brand brand
Helping good people through bad times
423-954-7180
423-954-7180

Eligibility criteria and the various advantages of Chapter 13

A Tennessee resident who does not want to the most valuable assets, such as property or a home, can file for Chapter 13 bankruptcy, which allows for a repayment plan to help pay debts over time without the creditors seizing the assets.

A Chapter 13 filing can save a family home from foreclosure, reschedule secured debt payments and extend those payments for the time set by the Chapter 13 plan, helping to lower payments to some extent. However, it is important to note that all mortgage payments must be paid on time during the term of the Chapter 13 plan.

Any third-party who is responsible along with the debtor is protected by a Chapter 13 bankruptcy filing, which provides special provisions to protect the third party. Loan co-signers can also be protected under this provision, which is similar to a consolidation loan wherein the debtor makes regular payments to a Chapter 13 trustee, who then pays creditors according to the plan. Debtors are not in direct contact with their creditors during a bankruptcy.

Chapter 13 filings do help individuals pay their debts with greater ease but a few requirements must be fulfilled to be eligible for Chapter 13 bankruptcy. Whether self-employed or not, individuals need to have secured debts less than $1,149,525 and unsecured debts less than $383,175 to be eligible to file for Chapter 13 bankruptcy.

Individuals who own a corporation or are part of a business partnership are ineligible for Chapter 13 Bankruptcy. Credit counseling by an accredited agency is required as a part of a Chapter 13 filing. An individual is ineligible to file for Chapter 13 bankruptcy if the debtor had another bankruptcy case that was dismissed less than 180 days before the current filing.

Source: USCourts.gov, "Individual Debt Adjustment," Accessed on May 2, 2015

No Comments

Leave a comment
Comment Information

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

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
Chattanooga Law Office Map