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Bankruptcy can be a way out of financial peril for some

Filing for bankruptcy is a big decision, and is not one that most people in Tennessee take lightly. However, the bankruptcy process does give debtors a chance to address their debts and start over with a clean slate.

There are a number of factors that one may consider when deciding to file for bankruptcy. Individuals who are living from paycheck to paycheck, and are still behind in their bills, utilities and rent or mortgage payments may want to consider bankruptcy. Also, debtors who are only making the minimum payments on their credit cards, use one credit card to pay for a second one or use credit cards to pay for necessities may want to consider filling for bankruptcy. There may be other reasons why individuals choose to file for bankruptcy as well.

If you are interested in filing for bankruptcy, even before making an appointment with an attorney, there are some steps you can take. First of all, take stock of each and every one of your unpaid bills. Then create a list of what your regular monthly bills are. Finally, create a list of all of your financial assets. This will help you determine if your debts are more or less than your assets.

After this, you may choose to file for bankruptcy. First of all, filing for Chapter 7 or Chapter 13 bankruptcy can result in having many of your debts cleared, allowing you to move forward relatively debt-free. In addition, by filing for bankruptcy an automatic stay is issued, which makes it so that certain debt collectors must temporarily cease their collection actions. In addition, just because you file for bankruptcy doesn't mean you'll lose all your possessions. A Chapter 13 bankruptcy allows you to keep your home and other possessions, and even though a Chapter 7 bankruptcy liquidates your assets, there are some exemptions for assets you are able to keep.

While not all debts can be cleared through bankruptcy, it is still a very viable option for those who are facing overwhelming unpaid bills. While there are many personal reasons why an individual falls so far behind in his or her debts, it is good to know that there is a way out. Bankruptcy can be the fresh start one needs to move forward on the right financial foot.

Source: Forbes, "What Your Lawyers Don't Tell You About Bankruptcy," Neale Godfrey, Aug. 16, 2015

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

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