Chapter 13 Bankruptcy Eligibility Requirements (Part I)

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Businesses Can’t File for Chapter 13 bankruptcy
To file a Chapter 13 bankruptcy case, you must be an individual (or a husband or wife filing jointly). If you own your own small business, you can include all business debts on which you have personal liability. You have to file your case in your name, however, and not in the name of business, because a business cannot file for Chapter 13 bankruptcy. On your bankruptcy papers, you will need to list all fictitious business names or DBAs (“doing business as “) that you’ve used as a sole proprietor.
As with Chapter 7 bankruptcy, if you operate your business as a sole proprietorship or in partnership with your spouse, you, or you and your spouse, are personally liable for the debts of the business. For bankruptcy purposes, you and your business are one and the same. You can include all of the business debts in your Chapter 13 bankruptcy 13 case. You can also include the debts you are personally liable for as a member of a business partnership. There is one exception: stockbrokers and commodity brokers cannot file a Chapter 13 bankruptcy case, even just to include personal (non business) debts.
You cannot file a Chapter 13 bankruptcy on behalf of a corporation, limited liability company (LLC), or partnership. If you want to file a reorganization bankruptcy in that situation, you must file a business Chapter 11 bankruptcy.

You Must Have Stable and Regular Income
You must have stable and regular income to be eligible for Chapter 13 bankruptcy. That doesn’t mean you must earn the same amount every month. But the income must be steady, that is, likely to continue for an indefinite period, and it must be periodic, weekly, monthly, quarterly, semi-annual, seasonal or even annual. You can use the following types of incomes to fund a Chapter 13 plan:
a) regular wages or salary
b) income from self-employment
c) wages from seasonal work
d) commissions from sales or other work
e) pension payments
f) Social Security benefits (although some courts won’t allow it)
g) Disability or workers’ competition benefits
h) Unemployment benefits, strike benefits, and the like (if other income will be available when these benefits expire)
i) Public benefits (welfare payments)
j) Child support or alimony you receive
k) Royalties and rents
l) Gifts of money from relatives or friends
m) Proceeds from selling property, especially if selling property is your primary business.

Bankruptcy Is it the right solution to your debt problems? Attorney Robin Leonard

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