Can i declare chapter 13 bankruptcy under these conditions in respect to the updated bankruptcy laws?
I am in my 20s, I rent do not own. I have $22,500 in unsecured credit card debt. I only make $31,000 annually. I obviously know I am in a dire condition, so I really do not ask for any negative comments. I am ashamed that I allowed my financial condition to become so dire, but never the less, I am unable to pay this debt off. I live in Pennsylvania, and I need to know if I am still eligible for Chapter 13 bankruptcy under the updated bankruptcy laws? I did a little research on my own, and I seem to meet the conditions. I do not make the median average for the state. I appreciate any response.
February 27th, 2009 at 11:22 pm
The median income test tells you whether you are eligible for Chapter 7 - it is not really a test for Chapter 13, which is a repayment plan.
If your income is below the median then you can choose to file a 7 or a 13. In order to file a 13, you need to have sufficient disposable income (money left over each month) to fund a plan that will last between 3 and 5 years.
If you do not have any disposable income, you can file a Chapter 7, which will eliminate your debt entirely.
There are many good bankruptcy resources on the Internet - the Bankruptcy Law network blog (www.bankruptcylawnetwork.com) has hundreds of bankruptcy related posts by a number of experienced bankruptcy lawyers from all around the country (full disclosure: I am one of those contributors).
From my perspective $22,500 is, relatively speaking, not a huge amount of debt. I wonder if a repayment plan by Consumer Credit Counseling might be a better choice.