Eligibility for Chapter 13 Bankruptcy

06/04/15

Only individuals are eligible to file for Chapter 13 Bankruptcy.   A husband and wife can file a joint Chapter 13 case.Corporations, partnerships, estates, and trusts are not eligible to file for Chapter 13.  But individual operating their own business as a sole proprietorship (unincorporated) are generally eligible to file chapter 13 to deal with their personal and business debt.

In order to qualify for chapter 13 bankruptcy,  an individual must have a source of "regular income." "Regular income" means a source of money sufficient to fund a Chapter 13 plan.Income is not defined by the Bankruptcy Code, but the courts have held that Congress intended a broad definition of income for purposes of eligibility for Chapter 13.Typical sources of regular income are wages, social security income, and retirement benefits.

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