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What are the advantages of Chapter 13 bankruptcy?

Sometimes Tennessee residents just need to hit the reset button. But life, unlike video games, seldom offers a reset option. Fortunately, when it comes to their finances, there is a reset button for Tennessee residents. All they need to do is file for bankruptcy. Doing so is the first step of a process that ends in a fresh financial slate. One version of bankruptcy is Chapter 13 bankruptcy.

What are the advantages of pursuing Chapter 13 bankruptcy? One of the biggest advantages is for Tennessee residents facing the threat of having their home foreclosed. Chapter 13 bankruptcy offers a chance to protect the home from foreclosure. Specifically, filing immediately forces the foreclosure process to come to a screeching halt. It also gives the homeowner time and space to catch up on delinquent mortgage payments.

Homeowners facing foreclosure are not the only people who can benefit from Chapter 13 bankruptcy. People with other types of secured debts may also benefit. Under Chapter 13 bankruptcy, these debts can be restructured so that they extend over the course of the Chapter 13 process. Extending the payments can reduce the payment amounts, which can make them more manageable.

A third benefit is that Chapter 13 bankruptcy allows debtors to put some distance between themselves and their creditors. In other words, rather than having to pay creditors directly, Tennessee residents will pay a court-appointed trustee. The trustee will then pay creditors. Having no direct contact with creditors can be a significant advantage for besieged debtors.

Source: uscourts.gov, "Chapter 13 - Bankruptcy Basics," Accessed June 21, 2016

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

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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