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What do you need to do to get a Chapter 13 bankruptcy?

There are many different kinds of bankruptcy, which is why it can be difficult to decide which one you want to pursue. If you still earn a decent income and have some ability to pay back what you owe, you may want to consider Chapter 13 bankruptcy.

A Chapter 13 bankruptcy is beneficial, because it allows you the opportunity to restructure your debt into a repayment plan. Most repayment plans last three or five years, depending on your financial circumstances.

If you want to consider a Chapter 13 bankruptcy, there are a few things you need to be able to do. These include:

  • Showing that you have a regular income
  • Providing tax returns and payments that are up to date to the court.
  • Showing that you haven't had a bankruptcy dismissed within the last 180 days.
  • Showing that you don't have unsecured debts that exceed the current limits.
  • Showing that you did not have debt discharged with a Chapter 13 plan in the last two years or a Chapter 7 plan, 11 plan or 12 arrangement in the last four.

When you repay debts in a Chapter 13 bankruptcy, not all of your debts will end up being repaid. Priority debts and secured debts will come first. Priority debts must be paid in full. Those include tax obligations, child support, student loans and other required obligations. Secured debts come next, and include car loans, mortgages and some others.

Finally, the remaining payments will go to unsecured debts, but those are flexible. In the end, they may be reduced or forgiven once you emerge from bankruptcy.

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