Bankruptcy law covers a myriad of different processes that individuals, both private and corporate, can use to protect themselves from the collection and repossession efforts of their creditors. Many Cleveland residents know that Chapter7 bankruptcy and Chapter 13 bankruptcy are the most common ways for individual, non-corporate parties to seek bankruptcy protections. However, these recognized forms of bankruptcy are not available to everyone and impose limitations on who may pursue them.
For example, there are restrictions on who may file for Chapter 13 bankruptcy protection. Businesses and corporate entities may not use Chapter 13 to manage and reorganize their debts. They have other options, such as Chapter 11 bankruptcy, that provide them with other ways of securing debt relief and satisfying their lenders.
Additionally, people who have pursued bankruptcy in the past may not be able to use Chapter 13 as a way to seek financial relief. Prior Chapter 13 and Chapter 7 filings can prevent a person from pursuing a current Chapter 13 action. Chapter 13 actions must not have been fulfilled in the prior two years and Chapter 7 actions must not have been fulfilled in the prior four years for a current Chapter 13 matter to move forward.
Other factors, such as not filing past income tax returns, having enough money to pay off one's debts, having too low of debt totals and not completing credit counseling within the requisite period of time can all block an individual's efforts to file for Chapter 13 bankruptcy. These are only a few of the factors that can block a person's ability to have a successful Chapter 13 filing. It is important for individuals who want to pursue Chapter 13 bankruptcy to discuss their eligibility for the process with their bankruptcy attorneys before submitting their filing materials to the bankruptcy courts.