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What can I expect if I file for Chapter 13 bankruptcy?

There is a lot of misinformation out there about bankruptcy, which causes many people who would benefit from it not to file for it. More Tennessee residents might choose this form of debt relief if they knew more about it and its benefits. For this reason, this week, this column will discuss Chapter 13 bankruptcy and what people can expect if they choose to pursue it.

Chapter 13 bankruptcy is just one debt relief option open to those who find themselves struggling with their finances. It is meant for individuals who do have a steady income, whose income is higher than the state’s median income level and who can, to some degree, still make payments to creditors. The goal of this form of bankruptcy is to grant petitioners affordable debt repayment schedules, allowing them to keep their property, stop creditor harassment and meet their debt obligations in a way that makes sense given their current economic situations.

When people file for this form of bankruptcy, they can usually expect to attend credit counseling classes, so that in the end, they can make better financial decisions moving forward. They can expect to create a repayment schedule and present it to the court. If the court approves, they can expect their repayment plans to last three to five years, after which certain debts may qualify for discharge. They can also expect to have to work hard to rebuild their credit after bankruptcy approval — but it is possible.

There are both positive and negative things Tennessee residents can expect to experience if they choose to file for Chapter 13 bankruptcy. The good usually outweighs the bad. Those interested in learning more about this form of debt relief and if it is a good fit for them can turn to legal counsel to have their questions answered and receive assistance pursuing the form of relief that best fits their circumstances.

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