What is filing for Chapter 13?

Answer 1

While this is a very general question, I believe the question being asked is whether a debtor who is unemployed can file a Chapter 13 bankruptcy. Unfortunately there can only be general answers given, but it is a place to begin exploring options. Remember that while bankruptcy is governed by federal law, individual state laws differ, and the debtor will be governed by both, so please speak with a bankruptcy attorney in your state. Chapter 13 is - simply stated - a court authorized debt management program. It is a means of creating a pay-back plan and very often the Trustee is able to authorize a program where debts are essentially, eventually paid back in full. If a person is unemployed with no means of income, that would be difficult to structure.

Answer 2

Chapter 13 bankruptcy is a type of bankruptcy that reorganizes your debt into monthly payments and essentially places the debtor on a strict budget. An individual's debts are not discharged under Chapter 13 bankruptcy, but rather, the individual may lower his debt payments to affordable levels. He will then have a certain period of time to pay off his debt. The plan for getting out of debt is formalized and approved by the bankruptcy court. Some unsecured debt (debt that is not collateralized) may be discharged. However, if you owe more than $250,000 in unsecured debt and more than $750,000 in secured debt, you cannot reorganize under Chapter 13; you must do so under Chapter 11. To file for Chapter 13, you must have regular income and debts under those levels.