exemption.

Credit Counseling and Debt Management

The law in California requires debtors to complete simple mandatory credit counseling before filing their bankruptcy case, and to undergo debt management counseling post-filing.  The purpose of these requirement is to help debtors better understand how to manage income and budget expenses to potentially avoid another bankruptcy filing in the future.  

In many cases, mandatory counseling can be completed online or even by telephone and are typically low cost, or free if you cannot afford it. Your bankruptcy lawyer can make the necessary counseling arrangements for you.

Mandatory Waiting Periods Between Bankruptcy Filings

If you have previously filed a bankruptcy case, whether Chapter 7 or Chapter 13, there are some restrictions on how long you must wait in between cases. The time limit begins to toll when the cases are filed though, not when they are fully resolved.  

The length of the waiting period imposed depends upon the type of bankruptcy proceedings involved. If you have previously filed a Chapter 13 case, you will need to wait two years before filing another Chapter 13 bankruptcy. If your prior case was a Chapter 7 proceeding, the waiting period to file a Chapter 13 case is 4 years.

Consult Your experienced Oakland Area Bankruptcy Attorney

While there are several requirements that must be met before filing a Chapter 13 bankruptcy case, your bankruptcy lawyer with the Law Office of Melanie Tavare in California can work with you to make sure all prerequisites are met.