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Roger
Roger, Attorney
Category: Bankruptcy Law
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Can I file for bankruptcy under chapter 13 if Im ...

Resolved Question:

Can I file for bankruptcy under chapter 13 if I'm unemployed? I have 2 properties. I want to surrender one and keep the other. Thanks
Submitted: 9 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 9 years ago.

If you are not employed, filing a Chapter 13 is not possible. A Chapter 13 is commonly called a "wage earner's plan". It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. §1322(d). During this time the law forbids creditors from starting or continuing collection efforts.

The main element is a "regular income". If you don't have this, the bankruptcy trustee will not be able to set you up on a repayment plan.

Even if you filed Chapter 13, the trustee would convert it to a Chapter 7, which is total liquidation.

The following link provides more information on Chapter 13 filings:

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

 

Customer: replied 9 years ago.
Reply to Adam Kirk's Post: If I do find a job by the time I file for chapter 13 but my income is not enough to my mortgage of the property I want to keep and my living expenses... can I still file for chapter 13? thanks
Expert:  Roger replied 9 years ago.
If you do have regular income, you can attempt to file the 13 and see what sort of payment arrangements are available and whether you can handle them. If not, your trustee will file a motion to convert the case to a Chapter 7 citing the fact that you cannot maintain your Chapter 13 repayment plan.
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