Chapter 13 Bankruptcy
A chapter 13 bankruptcy involves a repayment plan where most debt is repaid over 3 to 5 years (instead of according to the timeline when the debt was originally to be repaid). A Chapter 13 repayment plan is calculated based on a person's average monthly income during the six months before the bankruptcy is filed. If a person's income is below the median income for the state, the plan typically lasts at or around three years. If your income is above the state median income, a plan will likely last five years.
Due to the complexity of the bankruptcy code, it is not advisable to attempt to file Chapter 13 without a bankruptcy attorney. Of those who attempt to file Chapter 13 on their own, only about 1 in 2500 succeed. People who hire a bankruptcy attorney to handle their Chapter 13 have a drastically greater chance of success.
Eligibility of Business Owners
Any individual who is self-employed or operating an unincorporated business is eligible to file chapter 13 as long as the individual's unsecured debts are less than $383,175 and the individual's secured debts are less than $1,149,525. These amounts are adjusted periodically to reflect changes in the consumer price index. Corporations, limited liability companies, partnerships, etc. are not for Chapter 13.