As a Chapter 13 bankruptcy attorney in Memphis for over 30 years, I want to assure you, if you’re considering bankruptcy, you’re not alone. Due in part to unemployment going up as a result of the pandemic, the total U.S. consumer debt balance grew by $800 billion. The average American now carries $90,460 in debt, according to a 2021 CNBC report.
Filing for bankruptcy can help you get out from under crushing debt. It can also allow you to build a better financial future for you and your family. But the type of bankruptcy you can file for depends on your specific situation. For example, if you’re behind on mortgage or car payments, a Chapter 13 might be right for you.
What is a Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a debt reorganization plan. When you file, your debts and past-due payments are lumped into one affordable monthly repayment plan that spans over 3-5 years. It allows the filer to pay their debts over time while also protecting them from creditor harassment.
Once you complete the repayment plan, the remainder of your dischargeable debt will be forgiven. This means you will have a certain date when you know you will be debt free.
What are the advantages of a Chapter 13?
Chapter 13 bankruptcy offers a number of benefits. Some of the most significant are:
Stopping foreclosure and repossession. If you’re behind on your mortgage or car payments, filing for Chapter 13 bankruptcy will stop foreclosure or repossession. This gives you a chance to catch up on delinquent mortgage or car payments over time while keeping your family home and vehicle.
Increase cash flow. One of the biggest problems with having debt is the lack of cash flow to meet your weekly and monthly needs. When you file Chapter 13, your attorney will design a payment plan in which you pay a reduced amount of money on your debt. This frees up cash to make those necessary purchases.
Relief from creditors. Under Chapter 13, a trustee is appointed to oversee the debtor’s progress and communicate with their creditors. This means the person filing will have no direct contact with creditors while under the protection of Chapter 13, which is a welcome relief for many.
How do I start the process?
To start the process, it’s important to find an experienced lawyer who knows what they’re doing. Your lawyer will look at all of your debts and come up with a payment plan that works for you.
How do I know if I’m eligible for a Chapter 13?
To be eligible, you must show the court that you have a consistent source of income, providing assurance that you can repay your creditors. One of our experienced Chapter 13 bankruptcy attorneys can help you figure out which type of bankruptcy is right for you.
Call today for a FREE consultation with a Chapter 13 bankruptcy attorney
If you’re struggling with debt you can’t pay, contact us online or call (901) 327-2100 today for a FREE bankruptcy consultation. We will talk through your specific situation, answer every question you have, and make a plan that works for you.
Our experienced bankruptcy attorneys have helped hundreds of clients free themselves from debt, and we can do the same for you. Give us a call today to be on the path to a stress-free financial life.