Chapter 13 Bankruptcy from Bankruptcy Attorney in Nashville

This restructuring plan allows individuals to retain assets, such as vehicles and homes, by creating and maintaining a reorganized payment schedule for the past-due debts, as well as maintaining the payments on the assets that are still owed monies. All your past-due debts are combined and a new payment schedule is set forth for the individual to follow over a 3-to-5-year period. This plan is often restructured for less than 10 cents on the dollar. Your new monthly repayment plan is determined by your current income and expenditures.

Frequently Asked Questions and Answers

1. What is a Chapter 13 bankruptcy case and how does it work?

A Chapter 13 bankruptcy case is a proceeding under federal law in which the debtor seeks relief under Chapter 13 of the Bankruptcy Code. Chapter 13 is the chapter of the Bankruptcy Code which allows a person to repay all or a portion of his or her debts under the supervision and protection of the bankruptcy court. In a Chapter 13 case, the debtor must submit to the court a plan for the repayment of all or a portion of his or her debts. The plan must be approved by the court to become effective. If the court approves the debtor's plan, most creditors will be prohibited from collecting their claims from the debtor. The debtor must make regular payments to a person called the Chapter 13 trustee, who collects the money paid by the debtor and disburses it to creditors in the manner called for in the plan. Upon completion of the payments called for in the plan, the debtor is released from liability for the remainder of his or her dischargeable debts.

2. When is a Chapter 13 case preferable to a Chapter 7 case?

Chapter 13 is usually preferable for a person who:

(1) wishes to repay all or most of his or her unsecured debts and has the income with which to do so within a reasonable time; (2) has valuable nonexempt property or has valuable exempt property securing debts, either of which would be lost in a Chapter 7 case; (3) is not eligible for a Chapter 7 discharge; (4) has one or more substantial debts that are dischargeable under Chapter 13 but not under Chapter 7; or (5) has sufficient assets with which to repay most debts but needs temporary relief from creditors in order to do so.