About Chapter 13 Bankruptcy
You might need to file under the Chapter 13 bankruptcy code because you make too much money to qualify for a Chapter 7. The 2005 Bankruptcy Act now makes it more difficult for people with higher incomes to liquidate their debts in bankruptcy. For example, if you live in a household of four people and earn a net income of $90,900.00 or more, you might not qualify to file the Chapter 7 bankruptcy code. There is a sliding scale depending on household size.
Even if you financially qualify for a Chapter 7 bankruptcy, you might choose to file a Chapter 13 bankruptcy because it will allow you to:
- *Pay off child support arrearages or overdue mortgage or car payments over a period of time.
- *It might discharge some marital debt incurred through a divorce.
- *It might give you a breather from student loan payments.
- *It might reduce both the amount of your car loan and the interest rate on your car loan.
- *You may be able to erase a second mortgage if your house is not worth more than the first.