There’s no income limit needed to file a Chapter 13 bankruptcy, but in order to qualify, the amount of debt you have can’t exceed a certain limit. Filers can’t have more than $394,725 in unsecured debt, and no more than $1,184,200 in secured debt.
Chapter 13 Bankruptcy Explained
A Chapter 13 bankruptcy is also called the wage earner’s bankruptcy. This type of bankruptcy is ideal for those who have enough income, but have trouble paying their bills on time.
What makes a Chapter 13 bankruptcy better is that you typically get to keep your assets, like your car or house, and you’re given a repayment schedule that lasts for either three or five years.
Before you file, you need to attend credit counseling from an approved agency. Once you complete this, you can file for bankruptcy, and your court-appointed trustee comes up with a repayment plan to help wipe out your debts.
Whether you have to repay your creditors in three or five years is determined by how much you owe compared to your income, and is factored against the median income of your household size in your state.
Chapter 13 Qualifications
Anyone who’s willing and able to pay down their debt can file for a Chapter 13 bankruptcy. Unlike a Chapter 7, there’s no income limit, which also means it doesn’t matter where the income comes from – it could be regular wages, Social Security, or even a pension. As long as you disclose your income sources and submit the information to the court within 14 days of filing, you should qualify for the process.
Make sure you show proof that you filed your state and federal taxes for the past four years, as well. Not being able to prove this, or failing to file your tax returns, could delay or even dismiss your case.
Need Help Finding a Dealership to Work With?
Things happen, and you may find yourself needing a vehicle during an open Chapter 13 bankruptcy. Subprime lenders know it takes years to complete a Chapter 13, and many are willing to finance consumers in an open bankruptcy.
However, not all dealerships work with bankruptcy auto financing, and it can be hard to spot the ones that do. If you've been through or are in an open bankruptcy and need to finance a car, we want to help.
At The Car Connection, we connect borrowers dealing with bad credit, no credit, bankruptcy, and other credit issues to local dealers that have the lending resources available to get them financed. All you have to do to start the process is fill out our free and simple auto loan request form!