Bankruptcy from a Memphis Perspective

Bankruptcy from a Memphis Perspective

Bankruptcy from a Memphis Perspective

Being a Memphis bankruptcy lawyer has an unique character in that Memphis has the highest bankruptcy filing rate in the nation. Bankruptcy in Memphis is also unique in that the number of Chapter 13 as opposed to Chapter 7 Bankruptcies is well over half. Nationally, Chapter 7 is filed over seventy percent of the time.

Chapter 13 requires the repayment of a portion of your debt. The most important feature is that if one is behind on a house or car for example, a Chapter 13 bankruptcy will allow to make up the amount you are behind and keep the property. The plans generally last for five years and involve the debtor paying all of their disposable income either reasonable expense figures or IRS standard expenses to the US Trustee who will dispense the money per the Chapter 13 plan for between three to five years.

Debtors using chapter 13's can have a success rate under 1/3rd. It is easy to ask oneself why Memphians use Chapter 13 so frequently, More generous explanations are that being a biblical town, trying to repay some of the debt is more congruent with Christian principles prevalent in the area. A less charitable explanation would be that lawyers use Chapter 13 for the higher associated fees chargeable over the life of the plan. Chapter seven fees must usually be collected upfront or they might be discharged.

Another good explanation would be that Tennessee has a very restrictive homestead exemption of $4000 so in order to keep property valued above that amount debtors choose to make payments. In some cases it could be that a lapsed chapter thirteen plan could be due to positive causes. It could be attributable to an increase in income or positive change in circumstance causing the debtor to be able to repay the debts and no longer need bankruptcy court protection.

Chapter thirteen includes a fairly onerous continuing documentation requirement . Still keeping property you are behind on would be the only clear circumstance where a chapter 13 would be called for.

A Chapter 7 is the traditional bankruptcy. You don't keep stuff in excess of the homestead amount, but you get the immediate relief from debt without the necessity for payments. You can usually also keep a home or vehicle in which you are current with the payments.

I strongly recommend you to consider filing for a Chapter 7 if at all possible. Remember much of the consternation with the much talked about bankruptcy reforms was the means test, the central downside was that it required those who have means to file Chapter 13.

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