If you wish to file Chapter 13 bankruptcy, you will have to create a repayment plan for your debts. There are several rules you must follow to make a plan the court will approve.
Part of the requirements is to include the repayment in full of certain debts, which may require you to have a certain level of income with which to pay those debts. There is no set income limit because it depends on your specific finances.
Basic rules
As you begin thinking about your bankruptcy plan, you will need to understand the basic rules for doing so. According to FindLaw, you will need to create a plan that will allow you to pay all priority debts within three to five years.
You will have five years to repay if your income is more than the state median. Otherwise, you will only have three years.
Priority debts are those you must pay under bankruptcy law and include those things bankruptcy law does not allow you to discharge. For example, child support obligations are not dischargeable so they are a priority debt.
Secured debts
If you wish to keep assets you still owe money on, then you will have to pay for those as well. You may not fully pay them off, but you need to be able to afford to make the regular monthly payment towards them. You can also surrender the assets to the creditor if you do not wish to keep them and include them as part of your repayment plan.
As long as you have money to cover priority debts and any secured debts for the assets you wish to keep, then you should be able to meet the income requirements to file Chapter 13 bankruptcy.
