Chapter 13 bankruptcy can be a great option for South Carolina residents who want to repay their debts but can’t manage the payments as they are now. This form of bankruptcy acts as a repayment plan and, if approved, you’ll be able to make routine payments to your creditors, often at a lower rate than you’re paying currently. But not everyone qualifies for Chapter 13 bankruptcy. These are a few of the factors that can disqualify you from filing for Chapter 13 bankruptcy.
You Recently Had a Bankruptcy Discharge
If you’ve filed for bankruptcy in the recent past and your debts were discharged, you may not be eligible for Chapter 13 bankruptcy. Why? Having a history of bankruptcy in the last few years shows the court that you may not be able to make the required payments to your creditors. The amount of time you’ll need to wait between bankruptcy proceedings will depend on the type of bankruptcy you filed previously. Your South Carolina bankruptcy attorney can help you determine if you’re eligible.
You Don’t Earn Enough Income
Chapter 13 bankruptcy requires you to make payments to your creditors. Those payments may be less than what you’re paying currently, but you’ll still need a reliable source of income to make those payments. The court will review your regular income sources to decide if you’re capable of making the required payments. If your income is too low or too sporadic, you may not qualify for Chapter 13 bankruptcy. However, you may still qualify for Chapter 7 bankruptcy to discharge your debts. Speak with your attorney for more information.
Your Debts Are Too Great
If you’re deep in debt, Chapter 13 bankruptcy may not lower your payments enough for you to pay back creditors. The court will review your total amount of debt to decide if you’re eligible. If the court feels that your total debt is too great to allow for repayment, you may be disqualified. Again, disqualification from Chapter 13 bankruptcy doesn’t mean you can’t get help. You may be better off filing for a Chapter 7 bankruptcy if you have more debt than you can repay under a negotiated repayment plan.
You Didn’t Comply With Previous Court Orders
When you file for bankruptcy, you’re expected to comply with the court’s orders, including completing credit counseling courses and any other terms the court determines necessary. If you fail to comply with those orders or failed to comply in the past, you may be disqualified from filing for Chapter 13 bankruptcy. If this is the case, speak with your South Carolina bankruptcy attorney as soon as possible. They’ll review your case and help you better understand your options.
Disqualification Doesn’t Mean You Can’t Get Help
Being disqualified for Chapter 13 bankruptcy doesn’t mean you don’t have other options. You may still qualify for Chapter 7 bankruptcy which can give you a clean and fresh financial start. If you’re worried about your ability to pay your debts and are considering bankruptcy, contact Lam Law Firm today to schedule a consultation.