Making the decision to file for bankruptcy is stressful. Deciding what type of bankruptcy to file can be equally as stressful. Not everyone is able to file for all forms of bankruptcy, and while some may wish to pursue Chapter 13 and some may want to take a different route, it’s important to understand what qualifies a person for such an action.

While Chapter 7 bankruptcy allows a debtor to liquidate property to pay creditors, Chapter 13 works in a different way. Instead of discharging nonexempt property, Chapter 13 lets a debtor keep possessions and put a plan in place to pay creditors in a three- or five-year time period. This plan may be a better fit for certain situations, but there are certain criteria that a person (or couple) must meet in order to file.

To file for Chapter 13 bankruptcy, you can’t be a business entity; you must be an individual or jointly-filing couple. While a business owner can’t file for the company, the owner can file personally if they are the sole proprietor (or with a partner) for debts they are personally responsible for. If the debts are too high, however, Chapter 13 is out of the question. The total amount of debts must be less than $336,900 in unsecured debt and less than $1,010,650 in secured debt.

Chapter 13 also requires filers to have sufficient income to repay the debts in question. This income can include a spouse’s income (if they aren’t filing for bankruptcy as well), but must be enough to cover the mandatory payments agreed upon in the three or five-year plan.

These are just some of the criteria that must be met before filing for Chapter 13 bankruptcy. It is a complicated process and seeking the assistance of a qualified attorney can help navigate the process without error.