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What can a Chapter 13 bankruptcy filing do for a debtor?

Many Tennesseans struggling with financial challenges may view bankruptcy as a solution of last resort. It should, however, be at the top of their list of solutions, especially Chapter 13 bankruptcy. Known as a "wage earner's plan," this form of bankruptcy will allow a filer to find debt relief through a repayment plan that lasts from 3 to 5 years.

So what specific advantages does Chapter 13 offer? The payment plan itself can be seen as an advantage, but Chapter 13 also allows a filer to keep certain assets and properties. A filer usually can often prevent foreclosure on his or her house, although they will still be required to make their mortgage payments. Payments on unsecured debts are also rescheduled, and the payments are usually lowered. Filers are also protected from creditor harassment.

What challenges do Tennesseans face if they file for Chapter 13? The greatest challenge a Chapter 13 bankruptcy filing poses for anyone is learning to live with less money for the duration of the repayment plan. Earning a living but paying off debts while on a limited budget can be difficult for some people, especially if they are used to certain luxuries. A disciplined approach, however, can minimize the difficulties. Other than this main challenge, Chapter 13 can be easy to live with.

What are the eligibility requirements for a Tennessee resident who wants to file for Chapter 13 bankruptcy? To be eligible, a petitioner's unsecured debts should not be higher than $383,175, and secured debts should not exceed $1,149,525. However, these figures are periodically adjusted based on the consumer price index. A filer will also have to undergo credit counseling. A bankruptcy attorney can provide more information to a potential filer and answer any questions he or she might have.

Source:, "Individual Debt Adjustment," accessed on Nov. 19, 2014

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

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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