Chapter 13 Bankruptcy is an individual debt adjustment type of bankruptcy which is available to individuals who have a regular income and "as long as the individual's unsecured debts are less than $336,900 and secured debts are less than $1,010,650" 11 U.S.C. § 109(e). (These amounts are adjusted periodically for inflation.) In the case of married individuals, one or both spouses may file the petition.
Chapter 13 bankruptcy is available to self-employed individuals and those with unincorporated businesses. Partnerships and corporations are not eligible to file Chapter 13 bankruptcy, although they may file Chapter 7 Liquidation or Chapter 11 Reorganization.
Under Chapter 13 bankruptcy, the debtor files a plan to repay all or part of his/her debts, over a three to five year period. The length of time is determined by the monthly income of the debtor. During this time, creditors may not start or continue collection efforts against the debtor.
To initiate the process, the petitioner must file with the court:[br}
- A list of all creditors and the amounts and nature of their claims;
- The source, amount, and frequency of the debtor's income;
- A list of all of the debtor's property; and
- A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
