Sometimes income and expenses just don’t line up. In many cases, the Tennessee resident’s income is steady; however, something has happened and expenses have escalated. This can happen when there are unexpected medical bills, costly home expenses or any number of other expenses that make it difficult to meet financial obligations. When this happens, rather than continue to struggle and sink deeper into debt, filing for Chapter 13 bankruptcy may provide the relief needed to get finances back to a manageable level.
Chapter 13 bankruptcy is designed for individuals who do have a steady income but just can’t make ends meet. It allows the individual to restructure his or her debt and establish a repayment plan that allows the individual to retain the item used as collateral for secured debts. Under this type of bankruptcy plan, it is likely that the individual will be able to retain his or her home, car and other important property.
Prior to filing, the individual will want to discuss options with an experienced attorney. Participation in a pre-bankruptcy credit counseling class is also mandatory. Once this has occurred, the attorney can then file a petition for bankruptcy. Soon after, a repayment plan can be presented. This repayment plan addresses how the individual plans to repay his or her secured and unsecured debts over a three to five year time period, and it requires approval by the court.
Chapter 13 bankruptcy offers the individual an opportunity to pay his or her debts in a manner that allows him or her to retain assets, pay debts and be able to make ends meet. Then, at the end of the repayment period, it is possible that some remaining debts may be discharged. Experienced legal counsel can assist the Tennessee resident in determining if Chapter 13 bankruptcy is the appropriate choice.