When you find yourself struggling to repay your debts, filing for bankruptcy can be a good choice. While many people work with a Myrtle Beach bankruptcy attorney to file Chapter 7 bankruptcy, doing so isn’t the only option you have. For individuals who don’t want their debts completely discharged, filing for Chapter 13 bankruptcy can be a good choice. This type of bankruptcy allows you to repay a portion of your unsecured debts that you can afford to pay back if your income and expenses leave you with disposable income. But to be able to file for Chapter 13, you’ll need to meet the following qualification requirements.
You Must Earn an Income
Chapter 13 bankruptcy does not discharge your debts completely. Instead, it lets you make payments on a percentage of your debts. This means you’ll need to earn a regular income. The court doesn’t care what type of income you earn. It can come from your side hustle, a day job at a dedicated employer, investments, or self-employed income. The court will ask for bank statements and proof of income when reviewing your case.
You Must Be Able to Make Regular Payments to Creditors
Your income must be steady and great enough that you can afford the payments to your creditors while still covering your regular expenses like insurance, housing, utilies, food, and other similar expenses. The court will ultimately determine whether you make enough income to cover your expenses and your debt repayments, but your Myrtle Beach bankruptcy attorney will be able to help you determine if filing for Chapter 13 bankruptcy is the right fit for your financial situation.
You Must Comply With Court Orders
Once you file for bankruptcy, you’re expected to fully comply with any orders issued by the court. For many people, this involves attending credit counseling sessions. If you fail to comply with the court’s orders in full, you may not be eligible to file for Chapter 13 bankruptcy. Instead, you may need to consider filing for Chapter 7 bankruptcy or look into a different type of debt relief strategy. But if you comply with the court’s orders, you’ll likely be eligible for Chapter 13 bankruptcy.
You Haven’t Filed for Bankruptcy Recently
To qualify for Chapter 13 bankruptcy, you need to show the court that you’re capable of repaying your debts. If you filed for Chapter 13 bankruptcy within the last two years or had your debts discharged under a Chapter 7 bankruptcy in the last eight years, you won’t be eligible to file until enough time has passed.
For first-time filers, you’ll likely qualify for Chapter 13 bankruptcy as long as you meet the other qualifications.
What Happens if You Don’t Qualify
If you don’t qualify for Chapter 13 bankruptcy, you may still be able to file for Chapter 7 bankruptcy. Chapter 7 filings discharge most of your debts, giving you a fresh start. It’s what most people think of when considering filing for bankruptcy, and if you’re worried about your ability to repay your creditors, even at a lower amount, filing for Chapter 7 could be a better choice. Ultimately, your Myrtle Beach bankruptcy attorney will be able to help you decide on the best type of bankruptcy for your situation.
If you can’t qualify for Chapter 7 bankruptcy, you may want to explore other options. Consider contacting your creditors to see if they’d be willing to negotiate a lower payment. If they’re not willing, you may want to consider debt consolidation loans which could help you repay higher-interest debt while saving you money on interest in the long run.
Work With a Myrtle Beach Bankruptcy Attorney
If you’re interested in learning more about Chapter 13 bankruptcy or are interested in filing, don’t wait. Contact Lam Law Firm today to schedule a free consultation. Our team will work to understand your financial situation and help you decide which type of bankruptcy is the best choice for your needs.
