Who needs to use chapter 13 bankruptcy

Chapter 13 bankruptcy is used by people who don't qualify for Chapter 7 bankruptcy and people who want to protect their home from a mortgage foreclosure.

Attorney Tom Olsen: Jim, tell us about some bankruptcy chapter 13 then. Who's typically filing chapter 13?

Attorney Jim Monroe: Typically, the people that file chapter 13 are either, number one, compelled to file it because they do not meet the means test which is income test and they have to re-organize in chapter 13, or they are going through a foreclosure and they're attempting to try to save their home or some other property, or they have excess property that they would lose inside of a chapter 7 so they filed to protect that property.

Attorney Tom Olsen: So bottom line, it sounds like if you've got too much money, too much income, then you're not going to qualify for chapter 7 and they're going to move you into a chapter 13?

Attorney Jim Monroe: That's correct. The only exception is if your business or non-consumer debt is greater than your consumer debt, then regardless of your income, you can file a chapter 7 as long as you're doing it in good faith.

Attorney Tom Olsen: Hey folks, my guest today is Atty. Jim Monroe. He is a bankruptcy attorney.