Overcoming debts can be difficult no matter what path a Tennessee resident chooses to pursue. Whether he selects a bankruptcy plan that allows him to repay his creditors over time or a plan that liquidates his possessions in order to provide him with a new start, either will have its challenges. However, there are some legal and personal reasons why a debtor may be more comfortable choosing Chapter 7 bankruptcy instead of Chapter 13 bankruptcy as his means of securing financial freedom.
This post will discuss some of the reasons why a person may prefer to file for Chapter 7 bankruptcy instead of Chapter 13 bankruptcy. For starters, a debtor may not want to deal with the lingering commitments of a repayment plan under Chapter 13. In Chapter 7 bankruptcy, a debtor is allowed to sell off some of his qualifying assets in order to satisfy his financial commitments and secure a new start in a relatively short amount of time.
Additionally, a debtor may not want to commit the money he makes in the future to the repayment of his past debts. This is what happens in Chapter 13 bankruptcy when a debtor’s future income is used to satisfy an approved repayment plan. Though some debts survive Chapter 7 bankruptcy, a debtor is generally granted a new beginning when his process is complete.
Not all debtors will qualify for Chapter 13 bankruptcy and thus by default they may have to pursue Chapter 7 bankruptcy. Attorneys who work in the bankruptcy law field can help their clients understand the requirements and benefits of each form of bankruptcy before they commit to a particular debt relief path.