A Chapter 13 bankruptcy allows individuals with a steady income to repair their debt problems. This form of bankruptcy lets a person to reorganize their debts under court supervision by paying disposable income to a bankruptcy trustee who will make payments to creditors for a period of three to five years.
If you are struggling with debt but also want to protect your assets, pursuing a Chapter 13 bankruptcy may be your best option. A Chattanooga Chapter 13 bankruptcy attorney could help you navigate the filing process and regain control of your finances.
There are multiple conditions that could make a debtor eligible to file for Chapter 13 bankruptcy. These factors include:
Additionally, only individuals are eligible to file for Chapter 13 bankruptcy. Any business would have to proceed through the Chapter 11 court. A local lawyer could determine if a debtor meets the requirements to make a petition for Chapter 13 bankruptcy.
Chapter 7 bankruptcy is the other form of bankruptcy available for individuals, and usually involves non-asset cases. Chapter 7 generally does not allow a debtor to keep property like a home or a car unless the debtor reaffirms and pays off a balance, and unsecured debts are completely liquidated.
The law requires that if a debtor has disposable income, they do not qualify for Chapter 7 bankruptcy. Chapter 13 bankruptcy allows debtors to keep secured property up a specific limit and permits the discharge of lower priority debt on the property.
Chapter 13 can also reduce the total amount of debt that has to be paid and make the payments more manageable for the debtor. It requires the debtor to pay off unsecured debts in a way that often reduces the amount of the payments and allows them to be discharged at the end of the three to five-year period of the bankruptcy. This is often beneficial because it does not require the debtor to take out new debt. A skilled legal professional could further explain how the discharge of debts functions in this chapter of bankruptcy.
The bankruptcy code that governs these cases is complicated, and it is important for a debtor to be aware of its implications when filing a petition for bankruptcy. An experienced attorney could help an individual with specific details of this code to ensure that they complete the filing process accurately and efficiently.
If you are facing significant debt but still have some disposable income, a Chattanooga Chapter 13 bankruptcy lawyer could help you examine your options. They could get your bankruptcy plan approved and allow you to start working toward regaining financial stability as soon as possible. Call today to schedule an initial consultation and find out if Chapter 13 bankruptcy is the right choice for you.