Individuals who are burdened with personal debt and fear being cleaned out by creditors or are looking for alternatives to foreclosure may see filing for Chapter 13 bankruptcy in Connecticut court as an attractive option. While Chapter 13 presents clear benefits, this form of bankruptcy is not open to everyone. Anyone seeking to file Chapter 13 must meet certain criteria.
According to the Findlaw site, one of the most obvious requirements is that Chapter 13 is restricted to those filing as individuals or jointly as spouses. This means if a person owns a business that is a corporation and a limited liability company, that individual would have to file for Chapter 11 protection instead. However, since money earned as a sole proprietor is indistinguishable from a person’s own personal income, filing Chapter 13 for personal debts is permitted. A business owner in a partnership can also file Chapter 13. On the other hand, commodity brokers and stockbrokers cannot file for Chapter 13.
The U.S. Courts site lists additional requirements that relate to a filer’s debts. An individual cannot have unsecured debts less than the amount of $394,725. Any secured debts must be less than $1,184,200. These amounts, however, are subject to adjustment due to consumer price index changes. Additionally, an individual must have been advised by an approved credit counseling agency within a period of 180 days prior to bankruptcy filing. This counseling can take place as one on one briefing or within a group. However, a bankruptcy administrator may make exceptions if legitimate counseling agencies are not available, or if an emergency arises.
Finally, appearing on a court date is also essential to Chapter 13 eligibility. During the 180 days leading up to a bankruptcy filing, a person must appear before the court for all scheduled appearances. Should a debtor willfully fail to appear in court, a judge may turn down a bankruptcy petition, rendering the person ineligible to file for bankruptcy again. An individual may also be blocked from filing for bankruptcy for not complying with the orders of the court.