Though bankruptcy filings may be decreasing nationally, Tennessee remains among the top 3 states in the nation for bankruptcy filings. Bankruptcy filings in a neighboring Tennessee city just southwest of the Cleveland area were up somewhat in the first half of 2018 which brings them up to their highest level in five years for the first six months of the year. Bankruptcy filings have increased slightly each year since 2014 as the economy has improved and population numbers and borrowing has increased.
In Tennessee, the number of individuals and businesses filing for bankruptcy protection is almost double the national per capita rate. Bankruptcy protections are in place to help struggling consumers, and businesses, enjoy debt relief and a fresh financial start as they move forward. There are different types of bankruptcy protections that are available depending on the situation and circumstances.
Chapter 7 bankruptcy protection allows the filing party to liquidate assets to repay creditors. It is important to note that some types of property may be exempt from the Chapter 7 bankruptcy process which may help ease the fears of some seeking help through bankruptcy. Chapter 13 bankruptcy is a reorganization bankruptcy option that allows the filing party to reorganize debt and repay it over time. Both options initiate an automatic stay of creditor collection activities once a filing for bankruptcy protection has been made during which time creditors cannot pursue collection actions.
Different bankruptcy protection options are available because the law realizes that individuals in different situations may wind up struggling with overwhelming debt and need help. It is important to be familiar with the different options available and how they meet the needs of the individual seeking a fresh financial start.