Chapter 13 bankruptcy offers a viable solution for individuals in Memphis, Tennessee, who are struggling with overwhelming debt. This form of bankruptcy allows debtors to reorganize their financial obligations, making it possible to keep their assets while catching up on missed payments. Hurst Law Firm, P.A. provides the guidance you need to navigate through this challenging time.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, often referred to as a wage earner’s plan, enables individuals with regular income to create a plan to repay all or part of their debts. Unlike Chapter 7 bankruptcy, which liquidates assets to pay creditors, Chapter 13 allows debtors to keep their property and pay debts over time, usually three to five years.
The Benefits of Filing for Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy can provide several benefits:
- Asset Retention: Debtors can keep their homes, cars, and other significant assets.
- Debt Consolidation: Multiple debts are consolidated into one manageable payment plan.
- Protection from Creditors: An automatic stay stops most collection actions against the debtor.
- Reduction of Certain Debts: In some cases, the amount owed on secured debts can be reduced.
Eligibility Requirements
To qualify for Chapter 13 bankruptcy, individuals must meet specific criteria:
- Regular Income: Debtors must have a regular income that can support a repayment plan.
- Debt Limits: Secured debts must be less than $1,257,850, and unsecured debts must be less than $419,275.
- Current Tax Filings: Debtors must have filed all required tax returns for the past four years.
The Filing Process
Filing for Chapter 13 bankruptcy involves several steps:
- Credit Counseling: Debtors must complete credit counseling from an approved agency within 180 days before filing.
- Petition Filing: The debtor files a petition with the bankruptcy court along with a proposed repayment plan.
- Automatic Stay: Once the petition is filed, an automatic stay goes into effect, halting most collection activities.
- Repayment Plan Approval: The bankruptcy trustee reviews the repayment plan, and a confirmation hearing is held to approve it.
- Plan Execution: Debtors begin making payments according to the plan, typically to a bankruptcy trustee who distributes the funds to creditors.
Life After Chapter 13 Bankruptcy
Successfully completing a Chapter 13 repayment plan allows debtors to discharge remaining eligible debts. This fresh start can improve financial stability and credit scores over time. However, it is essential to maintain good financial habits to avoid falling back into debt.
Why Choose Hurst Law Firm, P.A.?
Hurst Law Firm, P.A. in Memphis, Tennessee, is committed to helping clients through the complexities of Chapter 13 bankruptcy. Our team provides personalized service to ensure that each client’s unique financial situation is addressed effectively. We strive to help you regain control of your finances and achieve a more secure future.
If you are considering Chapter 13 bankruptcy, contact Hurst Law Firm, P.A. today to discuss your options and begin the journey toward financial recovery.
