Income: If either your income is too high to file a chapter 7 or you have too much disposable income, you may need to file a chapter 13 case. Every state has a median income based on household size. If you are above the median income there is a presumption of abuse to file a chapter 7. Sometimes you can rebut the presumption, but if you cannot you may need to consider a chapter 13 case. Also, if you are under the median income, but have too much disposable, income after reasonable and necessary expenses, you may be required to file a chapter 13.
Transfers and Assets: Sometimes filing a chapter 7 is too risky. If you have fraudulent transfers, preferences, or non-exempt assets in a chapter 7 you may consider filing a chapter 13. This is because in a chapter 13 your non-exempt assets are not liquidated and, generally, the trustee does not pursue fraudulent transfers or preferences. The reason is because in a chapter 13 your creditors have to receive as much as they would in a chapter 7.
Tax Debt: You may consider filing a chapter 13 if you owe a lot of priority tax debt and can afford to pay it back. In a chapter 13 bankruptcy you will need to pay your priority tax debt off during the bankruptcy. A chapter 13 plan will give you structure in paying the debt.
Arrears: A chapter 13 may be a good solution if you are behind on secured assets or leases. In a chapter 13 you generally are able to catch up arrears in the bankruptcy plan.
Whatever the reason is to file a chapter 13 bankruptcy, you are in good hands with the attorneys at LifeBack Law. Visit www.lifebacklaw.com to speak with an attorney. You will be glad you did!