More and more people are facing devastating debt. Paying off this debt can seem impossible, even to people who have gone through debt reorganization and an extended repayment plan. Overwhelming medical bills, personal loans and credit card charges, for instance, plague many people.

If you find yourself in this situation or in one similar to it, Chapter 7 bankruptcy may be the best option for you. Chapter 7 bankruptcy can eliminate most or all of your debts and, at the same time, allow you to keep certain assets that do not exceed exemptions. It can also allow you to walk away from a mortgage you can no longer afford and stop a foreclosure in order to give you enough time to find a new place to live.

At The Sexton Law Firm, we have over 25 years' experience helping people just like you navigate bankruptcy. We can help you maximize the assets you get to keep and minimize those that are liquidated. Call us today at 865-297-5242 to discuss your specific circumstances with our bankruptcy team.

Chapter 7 vs. Chapter 13

Chapter 7 bankruptcy is different from Chapter 13 bankruptcy because there is no reorganization of debt and no payment plan. If you are behind on your mortgage, for instance, you will most likely have to give up your home under Chapter 13.

Chapter 7 bankruptcy is referred to as "liquidation" and involves selling a person's nonexempt property; the proceeds of the sale are then distributed to the person's creditors. This typically results in a person being discharged from paying most of what debt remains. Call us for a free consultation to determine which path is best for you.

Filing For Chapter 7 Bankruptcy

Before you file for Chapter 7 bankruptcy, we at The Sexton Law Firm will evaluate your assets, debts and income to ensure that filing for bankruptcy is in your best interest. Once determining that Chapter 7 is right for you, we will move forward with the means test. The Bankruptcy Code requires that every person that files for Chapter 7 must qualify by proving that his or her income is above the state median. Additionally, you must undergo credit counseling with an approved agency.

Filing for Chapter 7 bankruptcy, or debt liquidation, can stop a pending foreclosure for anywhere from a few weeks to a few months. Once you have filed for Chapter 7 bankruptcy, your mortgage company will file a motion for relief from stay with the bankruptcy court. This motion will take about three or four weeks to complete and will lift bankruptcy protection from your mortgage in order for the mortgage company to restart the foreclosure process.

What Are Exemptions?

After we have successfully met all of the requirements for Chapter 7 bankruptcy, we can move forward with your bankruptcy. During this process, a trustee will gather and sell your nonexempt assets. At The Sexton Law Firm, we will work with you to decide which exemptions to claim for your specific situation. Types of exempt assets we can help you keep in whole or at least part include, but are not limited to:

  • Personal effects and clothes
  • Jewelry
  • Household goods such as furniture and appliances
  • Tools of the trade
  • Homestead equity
  • Vehicle equity
  • Retirement plans
  • Insurance policies
  • Workers' compensation
  • Personal injury claim income

Once the sale of your nonexempt assets is complete, the proceeds will go toward paying your creditors. Any remaining debts that are eligible are then discharged; there are some debts that cannot be discharged, however. These include alimony and child support and certain taxes, educational loans, personal injury debts and criminal restitution debts.

Filing for Chapter 7 bankruptcy is a complicated process. In order to navigate the process successfully, it is important to have the experience and skills of our bankruptcy team in your corner. For a private consultation to discuss your bankruptcy options, call us today at 865-297-5242 or fill out our online quick contact form.