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Tennessee Chapter 13 basics

Many Tennesseans have heard of bankruptcy. But, not everyone may realize that there are different versions. To learn more about Chapter 13 bankruptcy, keep reading.

What is Chapter 13 bankruptcy? Sometimes called a wage earner's plan because it enables regular people to create a plan to pay off some (or all) of their debt, under Chapter 13 a person proposes a repayment plan to make installments to their creditors over three-to-five years. The length of the installments depends on a person's monthly income. If their income is below Tennessee's state median, the repayment period is three years. If above the median, the plan is normally five years. Following the repayment period, any debt remaining is forgiven.

What are the advantages of Chapter 13? Many. For one, it offers people the chance to save their homes from foreclosure because filing for Chapter 13 bankruptcy stops foreclosure proceedings and, in some cases, allows the filer to cure delinquent mortgage payments over time. A second advantage is that Chapter 13 enables people to restructure their secured debts and extend over the life of the repayment plan. Restructuring reduces monthly payments by stretching the amount of time a person has to pay off the debt.

Who is eligible for Chapter 13? Anyone, including the self-employed, so long as the person has less than $383,175 in unsecured debts and less than $1,149,525 in secured debts.

Tennesseans interested in whether filing for bankruptcy is right for them may benefit from speaking with an experienced bankruptcy attorney about their options. Doing so could be the first step towards a fresh financial future.

Source: USCourts.gov, "Chapter 13 - Bankruptcy Basics," accessed on Dec. 6, 2015

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

Toll Free: 888-376-0282
Phone: 423-933-1606
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