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What qualifies a debtor for Chapter 13 bankruptcy?

Readers of this Chattanooga bankruptcy and debt relief legal blog may not know that not everyone is able to pursue all forms of bankruptcy. This is because different forms of bankruptcy serve different purposes and therefore only certain individuals and entities may qualify for each. The remainder of this post will discuss how an individual may qualify for Chapter 13 bankruptcy and what events may bar them from using it to achieve financial stability.

Unlike Chapter 7 bankruptcy which addresses the needs of individuals with minimal incomes, Chapter 13 bankruptcy may be utilized by individuals who make enough money to pay off at least some of their debts. In Chapter 13 bankruptcy, debtors are asked to create repayment plans that, over time, pay down the money that is owed to the debtors' creditors. If a debtor does not make enough money they may not be able to use Chapter 13 to manage their debt needs.

Additionally, a person who has met certain administrative requirements may file for Chapter 13 bankruptcy. Individuals must file their taxes in order to use the protections of the bankruptcy courts and they also must complete credit counseling mandates in order to begin the Chapter 13 process. Failing to do these and other requirements can prevent a person from getting a discharge through Chapter 13 bankruptcy.

Prior bankruptcies, plans that do not cover all necessary debts and other deficiencies can keep debtors out of bankruptcy court and struggling to manage their financial problems. Before filing for any form of bankruptcy it can serve a debtor's interests to discuss their needs with an attorney who can advise them on their rights and options for getting support through the bankruptcy courts.

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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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