Who can file for Chapter 13 bankruptcy?

Individuals with a regular income are eligible to file for Chapter 13 bankruptcy because this form of bankruptcy is specifically designed to allow those with a steady income to create a repayment plan to pay back all or part of their debts over a three to five-year period. The requirement of having a regular income ensures that the individual has the means to adhere to the repayment plan, making Chapter 13 a legal option for managing debt while also protecting personal assets from liquidation.

Other entities, like corporations and limited liability companies, cannot file for Chapter 13 bankruptcy as it is intended solely for individuals. The option of filing for bankruptcy for such entities typically falls under Chapter 11 or Chapter 7, which have different stipulations regarding business debt and liquidation processes. Likewise, while any individual can technically file for bankruptcy, only those who can demonstrate a regular income are permitted to pursue Chapter 13, which focuses on repayment rather than liquidation.