Chapter 13 Bankruptcy Attorneys in Nashville

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is designed for individuals with a regular income who need help repaying their debts while keeping their property. Unlike Chapter 7, it allows you to reorganize your debts into a structured repayment plan lasting three to five years, helping you avoid liquidation of assets like your home or car.

How Does Chapter 13 Work?

Chapter 13 combines your bills into a single monthly payment, often deducted from your paycheck and sent to a Chapter 13 Trustee's office by your employer. The trustee then distributes funds to creditors, paying secured debts like your home, car, and furniture first, followed by priority debts such as taxes and child support, and then unsecured debts, which may only receive a portion of what is owed. During this time, unsecured creditors cannot add interest, penalties, or late fees.

Eligibility & Process

To qualify, you must have a steady income and fall within certain debt limits set by the court. These limits can change periodically, but they generally ensure that Chapter 13 is used by individuals with manageable debts who can afford to make regular payments. After filing, you propose a repayment plan outlining how creditors will be paid, which must be approved and may be adjusted if needed.

What Happens at the End of the Plan?

At the end of the repayment period, if the debtor has successfully followed the plan, any remaining eligible debts may be discharged. This means that the debtor is no longer responsible for those debts, providing them with a fresh financial start. Chapter 13 is often a good option for individuals who want to avoid losing their property while making a structured plan to pay off their debts over time. If you have a co-signer on your loans, we can advise you on what happens with them in a Chapter 13 plan.

Ideal Candidates for Chapter 13 Bankruptcy

Those best served by Chapter 13 are usually people with a regular income who face overwhelming debt but wish to avoid the complete liquidation of assets associated with Chapter 7. Specifically, Chapter 13 is well-suited if you have significant equity in a home or other property you wish to protect, as it allows you to reorganize your debt and maintain ownership. Moreover, if you are behind on vehicle payments but can catch up through a structured plan, you will also find Chapter 13 advantageous. 

Can Creditors Come After You After Chapter 13 Bankruptcy?

After filing Chapter 13, creditors cannot call you at home or work. They cannot send you letters, sue you, garnish your wages, or seize your property. They must direct all contact with you through your attorney’s office. This is referred to as an "automatic stay" that takes effect once the bankruptcy is filed.

Here are some key protections Chapter 13 can provide even if you are already being garnished or a judgment has been entered against you:

• Chapter 13 stops garnishments 
• Chapter 13 stops foreclosures and repossessions 
• Chapter 13 stops harassment
• The IRS can be paid through Chapter 13
• It is possible to substantially lower payments on cars or furniture

Key Benefits of Filing for Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy provides a number of benefits for you to reap.

For many individuals and families, key advantages of Chapter 13 include:

• Keeping important assets: There is an increased likelihood of keeping assets such as your home and vehicle while you catch up on missed payments.
• Consolidating debts: Your debts are combined into one manageable monthly payment instead of juggling multiple due dates and creditors.
• Peace of mind: You gain relief from creditor pressure and a clear plan to manage your debts moving forward.
• Structured repayment: You gain a long-term plan that helps rebuild your financial life over three to five years.