Eligibility

• In order to file a Chapter 13 case in Kentucky, state law requires that you be a resident for at least two years prior to filing. You must also have a verifiable source of regular income that exceeds your monthly expenses. As of 2010, you may not have more than $360,475 in unsecured debts and $1,081,400 in secured debts, according to the U.S. Courts.
  
  

Means Test

• The means test compares your family's median income against the median income for your family size. In a Chapter 13 case, the means test determines the length of your repayment plan. If your median income is higher than the median for your family size, you will have to pay for five years. If it's less, you only have to pay for three. As of 2010, a single filer in Kentucky is allowed a maximum median income of $37,450. The median increases to $64,230 for a family of four.
  
  

Filing

• Chapter 13 filings may be submitted to the district bankruptcy court nearest to where you live. You are required to attend court-approved credit counseling 180 days prior to filing. As of 2010, a Chapter 13 case costs $274 to file, although the state of Kentucky will allow you to petition the court to pay in installments or have the fee waived. All supporting documentation, including the statement of financial affairs and a list of debts and assets, must be submitted to the court within 14 days to avoid a dismissal.
  
  

Repayment Plan

• The repayment plan is the core of a Chapter 13 petition. The repayment plan outlines how you plan to repay your debts. In Kentucky, this plan must be filed within 14 days of submitting your initial petition. You are required to begin making payments according to the plan schedule within 30 days of filing, regardless of whether it has been approved by the court.
  
  

Warning

• The bankruptcy trustee is responsible for overseeing your case. If you fail to make regular payments to the trustee, your Chapter 13 petition may be dismissed. If your case is dismissed, your creditors are free to resume collection actions against you. If you are unable to make a regularly scheduled payment, you must notify the bankruptcy trustee immediately. In addition, you are also prohibited from buying or selling land, real estate or other property while in Chapter 13 without the consent of the court. You must also keep all motor vehicles with a lien against them insured to prevent creditors from pursuing a repossession.