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Understanding Individual with Regular Income (Bankruptcy) and Its Implications
Definition & Meaning
An individual with regular income is defined under the Federal Bankruptcy Code as a person whose income is stable and consistent enough to allow them to make payments under a Chapter 13 bankruptcy plan. This definition excludes stockbrokers and commodity brokers. Essentially, it refers to individuals who can reliably manage monthly payments based on their income, which is crucial for successfully navigating a Chapter 13 bankruptcy process.
Table of content
Legal Use & context
This term is primarily used in the context of bankruptcy law, specifically Chapter 13 bankruptcy. It is relevant for individuals seeking to reorganize their debts while retaining their assets. People with regular income can propose a repayment plan to creditors, allowing them to pay off debts over a three to five-year period. Users can manage this process themselves with the right legal templates, such as those offered by US Legal Forms, which are designed by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A single parent with a steady job earning $3,000 per month can qualify as an individual with regular income. They can propose a payment plan to manage their debts through Chapter 13 bankruptcy.
Example 2: A married couple with combined monthly income of $5,000 from their jobs also qualifies. They can create a repayment plan to address their outstanding debts (hypothetical example).
Relevant laws & statutes
The primary statute governing this term is the Federal Bankruptcy Code, specifically 11 USCS § 101. This section outlines the definition and criteria for individuals with regular income in relation to Chapter 13 bankruptcy.
Comparison with related terms
Term
Definition
Difference
Chapter 7 Bankruptcy
A liquidation bankruptcy where non-exempt assets are sold to pay creditors.
Individuals with regular income typically file Chapter 13, not Chapter 7.
Debtor
A person or entity that owes money to another party.
All individuals with regular income are debtors, but not all debtors have regular income.
Common misunderstandings
What to do if this term applies to you
If you believe you qualify as an individual with regular income and are considering Chapter 13 bankruptcy, start by assessing your financial situation. Gather documentation of your income and expenses. You may want to use US Legal Forms to access templates for filing bankruptcy, which can simplify the process. If your situation is complicated, consulting with a legal professional is advisable to ensure you understand your options and obligations.
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