When Oregon residents can no longer keep up with their debts and the harassing phone calls trying to collect never seem to stop, bankruptcy may be a worthwhile alternative. Knowing which chapter suits the individual’s needs can be confusing. This, combined with the fear and worry may leave a person unsure of what to do. For those who have property they would like to retain like a house, an automobile and personal items, Chapter 13 bankruptcy is the general recommendation. It is important, however, to understand certain factors that will be fundamental to the filing being approved and a discharge granted.

There are debt limits and eligibility requirements that must be met. Since Chapter 13 is based on a payment plan and is not a liquidation like a Chapter 7, the debtor must have sufficient disposable income to make the necessary payments over three or five years. The debt amount is one key to being eligible. Individuals who have unsecured debt that is below $394,725 can file for Chapter 13. For secured debt, it must be less than $1,184,200. These numbers are not static and adjust based on consumer price index. Even those who are self-employed or own an unincorporated business can seek a Chapter 13.

People who have previously filed for any form of bankruptcy in the previous six months and had it dismissed due to non-compliance with the plan or because they failed to appear cannot file for Chapter 13. Debtors must also take part in credit counseling. Depending on the circumstances, this can be flexible if it is an emergency or there are no sufficient nearby agencies to provide that counseling.

Accruing massive debt and being unable to pay it is not limited to people who might have made mistakes with their spending. This can happen to anyone without warning. It might be because of job loss, medical debt, personal problems and for other reasons. Recent events have emphasized how quickly people can find themselves in financial turmoil with nowhere to turn. Those who own a home will inevitably be frightened that it will be foreclosed upon. It is important to realize that Chapter 13 bankruptcy is not a shirking of responsibility to pay what is owed. It is a strategy to get on stronger financial footing.

Chapter 13 bankruptcy could be the light at the end of the financial tunnel. Before contacting debt settlement companies or continually trying to make payments with no end in sight, consulting with an experienced bankruptcy attorney can yield information and provide advice on how to proceed with a Chapter 13 filing and with determining if other options are preferable given the situation.