"Am I eligible to file a Chapter 13?" is a question I am often asked. Bankruptcy code section 109, entitled "Who may be a debtor" provides many of the requirements. To file a Chapter 13 you cannot have more than $1,257,850.00 in secured debt nor more then $419,275.00 in unsecured debt. Since this is Federal law these rules apply regardless of whether you file bankruptcy in New Jersey, Pennsylvania or anywhere else. In addition you must have completed a credit counseling course within 180 prior to the filing. You must be an individual. Also, you are not eligible to file a Chapter 13 you had a Chapter 13 within the prior 180 days and your prior case was dismissed for willful failure to obey court order or to appear in proper prosecution of a case. In addition, if you dismiss a chapter 13 bankruptcy after the creditor has filed a motion for relief from the automatic stay, you cannot file another Chapter 13 for 180 days. However, if your prior bankruptcy was dismissed by the court, and not at your request, you can refile. There are other rules that come into play, such as good faith. It is best to consult with an experienced bankruptcy attorney to confirm eligibility
Whether you are from Pennsauken NJ or Cherry Hill New Jersey or Northeast Philadelphia Pennsylvania, individuals often come into my office and ask the same question. Am I eligible to file bankruptcy? Most times individuals are eligible to file bankruptcy. There are some limits. For example, section 109 of the bankruptcy code provides that to file a chapter 13 bankruptcy you cannot have more than $394,725.00 in unsecured debt or more than $1,184,200.00 in secured debt. If you do, you cannot file chapter 13, but you can file an individual chapter 11. Sometimes the real question is can they receive a discharge. For example, if an individual has filed a chapter 7 bankruptcy within the last 4 years, they are not eligible to receive a discharge in a chapter 13. However, that does not prevent the individual from filing a chapter 13. If they are behind with their mortgage, a chapter 13 can be used to pay mortgage arrears over 3 to 5 years even if they are not eligible for a discharge. Regarding chapter 7, a discharge will not be received if a chapter 7 is filed within 8 years of a prior chapter 7. In addition, the ability to file a chapter 7 and receive a discharge may be effected by other factors such as income compared to expenses. If an individual has too much disposable income, they could be forced to convert to chapter 7 or have their case dismissed. Equity in assets is also a factor in determining whether someone should file a chapter 7 or chapter 13 bankruptcy. Whether bankruptcy is an option and which type of bankruptcy are important issues that should be discussed with an experienced attorney before deciding how to proceed.