Being a Memphis bankruptcy lawyer has a 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.

A Chapter 13 bankruptcy allows one to repay part of all of the debt owed. The most important feature is that if one is behind on a house or car for example, a Chapter 13 bankruptcy will allow making 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.

Figures vary, but it is commonly accepted that approximately one-third at best of Chapter 13 plans will end up being completed. So why are Chapter 13 plans so frequently used in Memphis? 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. Less generous explanation are that being a less economically gifted area, Chapter 13 offers a way for lawyers to get paid without having their clients to come up with ready cash. This is opposed to a Chapter 7 plan where the lawyer's fee would technically be discharged as a debt if not paid before filing.

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. It is also not clear that failure to complete Chapter 13 plans is always a bad thing. 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 13 will also impose on you the requirement of providing the Chapter 13 trustee with a yearly copy of your tax return and if your income goes up, the trustee can ask for higher payments. The one clear instance where a Chapter 13 is called for is where you are behind on property with substantial equity and you have a now steady monthly income which will allow you to cure the deficiency.

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.

For more information about filing bankruptcy in Memphis, Tennessee contact Memphis Bankruptcy Lawyer David Sandy, a debt relief agency that helps people file for relief under the bankruptcy code.