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Who is now eligible for Chapter 13 bankruptcy?

Filing for bankruptcy is a big decision, and something that should be thought through. Whether it is necessary due to a period of unemployment, a serious illness, or other unexpected expenses, Tennessee residents thinking about bankruptcy should understand the different options available to them and what they might mean. This blog has previously discussed some of the main differences between filing for Chapter 7 bankruptcy and Chapter 13, including some of the basic eligibility requirements.

So what are the current federal rules governing the filing of a Chapter 13 case?A person wishing to file bankruptcy must complete credit counseling within 180 days prior to filing, and must not have had a previous case dismissed with 180 days of filing due to failure to appear or comply, or to allow creditors to recover property.

However, the other eligibility hurdle to filing Chapter 13 cases is the amount of debt involved. Because these eligibility levels are pegged to the consumer price index, they can periodically change. As of this writing, the federal bankruptcy courts website reports that Chapter 13 cases may be filed by those debtors owing less than $1,149,525 in secured debt, and $383,175 worth of unsecured debt. Tennessee residentsmay know that secured debt is that which is guaranteed by some sort of property, like a house or a car, and unsecured debt has no collateral behind it.

Sinceevery case is different, whether Chapter 13 bankruptcy is right for any given individual will depend on his or her circumstances. However, understanding the differences between bankruptcy types, and knowing what the requirements are may help if a Tennessee resident seeks to pursue this option to ease his or her debt burden.

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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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