
But any debtor who applies for chapter 13 bankruptcy needs to qualify for that.
Means test: The debtor should have a steady income and he should be in a capable position to repay certain amount of debts. If his income is more than the median income, he can be eligible for chapter 13 bankruptcy.
Income proof: The debtor needs to submit recent tax return file approved by the federal government.
State Exemption: The debtor must be a resident of that particular state for 2 years.
Credit Counseling: The debtor has to go for credit counseling session within 6 month prior to the date of applying for it.
After qualifying for the chapter 13, a debtor should make a plan of re-payment and show it to the federal law court appointed trustee.. After making a plan if the debtor fails to pay the repayment due to job termination, the court will again give a chance to remake a plan. There is a possibility to convert him to chapter 7, if he fails to keep the 2nd time payment plan.
To the extent possible, a debtor must try to work hard to avoid the bankruptcy. A debtor should have an idea about filing a bankruptcy should be the last option to go for.
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