As this blog has mentioned previously, when family in southeastern Tennessee files for bankruptcy protection, they get the benefit of having immediate relief from all debt collection efforts, which includes foreclosures.
A previous post on this blog discussed how small southeastern Tennessee business owners who operate in their individual names can get help with their business debts through a Chapter 13 bankruptcy. This is because these debts are usually in the business owner's personal name, just like his or her house loan or personal credit card. As such, they can be repaid through a Chapter 13 repayment plan.
A previous post on this blog mentioned that certain business owners may be able to use Chapter 13 bankruptcy to manage their business debts and therefore save their small business enterprise from having to close.
As this blog has previously discussed how Chapter 13 bankruptcy requires a financially struggling family to make regular monthly payments on their debts, some Tennessee residents may be wondering what exactly can be done to make sure the payment plan is manageable for them. After all, the bankruptcy will be of little help if, a few months into it, the family discovers they simply cannot keep up with the payments.
Many people in Bradley County and throughout the southeastern corner of Tennessee may wonder what advantages there are to filing a Chapter 13 as opposed to a Chapter 7 bankruptcy. After all, the more common Chapter 7 bankruptcy involves a quicker process that can give a family permanent debt relief in sometimes a matter of just weeks or a few months.
One of the advantages to Chapter 13 bankruptcy is that, for certain types of secure loans, a struggling family can actually improve their financial position by "stripping off" a lien, which is a completely legal process that involves converting what was a secured loan, like a second mortgage, in to an unsecured loan, like a credit card or medical bill.
For some people in Bradley County, Tennessee, or in other parts of the greater Chattanooga metro area, the prospect of having to file a Chapter 13 bankruptcy is not good news for a struggling family, yet the family does not have much of a choice because they make a high income. For others, filing Chapter 13 is a conscious choice. For instance, some people are willing to trade off having to repay all or part of their debts in exchange for getting to keep all of their property instead of having to turn it over to a bankruptcy official. There are other financial and legal advantages to filing for Chapter 13 bankruptcy and skipping the more common Chapter 7 bankruptcy.
Many people who live in Cleveland or in other parts of Bradley County, Tennessee, and who are facing financial challenges, may be frightened by the federal "means test" that is used in most family bankruptcy cases. But, residents should not fear this test.
Bankruptcy can be a reorganization option for individuals. However, in order to use this bankruptcy type, filers must have a reliable source of income. Those seeking to reorganize their debt and enjoy a fresh financial start at the end of the process should consider filing for Chapter 13 bankruptcy. A manageable repayment plan is developed through the Chapter 13 bankruptcy process that allows the filing party to repay their debts over a 3-5 year period.
Struggling with debt can be overwhelming. Chapter 13 bankruptcy is one option that is available to provide relief from the stress associated with overwhelming debt. Chapter 13 bankruptcy is considered a 'reorganization bankruptcy' that allows the filing party to reorganize his or her debt to repay it according to a more manageable repayment plan. The debts will be repaid over a period of time, typically three to five years depending on certain circumstances, rather than selling property to repay debts, which is commonly associated with a Chapter 7 bankruptcy.