In order to file for Chapter 13 bankruptcy, a borrower needs to meet the specific requirements of the law. This article will discuss which requirements must be met in order to be approved for the process.

First, the borrower cannot be a business entity. Only individuals can file for the Chapter 13 reorganization process, which involves reorganizing one’s debts according to a court-approved payment plan that lasts between three and five years. For example, corporations and limited liability companies are not eligible for Chapter 13; they need to file for Chapter 11.

Second, the borrower cannot be barred from filing bankruptcy due to a previously filed bankruptcy. In cases where debtors have discharged debts through Chapter 13 within the previous two years, or have discharged debts through Chapter 7 within the previous four years, the borrower cannot file for Chapter 13 until after sufficient time has gone by.

Third, the last bankruptcy needs to have been dismissed more than 180 days ago. This rule applies to both Chapter 7 and Chapter 13 bankruptcies.

Lastly, the credit counseling requirement needs to have been fulfilled. All Chapter 13 filers need to show a certificate of completion regarding credit counseling, and that the counseling was completed at least 180 days before the Chapter 13 filing. The certificate of proof must be submitted before 15 days have passed following the bankruptcy filing.

There are other requirements relating to the size of the debts involved, the need to provide proof that the debtor has filed his or her tax returns, and requirements relating to proposed repayment plans. Ultimately, Fort Lauderdale residents need to remember that just because an individual is having debt problems it does not mean that they will be approved for Chapter 13 bankruptcy. Therefore, borrowers may want to speak with an attorney about their debt situations before proceeding with the bankruptcy process.

Source: FindLaw, “Who Can File for Chapter 13 Bankruptcy?,” accessed Aug. 26, 2016