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An overview on how Chapter 13 works in Tennessee

Tennesseans buried under a pile of debt have several debt-relief options. One of those is to file for Chapter 13 bankruptcy. Tennesseans interested in learning more about the process for doing so should keep reading.

A Chapter 13 bankruptcy begins with the debtor filing a petition with the local bankruptcy court. Generally, the filing must include a list a statement of financial affairs, as well as a list of the debtor's current income and expenditures, executory contracts and unexpired leases and assets and liabilities. In addition, the debtor must provide, among others, a certificate of credit counseling, a copy of debt repayment plan, and evidence of employment (if any).

When filing the petition, the debtor will usually have to pay a filing and administrative fee. These fees are normally paid in a lump sum to the clerk of court at the time of filing. But, they can be spread out over as many as four payments with permission from the court.

Following a bankruptcy petition, a trustee is appointed to administer the case. The trust serves two functions: to review the case and to disburse funds.

A prime benefit of filing for bankruptcy is that the bankruptcy court will automatically issue a stay that stops creditors from trying to collect. As long as the stay remains in effect, creditors cannot sue call the debtor, garnish wages or file a lawsuit. They cannot even make phone calls to the debtor demanding payment.

Once the trustee is appointed, he or she will hold a meeting with the creditors. During the meeting, the debtor will answer questions under oath from both the trustee and creditors. During or shortly after this meeting, a final plan is usually agreed to.

The bankruptcy process is complicated. As a result, Tennesseans desiring debt relief may benefit from speaking with an experienced bankruptcy attorney.

Source: USCourts.gov, "Chapter 13 - Bankruptcy Basics," accessed on Dec. 20, 2015

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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