Debtors file for bankruptcy in order to achieve the elimination of their outstanding financial obligations. This is known as a discharge, and whether a Tennessee resident pursues Chapter 7 bankruptcy or Chapter 13 bankruptcy their goal is essentially the same: have the court approve the repayment of their debts and release them from their financial binds.
Chapter 7 bankruptcy is a liquidations process, which means that a debtor must sell some of their property in order to have money to use to repay their creditors. It can be an exhausting and emotional experience for a Tennessee resident, and before going down the Chapter 7 path it is wise for individuals to know what they are getting into when they decide to file their bankruptcy paperwork. This post will discuss some of the advantages and drawbacks of the Chapter 7 process but readers are reminded that its contents are not exhaustive nor are they offered as legal advice.
The goal of any bankruptcy process is for a debtor to emerge from the process without the burdensome debts they carried prior to filing for bankruptcy protection. Whether they file for Chapter 13 bankruptcy and develop a repayment plan to satisfy their creditors or Chapter 7 and use liquidation to pay down their obligations, debtors hope to attain discharge and find financial freedom.
Readers of this Tennessee-based bankruptcy legal blog may not be aware of the fact that different bankruptcy proceedings have different eligibility requirements. With regard to Chapter 7 bankruptcy, a debtor may not earn too high of an income if they want to use the liquidation process to clear out their debts. The remainder of this post will explore how income is evaluated under the laws of Chapter 7 bankruptcy, but readers are reminded that its contents are not specific legal advice.
There is no doubt that for some people, the term "bankruptcy" is a loaded term. It may, in their minds, carry a stigma that suggests that those who use it to manage their overwhelming debts have somehow failed. It is important for readers of this Chattanooga-based bankruptcy law blog understand that bankruptcy is legal, it is important and it is a path that offers individuals choices on resolving their personal financial crises.
Last week, this Tennessee bankruptcy blog discussed some of the reasons that a person may not be able to pursue Chapter 13 bankruptcy. This week's post will focus on one of the major requirements a debtor must pass in order to be eligible to file for Chapter 7 bankruptcy: the means test.
For people in Tennessee who are experiencing financial problems, Chapter 7 bankruptcy can be a sound strategy to get back into a better position and move forward with their lives. The benefits of Chapter 7 are that it is relatively easy and will clear most unsecured debt. However, debtors are often concerned about how the process goes. Included in that is the meeting of creditors. Knowing how the meeting of creditors is handled can help a debtor prepare for it. If this is a sticking point in deciding to file for Chapter 7, it need not be.
When a Tennessean takes the step to file for Chapter 7 bankruptcy, it is done with the expectation that they will receive a discharge for their debts and they can move forward free of their financial challenges. However, it is not a guarantee that filing for Chapter 7 will lead to the discharge with no subsequent issues. The reality is that the discharge can be revoked. Understanding when this can happen and other possible sticking points to a bankruptcy is a solid strategy to avoiding them.
Tennessee debtors feeling overwhelmed by what they owe to creditors and other entities might not know what to do about their debts. Chapter 7 bankruptcy is often a viable option, but certain concerns will preclude some debtors from moving forward. One issue is what property is exempt, which itemps a person can keep. Knowing what falls into the exempt will provide a foundation as to whether Chapter 7 is the preferable option.
For debtors in Tennessee who are seeking a way to get a fresh financial start, sometimes the simplest questions are the ones that are most difficult to answer. Specifically, it is important to understand the exact purpose of filing for bankruptcy under Chapter 7. This is the most commonly used form of bankruptcy for people who are seeking relief from debtors. Chapter 7 can be filed voluntarily or involuntarily. It will involve the debtor, the trustee and the creditors. The trustee will oversee the asset liquidation by taking possession of non-exempt assets and selling them for cash to be distributed to the creditors.