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Why file for Chapter 13 instead of Chapter 7 bankruptcy

When it comes to getting a handle on finances, thousands of Tennesseans will consider bankruptcy as a legitimate option in 2015. Sometimes, debt is accumulated slowly over many years until it becomes unbearable. Other times, it is the result of an unforeseen expense that becomes unmanageable. Both way, there are a few options for debt consolidation and one of those is Chapter 13.

Chapter 13 bankruptcy is unusually one of the lesser known options. This is because Chapter 7 bankruptcy is usually the preferred method of debt consolidation for debtors. Mostly, this is because Chapter 7 eliminates most unsecured debt. Nonetheless, not all debtors are eligible for Chapter 7, or it may not be the correct choice for them.

Chapter 13 is the choice for debt consolidation over Chapter 7 when certain debtors do not quality for Chapter 7 bankruptcy. This would be true if the debtor's income exceeds the median Tennessee income, and the debtor has a certain amount of disposable income to repay some portion of unsecured debt in a Chapter 13 repayment plan.

Chapter 13 does allow the debtor to pay their debt over a longer period of time versus eliminating it completely. Some people prefer this option, due to moral reasons.

Whether a debtor does not qualify for Chapter 7, or Chapter 13 was chosen for moral reasons, it is still a great way to help consolidate debt into manageable payments. This makes repaying what is owed easier and attainable.

There are other reasons a debtor may choose Chapter 13 over Chapter 7. However, these are two of the big ones. Keep in mind each debtors situation is different and will be subject to different obligations and restrictions.

Source:, "Chapter 13 vs. Chapter 7," accessed on April 13, 2015

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

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