Though the number of individuals in the Chattanooga area needing to file for bankruptcy fell to a 10-year low last year, and the number of foreclosures also fell, Tennessee remains the leader in the nation for personal and business bankruptcies. In addition, increased interest rates and other factors are expected to increase the number of bankruptcy protection filings in the coming year. During 2016, 5,689 consumers and businesses filed for bankruptcy protection in the Chattanooga bankruptcy court. In addition, commercial bankruptcy filings increased by 26 percent.
Tennessee remained, however, number one for bankruptcy filings among all states during 2016. Tennessee residents filed for bankruptcy at greater than twice the average national rate during 2016. Chapter 13 reorganization bankruptcy protection is more common for consumers in Tennessee than Chapter 7 liquidation bankruptcy. In Chattanooga bankruptcy court during 2016, 61 percent of bankruptcy filings were Chapter 13 filings, while, nationally, 38 percent of bankruptcy filings were Chapter 13 filings.
Bankruptcy protection is an important option and tool for individuals struggling with debt. There are different bankruptcy options available for different situations. Chapter 13 bankruptcy protection allows the filing party to reorganize debt and repay it over time according to a manageable repayment plan. Chapter 7 bankruptcy protection provides for the liquidation of assets to repay creditors followed by a debt discharge. Both bankruptcy options end in a debt discharge for the filing party, though the process may be different.
Consumer and business bankruptcy options are a resource to consider to enjoy debt relief. It is important to be familiar with the range of options available to determine which will provide the best outcome for the individual situation and circumstances being addressed.
Source: Times Free Press, “Bankruptcies fall to 10-year low, but Tennessee still leads nation in going broke,” Dave Flessner, Jan. 15, 2017