Filing for Chapter 13 Bankruptcy in Murfreesboro, TN

What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy is a type of reorganizing for your current assets (money, property, personal possessions) regulated by U.S. bankruptcy laws. According to the U.S. court system, Chapter 13 bankruptcy in the bankruptcy code of laws and regulations allows an individual who currently has a regular income to “adjust” his or her debts. What exactly does “reorganize” or “adjust” mean? Well, in this case it means you may have a steady job and have some money, but your bills have taken control of your life and you won’t be able to repay them at their current size, interest rate, or payment schedule. Unlike filing under Chapter 7 bankruptcy, Chapter 13 is more about reordering your finances to pay what you are able over a new timeline in order to get payments back under control instead of liquidate them completely.

Chapter 13 allows you, as a debtor, to keep property and pay debts on new terms that are within your ability to pay, usually over a time period of three to five years.

Benefits of Chapter 13 bankruptcy

To start with the obvious, filing for Chapter 13 bankruptcy means you likely won’t have to repay the full amount of your outstanding bills and loans. You’ll receive more time and new terms to repay your debts, and you’ll be able to keep the personal possessions you’re making payments on, instead of losing your house, car, and other property to a bank.

If bankruptcy is the clearest option for getting out of debt, declaring bankruptcy under Chapter 13 as soon as possible will allow you to begin rebuilding your credit sooner, instead of continuing to damage your credit score and interest rates by missing payments or making late payments. Bankruptcy is also one of the only ways to get immediate relief from having to pay your bills and loans, and even prevent aggressive collection action on student loans.

Potential drawbacks of Chapter 13 filing

Most of the drawbacks of Chapter 13 bankruptcy filings are the same as filing for Chapter 7. But one major difference is that Chapter 13 bankruptcy proceedings take a much longer time to complete. If you earn too much money to qualify for Chapter 7 proceedings, you want to manage student loan payments or other debt timelines, or for a variety of other reasons Fraley & Laxton can help you consider, Chapter 13 might be worth the extra time.

Your credit score will be damaged for some time until you establish good payment habits on your financial record. After you’ve filed for bankruptcy, there are very few circumstances in which you can file for any kind of bankruptcy again within six years or so. Ideally, you won’t ever have to file for bankruptcy again, so you won’t ever encounter the restrictions from this law.

To be eligible for Chapter 13 bankruptcy, the bankruptcy code states you may only carry up to a certain amount of secured and unsecured debt, cannot have filed for bankruptcy recently, and need to have a regular income from a job or your own business. If you aren’t sure if you meet those requirements, that’s OK. At Fraley & Laxton Attorneys at Law, we don’t expect you to know anything about a foreign and sometimes complicated process with both financial and legal nuances. We’ll help you through the process, explaining each option until you feel confident in your own knowledge, and then executing paperwork according to your wishes and in compliance with the courts and bankruptcy code.

You will still be required to pay previously court-ordered child support and alimony, if you have any. Similar to Chapter 7 filing, you may also still be liable for other, specific types of debt. This is where the legal team at Fraley & Laxton Attorneys at Law can help you understand where your debt comes from (credit cards, mortgage, business or personal loans, etc.) and how to find relief from the most burdensome debts.

If you’d like to learn more about Chapter 13 bankruptcy, or if reading through the various debt relief on our website has made you feel a bit overwhelmed, don’t let this decision add to your financial stress. Contact our team and let us guide you toward more financial freedom and stability. We strive to provide high levels of communication and compassion to each client’s personal needs. Reach our office at (615) 410-7290 during regular business hours to find out more about our services, experience, and willingness to help you through a stressful situation. The Fraley & Laxton team understands you are more than your finances, and believes you deserve a fresh start and second chance to live in financial freedom.

Find a bankruptcy attorney who will stand by you; call (615) 410-7290.