Chapter 13 bankruptcy offers filers a chance to restructure their debt into a repayment plan (lasting up to five years). There are income and debt requirements to qualify, and filing a Chapter 13 bankruptcy will negatively affect your credit. So, why should you want to file a Chapter 13 bankruptcy?
What’s So Good About a Chapter 13 Bankruptcy?
The most apparent benefits of filing for Chapter 13 bankruptcy are that the income maximum is higher than Chapter 7 bankruptcy. So, some consumers whose income exceeds the maximum for filing Chapter 7 bankruptcy can still access bankruptcy protections by filing Chapter 13 bankruptcy. The other big draw for individuals and families struggling with debt is that Chapter 13 bankruptcy allows filers to keep essential assets – like your home.
What is Chapter 13 Bankruptcy:
Often referred to as the wage earner’s bankruptcy, Chapter 13 filers need regular income to qualify. When filing Chapter 13, the debt is restructured instead of receiving a discharge of debt, and a three to five-year repayment plan is put in place through the bankruptcy court.
A Major Benefit of Filing Chapter 13 Bankruptcy: Flexibility
One of the most valuable benefits of the Chapter 13 bankruptcy repayment plan is flexibility. The options offered by this type of bankruptcy are often appreciated by steady income earners overwhelmed by debt who don’t want to lose their property during bankruptcy.
Who is Eligible to File Chapter 13 Bankruptcy?
Any Georgia or Tennessee resident interested in filing Chapter 13 bankruptcy is eligible if their total debt falls within the designated threshold and they receive a regular income. When filing for Chapter 13 bankruptcy, the individual’s income level helps determine the length of the repayment plan. If the Chapter 13 bankruptcy filer’s income exceeds the state median, debts are repaid over five years.
However, if their income falls below the state median, the Chapter 13 bankruptcy filer will repay their debt over three years.
If you have questions about filing Tennessee or Georgia Chapter 13 bankruptcy, or you need to know which type of bankruptcy is best for you, don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.