Tennessee residents struggling with debt may want to consider filing for Chapter 13 bankruptcy. This type of bankruptcy allows you to create a repayment plan that will enable you to pay back your debts over three to five-year periods. Keep reading to learn the basics of Chapter 13 bankruptcy and how the repayment plan works.
The basics of Chapter 13 bankruptcy
In order to qualify for Chapter 13 bankruptcy, you must have a regular income, and your secured debts must be less than $1,257,850, while unsecured should not exceed $419,275 (this amount is subject to change). You must also be current with your tax filings. In most cases, the bankruptcy court will require you to make monthly payments to your trustee to pay back your debts. The repayment plan typically lasts three or five years, depending on your income and debt level. If you successfully complete the repayment plan, the court will wipe away all of your discharged debts.
How the repayment plan works
The repayment plan allows you to create a budget that fits within your means. You will need to provide your trustee information about your income, debts, and expenses. The trustee will then create a repayment plan that allows you to pay back your debts over time. You will be required to make monthly payments to your trustee in order to complete the repayment plan.
Tips for completing the repayment plan
• Make sure that you stick to your budget and do not spend more than you can afford. This may require some sacrifices on your part, but it is important to stay disciplined so that you can succeed in paying back your debts.
• Stay organized and keep track of all of your financial information. This will help ensure that there are no surprises during the repayment process.
• Communicate with your trustee if you are having any difficulties making payments or if you need to change your repayment plan. The trustee can help you create a plan that works best for your situation.
Filing for Chapter 13 is one of the best options for those who are struggling to pay back their debts. By following the tips above, you can increase your chances of successfully completing the repayment plan and discharging your debts.