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Basic information about Chapter 13 bankruptcy

On Behalf of | Dec 29, 2014 | Chapter 13 |

In large part, bankruptcy laws are in place to help financially troubled individuals and businesses seek debt relief when they have exhausted all other options. Chapter 13 is a bankruptcy option for self-employed individuals, wage earners and sole proprietors. People in Ohio who are drowning financially may want to consider whether they qualify for Chapter 13 bankrupcy.

To be eligible, individuals must receive income regularly and must have filed the required tax forms in the four years prior to filing for bankruptcy. The filers also have to continue incurring debt. Individuals who are filing bankruptcy because of past due federal tax payments might have to increase the amount of money that is withheld from their paychecks or the amount of money that they contribute to estimated taxes.

Individuals who qualify for Chapter 13 are given a bankruptcy plan, which they may help create. Those who successfully complete their plans are granted discharge of debt, absolving them of liability for dischargeable debts. Even federal tax debt may be considered dischargeable, though it is assessed on a case-by-case basis.

Facing the loss of a home or a business is often overwhelming for individuals. With their professional experience and knowledge, bankruptcy lawyers might be in a position to assuage individuals’ stress when filing bankruptcy. For example, individuals can bring their questions to a lawyer, who in all likelihood has worked with individuals in identical situations and with similar concerns. When individuals qualify for Chapter 13, their lawyer may also provide them a bankruptcy plan as well as instructions and ongoing counsel for completing the plan.

Source: IRS, “Chapter 13 Bankruptcy – Voluntary Reorganization of Debt for Individuals“, December 21, 2014


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