Anyone new to Tennessee bankruptcy proceedings is likely to be curious about whether they can qualify for Chapter 13 bankruptcy. While it is true that Chapter 13 offers the possibility of preserving assets or an entire business in the face of creditor demands, this type of bankruptcy requires specific criteria for someone to be able to file for it. A person can be disqualified for filing Chapter 13 for a number of reasons.
As Findlaw explains, you cannot file for Chapter 13 if you are a business. You may file for Chapter 13 as an individual or in a joint filing with a spouse. However, business organizations like a limited liability company (LLC) or a corporation are not eligible. Exceptions are only made if the business income and your personal income are the same. If, for example, you work as a sole propitiator, you can file for Chapter 13. You may also file if you are part of a business partnership. You just file for the debts that you possess personal liability for.
Credit counseling is also a must. Before you can file Chapter 13, you have to undergo debt counseling by a credit counseling agency. Once you have completed debt counseling, make sure you have a certificate ready to file with the court. Your debt counseling should have taken place within 180 days before you filed Chapter 13. You must also file the certificate at the time of bankruptcy or fifteen days afterward.
Furthermore, the U.S. Courts website points out that you should provide a court with certain financial and asset information. This includes listing all of your creditors along with all of their claims and the nature of said claims. You also need to list all the property you own. The court will additionally want to know the details of your income and expenses, including:
- how much you earn in income
- the source of your income
- how frequently you earn your income
- a list of your living expenses monthly
It is also important that if you file Chapter 13 to be present in court on all dates when you are required to be there. Anyone that does not appear for all scheduled hearings leading up to the Chapter 13 proceedings is in danger of having the petition turned down. This can make it impossible to file for bankruptcy again. Noncompliance with court orders can also result in losing your eligibility for Chapter 13 bankruptcy.