What are the Requirements for Qualifying for Chapter 13 Bankruptcy?
In order to file for Chapter 13 bankruptcy, the debtor must qualify. In order to qualify for Chapter 13, the major qualifying factor is the amount of secured and unsecured debts. Each year, the U.S. Congress sets the limits for secured and unsecured debts for each County and State. The debtor may not exceed these limits in either category. There are other requirements as well.
For example, using 2012 tables for Orange County, a debtor owing $900k in secured debts, and $250K in unsecured debts would qualify for Chapter 13 as long as the other requirements are met. A debtor owing $1.5 million on a mortgage, or $500k in personal debt, would not qualify for Chapter 13.