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How does Chapter 13 bankruptcy reorganize one's debts?

Tennessee residents may often plan to achieve their goals by getting organized and making a plan to tackle the obstacles that stand in their paths to success. In essence, this is exactly what Chapter 13 bankruptcy does for debtors who have sufficient income to pay down their outstanding financial obligations over time. Through the process of reorganizing the debts and implementing a repayment plan, many debtors can find financial freedom through the protections of Chapter 13 bankruptcy.

Prior posts on this blog have discussed how a person must qualify for this particular form of bankruptcy. They generally must have a threshold level of income and the capacity to assign some income to the repayment of their debts. Once they qualify, though, with the help of a bankruptcy attorney, they may begin to prioritize their debts and reorganize their obligations so that they have a clear picture of just how much money they must pay each month to rid themselves of their economic burdens.

This information is used to create a repayment plan and a repayment plan is exactly what it sounds like. It is the periodic, often monthly, payment of cash to the debtor's creditors. Over time the payments work down the debtor's outstanding balances until they complete their repayment plan and achieve discharge of their debts through bankruptcy.

The details of how an individual bankruptcy case may be handled in Chapter 13 bankruptcy cannot be answered through the contents of this post. The information offered here is only an introduction into a complex area of bankruptcy law. To this end, readers should seek independent legal assistance from bankruptcy attorneys to address their individual legal needs.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
Phone: 423-624-4002
Fax: 423-624-0509
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