Many Tennessee residents may hold the mistaken idea that they cannot qualify for bankruptcy if they have a steady income. In fact, it is not unusual for people across the country to think of bankruptcy as something only for people who do not have any money to pay their bills. However, that is not the case.
You and many other individuals may struggle to handle your debt liabilities despite having a steady job and a regular income. This can happen for any number of reasons, but in general, the debt-to-income ratio typically becomes too high to handle on your own. Fortunately, Chapter 13 bankruptcy could help you address your financial issues.
Why Chapter 13?
Though Chapter 7 bankruptcy is more common than Chapter 13, the latter often suits the circumstances of individuals who have at least some disposable income to use to pay back a portion of their liabilities. Rather than liquidating your assets like Chapter 7 involves, Chapter 13 requires you to create a payment plan and submit it to the bankruptcy court, which will then approve or deny your plan. If approved, you will follow that plan over the course of three to five years in order to pay your remaining obligations.
What does filing involve?
If you believe that Chapter 13 could help you get back on the right financial track, you will likely need to go through the following steps:
- Going through credit counseling to gain useful financial insights and possibly obtain help drafting your bankruptcy payment plan proposal
- Obtaining professional legal assistance to ensure that you go through the bankruptcy process properly
- Filling out the necessary paperwork to create your bankruptcy petition
- Submitting your bankruptcy petition to the court
- Submitting your payment plan proposal to the court
- Having a meeting of your creditors to discuss debt issues
- Attending a confirmation hearing to confirm your payment plan
- Following the payment plan for the next three to five years
- Going through a debtor education course
Bankruptcy is certainly not an easy way out of debt, but it is one that provides legal safeguards and could better ensure the appropriate handling of your financial issues. Gaining more information of the specifics involved in Chapter 13 bankruptcy may allow you to better determine whether this option could suit your particular circumstances and financial affairs.