Virginia residents may be interested in knowing that although there is no income limit set in order to file for Chapter 13 bankruptcy, there is a limit to the amount of debt one can have. For a person to be able to file for Chapter 13 bankruptcy, their debt must be less than $394,725 in unsecured debt. It cannot be more than $1,184,200 in secured debt.
Since there is not an income limit, if a person is willing to pay down their debt, they can file for Chapter 13 bankruptcy. The court doesn't care where a person's income comes from; it could come from their pension, unemployment or Social Security. What's important is that their income sources are disclosed and submitted to the court within 14 days of their filing for bankruptcy. As long as this is done, a person should not have any issues.
A person will also need to show that they filed their federal and state taxes over the last four years. If they didn't or if they can't prove it, it's possible that their case may be delayed or even dismissed.
Chapter 13 bankruptcy might be the right choice if an individual has a decent income but is having a hard time paying their creditors back readily. Chapter 13 bankruptcy lasts for three or five years. It's considered a reorganization bankruptcy because it gives the person time to pay back the creditors while at the same time allowing them to keep their assets, such as their automobile or their home.
A bankruptcy lawyer may be able to give their clients legal advice as well as help them understand and handle paperwork throughout the process. A lawyer may help their client see if they can file for Chapter 7, Chapter 13 or other types of bankruptcy to achieve their goals. Legal help may also let individuals know what they might expect during the bankruptcy process as well as any foreseeable difficulties or risks.