Chapter 13 Bankruptcy Payment Plan Examples in Tennessee (2025)

Filing for any kind of bankruptcy can be a very difficult decision, and it’s not one that you should take lightly. When you choose to file for bankruptcy, it’s generally the last resort after dealing with a long and complicated legal situation that has left you overwhelmed and feeling like you only have one option left. You may want to look at bankruptcy as the start of something new. You should consider Chapter 13 bankruptcy payment plan examples in Tennessee. The team at Kerney Law Firm can help you understand how these plans work and which option may suit your financial circumstances.

When you choose to file for Chapter 13 bankruptcy, you may want to consider bringing in an experienced bankruptcy lawyer to help you accomplish what you need. It may be safe to say that you may not know that much about bankruptcy, including what it is and why it may be an option for you to restart your financial security. An experienced lawyer can provide you with the resources and knowledge that you need to make the most informed decision you can.

What Is Chapter 13 Bankruptcy?

Simply put, chapter 13 bankruptcy is a legal process that lets certain qualifying individuals reorganize their various debts and repay them over time through a court-ordered repayment plan. It focuses largely on reorganization instead of liquidation. It is often referred to as the Wage Earner’s Plan due to its ability to allow people to keep their assets while also addressing their debt in a progressive way.

Chapter 13 bankruptcy in Tennessee tends to last anywhere between three and five years, depending on the needs of the individual in question and how much they have to pay back. This form of bankruptcy can halt a home foreclosure or vehicle repossession and give you the time you need to pay back your debts and refocus your financial future.

According to information gathered by the United States Bankruptcy Court, Eastern District of Tennessee, there were over 3,000 Chapter 13 bankruptcy filings throughout the state in 2024 alone. So far, in 2025, there have been over 1,500. Filing for bankruptcy can make you feel like your finances are not in great hands. You may want to consider reaching out to a local financial support group, such as the Financial Empowerment Center (FEC), for financial counseling.

Chapter 13 Bankruptcy Payment Plan Examples in Tennessee

It can be difficult to understand exactly how your debt is restructured under a Chapter 13 bankruptcy repayment plan. It can be difficult to determine which plan ultimately works for you and provides you with the most effective and positive outlook. Before deciding on a repayment plan, consult with a bankruptcy lawyer to see what they have to say about your case. An example of what a Chapter 13 bankruptcy payment plan would look like could be considering credit card reduction.

In this example, a household family of four has substantial credit card and medical debt. Both spouses are working, but the debt has gotten too large to handle among themselves. With a monthly shared income of a little over $4,300, it’s vital that they stick to a newfound budget to wipe out their shared debt, which amounts to around $280,000.

By filing for Chapter 13 bankruptcy, this family’s credit card and medical debt can be restructured into a workable payment plan, allowing them to refocus on taking care of everything else. Aside from their mortgage, they could be debt-free after around three years. Their credit may be vastly improved simply by acknowledging the debt and sticking to consistent payments.

During the payment plan, they may be protected from creditors, and their debt will be manageable. Without filing for Chapter 13 bankruptcy, they may have accrued even more debt from an unbalanced budget. The filing could potentially save them thousands.

FAQs

Q: What Is a Typical Chapter 13 Payment Plan?

A: A typical Chapter 13 bankruptcy payment plan is a structured plan that can complete payments within a specified amount of time. During this time, debtors make consistent payments to the right people to a designated trustee, who would then distribute funds from the trust to the appropriate creditors. The goal is to have an affordable monthly payment plan that considers each debtor’s income and necessary expenses.

Q: How Can I Calculate Chapter 13 Plan Payments?

A: If you want to calculate what your Chapter 13 plan payments are going to be, you must consider all the financial necessities and drawbacks in your life. This includes your monthly income, your necessary expenses, your total debt, and the assets at your disposal. From there, you should consult with a bankruptcy attorney who can ensure that your plan is structured soundly after calculating your total monthly income and expenses. What’s left over is disposable income.

Q: What Is a Chapter 13 Bankruptcy 100% Repayment Plan?

A: A Chapter 13 bankruptcy 100% repayment plan refers to a specific type of plan where the debtor commits to paying back 100% of their debts, including all secured and unsecured debts. Unlike some other repayment plan options, this plan has no discharge of remaining debt when the plan has finished. This plan can be risky if you do not have the funds to take on such a potentially substantial burden.

Q: How Can I Get the Lowest Chapter 13 Payment?

A: If you want to get the lowest Chapter 13 payment possible, you will need to structure your plan in such a way that your payments to creditors are minimized while still complying with the state’s bankruptcy laws. This involves carefully considering your monthly income, your assets, and your expenses. You may want to consider reaching out to a bankruptcy lawyer who can help you determine a way to reduce your payments to the smallest amount.

Tennessee Chapter 13 Bankruptcy Lawyer

Choosing to file for Chapter 13 bankruptcy can be a financial lifeline that preserves your credit and gives you a chance to catch up to your debts. The actual filing process can be complex and difficult to navigate. You may want to hire a bankruptcy lawyer to help you through it.

The legal team at Kerney Law Firm understands the kind of legal help you’ll need. Contact us to speak with a valued team member about your case.