Chapter 13 bankruptcy is not for everyone. Here are a few things you should know.

• Debt limits. Secured and unsecured debts cannot exceed certain amounts.  A “secured debt” gives a creditor the right to take property (such as your house or car) if you don’t pay the debt. An “unsecured debt” (such as a credit card or medical bill) doesn’t give the creditor this right.
• Steady income. When you file a Chapter 13 case, you’ll have to prove to the court that you can afford to meet both your monthly household obligations and pay into a repayment plan. If your income is irregular or too low, the court won’t confirm (approve) your proposed repayment plan (more below).
• Not a business. This chapter isn’t available to companies, meaning that only an individual can file for Chapter 13 bankruptcy. However, business-related debts that you’re personally responsible for will be part of your plan, and therefore, from a practical standpoint, a sole proprietorship might be able to benefit from this chapter.