Filing Chapter 13 bankruptcy in Virginia can help get your debt under control. This type of bankruptcy involves restructuring your debts. Instead of erasing the debts, there’s a repayment period spanning three or five years. The first step in filing Chapter 13 is seeing if you’re eligible.
Chapter 13 requirements
There are several requirements for filing this type of bankruptcy. First, you must have a steady income. Chap 13 bankruptcy is a repayment plan, so you must have the ability to make consistent payments.
There are stipulations for the amount of debt you owe. Unsecured debt can’t exceed $419,275 and secured debt can’t exceed $1,257,850. If you’re behind on your taxes, you must get current before filing Chapter 13.
If you’ve filed for Chapter 7 bankruptcy within the last four years, you can’t file for Chapter 13. You also can’t file if you’ve filed for Chapter 13 within the last two years. Additionally, you can’t file if you filed for either form of bankruptcy within the last 180 days and the bankruptcy was dismissed.
If you qualify to file Chapter 13, you’ll complete several bankruptcy filing steps.
Mandatory credit counseling
Credit counseling is mandatory before you can file Chapter 13. And you must receive counseling from an approved counselor.
Paperwork and petition
Chapter 13 involves completing several forms. You must provide information about your income, expenses, debt and personal assets. This information is required when you file your bankruptcy petition. You might want to seek legal counsel for help completing this step.
You have up to 14 days to submit a possible payment plan. Even if the petition hasn’t been approved, you must start making payments no more than 30 days after the petition is filed.
Meet with creditors
Your creditors get a chance to discuss your bankruptcy petition. The bankruptcy trustee will hold the meeting and you must attend. However, creditors can choose not to attend. Within 45 days of this meeting, you’ll attend another meeting to approve and confirm the payment plan.
To complete the Chapter 13 process, you attend a debtor education course offered by a nonprofit credit counseling agency. Your Chapter 13 filing is complete once you finish debtor education.
Chapter 13 bankruptcy is possibly an option if you have a steady source of income. The filing will remain on your credit report for up to 7 years.