Cleveland Chapter 13 Bankruptcy: Your Path To Debt Reorganization

If you are facing a mountain of debt and bills and are considering bankruptcy, Chapter 13 may provide the solution you need. Unlike Chapter 7, which is a liquidation, Chapter 13 bankruptcy allows you to reorganize your debt, creating a structured repayment plan that helps you get back on track while keeping your home, vehicle, and other important assets.

At the law firm of Richard Banks & Associates, P.C., our experienced attorneys have been serving people throughout Tennessee and North Georgia since 1974. We can help you evaluate your options and determine if Chapter 13 is right for you. Call 423-219-3299 or contact us online for a free initial consultation.

Here’s why thousands of our neighbors choose Chapter 13 when they want to keep their property and still get significant debt relief.

An Overview Of How Chapter 13 Works

Chapter 13 is often called a “wage-earner plan” because it is designed for individuals with a regular income who wants to repay some or all of their debts over time. Instead of selling off assets, you commit to paying off your debts over a period of three to five years. The payment plan is tailored to your income and expenses, making it an affordable path to debt relief.

The key benefits of a Chapter 13 plan include:

• Saving your assets: You can stop foreclosure and keep your home, or prevent repossession and keep your vehicle.
• Stopping creditor harassment: The automatic stay goes into effect immediately, halting all calls, lawsuits and collection efforts.
• Lowering interest rates: Your plan can often reduce the interest rate on your secured and unsecured debts.
• Debt consolidation: You make one single monthly payment to the bankruptcy trustee, who then distributes the funds to your creditors.

Who Is Eligible For Chapter 13?

You may file Chapter 13 if you:

• Have a regular income (even if it’s from Social Security, disability, retirement, or self-employment)
• Have unsecured debts below $465,275 and secured debts below $1,395,875 (limits adjusted periodically)
• Believe your financial difficulties are temporary and want to repay at least a portion of your debts

Corporations and partnerships cannot file Chapter 13, but individuals, sole proprietors, and unmarried spouses can.

Debts That Remain After A Chapter 13 Discharge

While a Chapter 13 plan can discharge a significant portion of your unsecured debt, it is important to know that certain obligations are not eliminated. These nondischargeable debts generally include:

• Claims for spousal and child support
• Educational loans
• Drunk driving liabilities
• Criminal fines and restitution obligations
• Certain long-term obligations, such as home mortgages or auto payments, that extend beyond the term of the plan.

Discover more about these nondischargeable debts here.

Frequently Asked Questions

Here are some of the most common questions our clients ask about Chapter 13:

How does a Chapter 13 bankruptcy case work?

A Chapter 13 bankruptcy allows you to repay your debts through a court-approved payment plan. You make one manageable monthly payment to a trustee, who then distributes the money to your creditors. At the end of the plan, any remaining eligible debts are eliminated.

How long does it take to complete a Chapter 13 plan?

The duration of a Chapter 13 plan is typically between three and five years. The exact length depends on your income and the details of your case. By law, a plan cannot last longer than five years.

Can I keep my house and car?

Yes. Chapter 13 is specifically designed to let you cure mortgage arrears and catch up on car payments over time.

Get more answers to your questions on our Chapter 13 bankruptcy FAQ page.

What Happens If Your Income Changes?

When you are in a Chapter 13 plan, your payments are based on your income and expenses. If you experience an increase in salary, you may be required to report it to the bankruptcy trustee. In some cases, this could lead to a small increase in your plan payments to ensure creditors are paid. However, if your expenses also increase, there may be no change to your plan. It is crucial to have an attorney guide you through this process to ensure compliance.

Learn more about the effects of a salary increase here.

Rebuilding Your Credit

Filing for bankruptcy can have a long-lasting impact on your credit rating. However, it is not always a negative one. In some cases, filing can be the first step toward a positive credit rating by eliminating overwhelming debt. There are a number of steps you can take to rebuild your credit after bankruptcy, such as obtaining a secured credit card or a small installment loan.

For more details on how you can rebuild your credit, visit here.

Alternatives To Filing Bankruptcy

Before making a decision with long-term effects on your credit, it is wise to consider alternatives to bankruptcy. Less drastic options such as debt negotiation, consolidation or a personal workout with your creditors may be a better fit for your situation.

To understand all of your options, check out our page on bankruptcy alternatives.

Chapter 13 Resource Links

We believe in empowering you with knowledge. Here are some trusted resources to help you on your financial journey.

• Bankruptcy glossary: A list of key bankruptcy terms explained in layman’s terms.
• Bankruptcy fees: Official bankruptcy filing fees from the U.S. Courts.
• Bankruptcy forms: Access official bankruptcy forms and manuals.
• Chapter 13 basics: General information about Chapter 13 from the U.S. Courts.
• American Bankruptcy Institute: Consumer debt and bankruptcy information.
• National Foundation for Credit Counseling (NFCC): Educational resources on credit and budgeting.
• AnnualCreditReport.com: The official site to request your free credit reports.
• Experian: Consumer information on credit reports and scores.

Discover more bankruptcy tools here.

Find Out If Chapter 13 Is Right For You

Don’t let your debt control your life. Chapter 13 bankruptcy can offer a fresh start and the opportunity to regain financial stability while protecting the assets that matter most to you and your family.

Contact us today to discuss your case and find out if a Chapter 13 plan is the right solution for your unique financial situation.

Call us at 423-219-3299 or fill out our online form to get started.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.