Many assume that filing for bankruptcy is a simple process in which they submit paperwork and wait for their debts to be discharged. However, this is far from the truth. In reality, this is an incredibly complicated process in which you must meet the necessary requirements. If you’re unsure what makes you eligible for filing Chapter 13, the following blog explores what you should know. In addition, you’ll learn why connecting with a Memphis, TN Chapter 12 bankruptcy lawyer is in your best interest when you want to seek financial relief.
What Is Chapter 13?
When you’re considering filing for bankruptcy as a consumer, there are two options you can pursue. The first is Chapter 7, which is generally a six-month process. However, to qualify, you must earn less than the average income for a household of your size in Tenessee. If you do qualify, this process also involves the liquidation of your assets, meaning you risk losing your home and other important property. As such, many are hesitant to pursue a Chapter 7 filing.
The other option is to file Chapter 13. This is a reorganization bankruptcy that consolidates your debts into one monthly payment. You will pay your bankruptcy trustee, who will then distribute funds to each creditor. At the end of the repayment plan, all remaining eligible debts will be discharged.
It’s important to understand that regardless of which bankruptcy option you file, you should expect it to drastically impact your credit score. However, Chapter 7 bankruptcy will remain for 10 years, while a Chapter 13 filing will only last for 7.
Are There Requirements I Must Meet Before Filing Chapter 13?
There are a few requirements that you must meet if you wish to file for Chapter 13 Bankruptcy. Generally, you must have no more than $2,750,000 in secure and unsecured debts on the date on which you file. Additionally, if you have attempted to file in the past but your case was dismissed, you must wait 180 days before you are able to refile. If you have successfully completed a bankruptcy filing in the past, you must wait four years if you filed Chapter 7 and two years if you filed Chapter 13, Finally, you must also ensure that you have completed the required credit counseling courses within 180 days of filing.
For many, the idea of filing for bankruptcy can be overwhelming due to the serious impact it can have on credit scores. However, it can be incredibly beneficial to receive financial relief. As such, if you’re ready to take control over your finances, the team at the Arnold Law Firm is ready to assist. We understand how difficult these matters can be, which is why our team is committed to fighting for you. Connect with us today to learn why so many in and around Memphis have trusted us to help them obtain financial relief.
