Using The Law To Make Your Life Better

Know your options when it comes to consumer bankruptcy

David Sexton

Despite the recent years of a good economy in Tennessee and throughout the country, there are still millions of Americans who struggle with overwhelming debt. Some are right here in Tennessee. When your income is less than the debt you owe, you may feel like you are facing a dwindling number of options. However, consumer bankruptcy could be an option in even the worst of financial scenarios.

There are different types of bankruptcy filings for Tennessee residents to consider if they are thinking of taking this step to address their debt situation. First, there is Chapter 7 bankruptcy, commonly known as "liquidation" bankruptcy. This form of bankruptcy allows the person who files to list almost all debts, as well as assets, and then the bankruptcy trustee will sell off the applicable assets to apply the funds gained to debts owed. Once all applicable assets have been liquidated in this manner and the person's debts are addressed to the fullest extent possible, many other outstanding debts will be discharged. However, there are some types of debts that usually cannot be part of a bankruptcy filing.

Another common form of bankruptcy that Tennessee residents could explore is Chapter 13 bankruptcy. Under this form of bankruptcy, the filer will set up a three- to five-year plan to repay outstanding debt. While the plan is in effect, the creditors cannot hound the debtor for funds owed.

Tennessee residents have several options to consider if they are in a precarious financial situation. They should know their bankruptcy options. For more information about how our law firm attempts to help people who are in this type of situation, please visit the consumer bankruptcy section of our website.

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