What kind of income source do I need for Chapter 13?

A requirement to be a debtor in a chapter 13 case is having "regular income." Practically speaking, the source and regularity of the income is not as important as existence of the income. Chapter 13 bankruptcy involves a court approved payment plan. In order to obtain approval, a debtor must demonstrate to satisfaction of the court, trustee, and other parties that the plan is feasible, i.e. the debtor will be able to make the payments proposed. Usually, this means the debtor must disclose a source of income that will pay his or her basic living expenses as well as the proposed bankruptcy payment. Most sources of income, if large enough in size, will do.

Wages, self-employment income, retirement benefits, pensions, social security, workers compensation, unemployment compensation, rents, royalties, child support, alimony, and public benefits can all be income to support a chapter 13 plan. The most common problem is when the source of income is not concrete or reflects some extent of wishful thinking.

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