Incarcerated people in Tennessee may be unable to file for Chapter 13 bankruptcy if they cannot demonstrate that they have enough income to make payments on their own. Chapter 13 allows people who file for bankruptcy to keep some property, but they must arrange to make payments over three to five years.
In a recent case, a man in Illinois who was incarcerated tried to file for Chapter 13 bankruptcy. However, his income was only about $14 per month. His parents said they would pay $25 per month, but the bankruptcy court ruled that this could not count as regular income. The man, however, may still be eligible to file for Chapter 7 bankruptcy. A Chapter 7 bankruptcy allows an individual to discharge their debt and keep some assets, which are considered exempt, while others may be liquidated.
The man was facing the possibility of a judgment in a civil case and had filed for bankruptcy before there was a default judgment. The case was a wrongful death suit that arose from an alleged drug sale.
People who are struggling to keep up with their expenses might wonder if bankruptcy is the right solution for debt relief. They might be concerned that they will lose assets, that their credit will be permanently ruined or that filing for bankruptcy would be irresponsible. However, the individual may wish to speak with an attorney to find out if they qualify for Chapter 13 bankruptcy, allowing them to keep assets. Ongoing debt and failing to pay debts can be just as damaging to a person's credit as bankruptcy, and bankruptcy may offer a new start for an individual who can also rebuild their credit. Bankruptcy also does not remain on credit reports permanently. Finally, filing for bankruptcy may be the most financially responsible action a person can take in some circumstances.