While there are several guidelines that must be met to file for Chapter 13 bankruptcy, there is no income limit to do so. However, an Illinois consumer seeking such protection will need to take a credit counseling course as part of the process. It will also be necessary to create a payment plan that is approved by the trustee, the bankruptcy judge, and the creditors involved in the case.

There are debt limits that individuals must stay under if they wish to file a Chapter 13 bankruptcy petition. The unsecured debt limit is currently $394,725 while the secured debt limit is currently $1,184,200, although both limits will increase for petitions that are filed on or after April 1, 2019. Debtors are generally required to disclose all sources of income and prove that they have filed state and federal income tax forms for the last four years. Failure to abide by one or more of these requirements may result in a case being thrown out or delayed.

Individuals may be able to incur new debt such as a car loan during a Chapter 13 bankruptcy case. However, they will need to show that it is necessary to take on the new obligation, and the terms of the loan are generally subject to court approval. Debts that are covered under a payment plan will be repaid in monthly installments over the course of three or five years.

Those who are looking to reorganize or eliminate debt may be able to do so by filing for bankruptcy. Other benefits to doing so may include a stay from creditor contact as well as an ability to retain assets during the repayment period. An attorney can explain other aspects of this form of debt relief.