Chapter 13 Eligibility in New York

Chapter 13 lets you keep your property while repaying debts over 3-5 years. Unlike Chapter 7, there is no means test income limit - but there are other requirements.

This page provides general educational information, not legal advice. Consult a qualified attorney for advice about your specific situation.

As of June 2024, the combined debt limit for Chapter 13 is $2,750,000 (secured and unsecured combined). Previously, there were separate limits for secured ($1,395,875) and unsecured ($465,275) debts, but the Bankruptcy Threshold Adjustment and Technical Corrections Act raised and combined these limits. If your debts exceed this amount, you may need to consider Chapter 11.

Core Requirements

  • Regular income. You must have income sufficiently stable and regular to make monthly plan payments. W-2 employment, self-employment, Social Security, disability, pension, rental income, and regular family support all count.
  • Debt limits. Your total debts (secured + unsecured combined) must be under $2,750,000. If your debts exceed this limit, Chapter 11 may be an option.
  • Credit counseling. You must complete an approved credit counseling course within 180 days before filing.
  • Tax filing. You must be current on tax return filings for the last 4 years.
  • Not a business entity. Only individuals (and married couples filing jointly) can file Chapter 13. Corporations and LLCs must use Chapter 7 or 11.

Plan Length: 3 Years vs 5 Years

Below-Median Income

If your household income is below New York's median ($66,973 for 1 person), your plan can be as short as 3 years (36 months). You may propose a 5-year plan if needed to fit all required payments.

Above-Median Income

If your income exceeds the median, your plan must be 5 years (60 months). All projected disposable income must go toward plan payments.

Prior Filing Restrictions

  • Prior Chapter 13 discharge: Wait 2 years before receiving another Chapter 13 discharge - 11 U.S.C. section 1328(f)(2)
  • Prior Chapter 7 discharge: Wait 4 years before receiving a Chapter 13 discharge - section 1328(f)(1)
  • Prior dismissal within 1 year: The automatic stay is limited to 30 days unless extended by court order - section 362(c)(3)
  • Two or more dismissals in 1 year: No automatic stay at all without a court order - section 362(c)(4)

Use the 1328(f) screener to check whether prior filings affect your eligibility.

What Chapter 13 Can Do That Chapter 7 Cannot

  • Save your home from foreclosure by catching up on missed mortgage payments over the plan
  • Cram down vehicle loans - reduce the loan balance to the vehicle's current value if the loan is more than 910 days old
  • Discharge some debts that survive Chapter 7, including certain property settlement debts from divorce
  • Protect co-signers through the co-debtor stay (section 1301)
  • Strip off junior liens on your home if the home's value does not support them

Frequently Asked Questions

What are the debt limits for Chapter 13?

The combined debt limit is $2,750,000 (secured and unsecured combined). If your debts exceed this, consider Chapter 11.

Do I need a job to file Chapter 13?

You need "regular income," not necessarily a job. Social Security, disability, pension, rental income, self-employment, and regular family contributions all qualify.

How long is a Chapter 13 plan?

3 years if your income is below New York's median ($66,973 for 1 person). 5 years if above the median. The plan cannot exceed 5 years.

Can I file Chapter 13 after a prior discharge?

You can file, but receiving a discharge requires waiting 2 years after a prior Chapter 13 discharge or 4 years after a Chapter 7 discharge. Filing without discharge eligibility is sometimes used to restructure secured debts (a "Chapter 20" strategy).

Check Your Eligibility

Free Discharge Screener Chapter 7 vs 13

Open Bankruptcy Project Network

Related New York Bankruptcy Resources

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