This blog recently discussed the business bankruptcy of a Tennessee company, however, Tennessee led the country in personal bankruptcy filings during 2015. There were a total of 36,052 bankruptcy filings in Tennessee in 2015 which is twice the average number of bankruptcy filings throughout the nation. Unfortunately, factors that contribute to this include that Tennessee can be friendly to creditors, allowing them to quickly garnish wages or foreclose on a house.
In Tennessee creditors are able to obtain judgments, such as for a credit card debt, and garnish wages. In addition, foreclosure is not a judicial process in Tennessee so creditors are able to more quickly foreclose on a property. The bankruptcy process can slow creditors and provide help to struggling consumers. Once bankruptcy is filed for, an automatic stay is entered that prevents creditors from proceeding with collection actions while the bankruptcy process is proceeding.
Different bankruptcy options can be helpful for struggling consumers facing overwhelming debt and seeking debt relief. For those who qualify, Chapter 13 bankruptcy provides an opportunity for the filing party to reorganize debt and pay it back that way. For others who qualify for Chapter 7 bankruptcy, non-exempt assets are liquidated to repay debts. Either option provides the opportunity to eliminate debt but also provides important protections for the filing party.
The burden of debt is a difficult one which is why the legal process provides bankruptcy options to help. Struggling consumers, who are not alone, should be familiar with the different options available to them, and benefits of each, before deciding which is best for them.
Source: Daily News, "Why is Tennessee's Bankruptcy Rate So High?" May 7, 2016