After you have made the decision to move forward with the Chapter 13 bankruptcy process, you may be wondering what comes next. This is an important choice that you have likely given great consideration, and following the appropriate steps will be critical to your success with the Chapter 13 bankruptcy process. The first of these is to determine whether you are eligible for this specific option. There are strict eligibility requirements, and not everyone will qualify for bankruptcy.
Chapter 13 bankruptcy does not get rid of your debt outright. It restructures your debt in a way that allows you to make regular payments. This process can take three to five years to complete as you will have to adhere to the requirements of a court-approved bankruptcy plan. This could be the most appropriate option for you if you have a significant amount of secured debt or are facing the threat of losing your Tennessee home.
How do you know if you qualify?
There are specific requirements you will have to meet in order to qualify for Chapter 13 bankruptcy protection. If you meet the following, you may be eligible:
- You have a regular income, and your unsecured debt does not amount to more than $419,275.
- Your secured debt amounts to $1,257,850 or less, and you are up-to-date on your tax filings.
- You do not have a previous Chapter 13 bankruptcy on your credit from within the past two years.
If you meet these and other requirements, you will be able to proceed with your filing. In order to do this, you will have to go through credit counseling, complete paperwork, file a bankruptcy petition, submit a repayment plan and more. There will be a meeting of your creditors, and your repayment plan is subject to review by the court. At the conclusion of the Chapter 13 process, you will have to attend a debtor education course.
Decide if it’s right for you
Bankruptcy is a serious decision, but it may provide you the opportunity to seek a better financial future for you and your family. An assessment of your specific types of debt can help you understand whether this option is right for you or whether you may benefit from exploring other bankruptcy and debt-relief options. Seeking guidance can also provide you with an understanding of what to expect from the Chapter 13 process.