Chapter 13 Eligibility

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Nothing can be more frustrating to a person who needs to restructure their personal finances than their inability to work with the creditors they owe. More often than not, the creditors want far more per month than they can afford. That is when seeking the advice of D.J. Rausa becomes so necessary.

When a client wishes to pay their creditors back, I help them arrive at a monthly payment they can afford. I use the Chapter 13 Bankruptcy process to accomplish this. I look at all their reasonable expenses and all their income, and assist them with developing a solid payment plan that they can fit into their household budget. That is the disposable income that can be used to fund a monthly Chapter 13 plan.

Not everyone is eligible to be in a Chapter 7 Bankruptcy because of their income, or their net worth. This will make them ineligible for a Chapter 7, and leave them with no other alternative but to be in a Chapter 13 repayment plan.

Not everyone can be in a Chapter 13 Plan because there are limitations to the amount of money that is owed. These debt limitation are spelled out in the Bankruptcy Code at 11 USC 109(e), Chapter 13 Eligibility.

At first glance, the limits seem beyond any limitation a typical person contemplating a Chapter 13. We often see the amount of Student Loan Debt, coupled with all the other unsecured debt, may go beyond these limits. Read more here about Student Loans.

Recent Trend

I have been following the developments in this area. There are two recent cases that have been decided which ease the Chapter 13 debt limitation if there is substantial student loan debt. One Judge out of Illinois issued a ruling indicating that there should not be any debt limit where the vast majority of unsecured debt is student loans.

A second judge ruled the exact same way just a few months later.

This issue has yet to be decided in the 9th Circuit, so we can only wait and see how the Judges in the Southern District of California would view this issue. Of the leading cases involving somewhat similar facts, albeit not student loans, these Courts ruled that Chapter 13 eligibility may very well be a moving target.


Are you interested in learning how this amendment could affect your student loan status? Schedule your free initial consultation with DJ Rausa today.

Student Loan Lawyer | D.J. Rausa
We have a new sister website dedicated to Student Loan Debt Resolution. Please visit San Diego Student Loan Lawyer for more information regarding options for management and settlement of your student loan debt.

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D.J. Rausa

With over 21 years of experience as a consumer bankruptcy attorney, D.J. Rausa stays on the cutting edge of Bankruptcy and Student Loan Law which enables him to provide vital information to his clients.

More in this category: « Chapter 13 - Student Loan Debt

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Thank you DJ!

I had no idea where to start with my bankruptcy and process. After my first meeting with DJ I felt confident that things were going to go well. He helped guide me through the entire process and time. 

He's very professional and courteous, thorough and extremely knowledgeable. 

I would recommend anyone that needs a bankruptcy lawyer/ student loans. 

Don't have a second thought when choosing DJ Rausa!

Posted by a client - February 15, 2016

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D.J. Rausa interviewed by the Wall Street Journal for article on Bankruptcy and Student Loan Debt.

D.J. Rausa is recognized as a legal expert in Student Loan Debt Resolution and the associated Bankruptcy Laws.

Read what D.J. recently told The Wall Street Journal regarding the probable rise in Student Loan Debt Resolution through Bankruptcy.

Client Testimonial

To whom it may concern,
Mr. Rausa is extremely knowledgeable with the complexities of Federal Student Loans.
I went from a thriving career to full medical disability, ending with an SSDI placement. Unfortunately, I lost everything and became unable to continue making the student loan payments, so it was in deferment for over five years. When the SSDI settled I tried to negotiate an affordable payment plan with the loan holders but they refused my efforts, instead demanding over twice the amount I could afford.
I contacted Mr. Rausa and found him to be courteous, responsive and quick to assess my situation. He was sure he could help and took time to answer all questions, which relieved much anxiety. Within months he successfully resolved the debt! With much confidence, I highly recommend Mr. Rausa.
Please contact me if you have any additional questions.
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