A case involving a felon in prison recently came before a state bankruptcy court. The individual filed for chapter 13 bankruptcy, but the court denied his request since he was making only about $14 per month, which came from the Illinois Department of Corrections. This amount was determined to be insufficient for entering into the repayment plan that is the primary feature of Chapter 13 bankruptcies.
The prisoner had a wrongful death suit filed against him, so before the plaintiff in the case was able to get a judgment against him, the man attempted to file for chapter 13 bankruptcy. Since he had a very limited income, the felon’s parents had promised to make monthly payments in the amount of $25 for 60 months in addition on his behalf.
The court deemed the payments promised by the man’s parents ‘purely gratuitous” and ruled that they did not count as regular income made by the person filing for chapter 13. The incarcerated man’s case was dismissed, but he may still be able to file for a chapter 7 bankruptcy.
When a person is trying to decide whether to file for a chapter 13 or chapter 7 bankruptcy, he or she will need to take into account the specific requirements that each one demands. Both types require that debtors complete credit counseling before they can file. People should also be aware that while filing for bankruptcy can provide debt relief, there can be downsides to both chapter 13 and chapter 7 filings. A lawyer could assist someone with determining what type of bankruptcy filing would be the most appropriate based on his or her situation and advise him or her of its prerequisites.