Before arriving at the point where you believe that it is necessary to file for bankruptcy, you probably dealt with things such as debt collectors calling you at all hours and wage garnishment. It is not easy to arrive at the point where you believe that bankruptcy is the right choice, but it could offer you the chance at a better and brighter future. Now, you have to decide which chapter is ideal for your situation.
Bankruptcy is the process of dealing with certain types of debt, and there are two main options available to consumers, Chapter 7 and Chapter 13. The right option for you depends on the types of debt you have and other factors unique to your situation. An assessment of your case can help you see which option is best for your financial circumstances.
You should file for Chapter 7
Chapter 7 bankruptcy is the most popular option for consumer bankruptcy because this process is usually completed within a few months. While it is liquidation bankruptcy, certain exemptions allow the debtor to keep a significant portion of his or her assets.
You may be eligible for Chapter 7 if you have a lot of unsecured debt, such as medical bills or credit card bills, and you cannot follow the terms of a debt repayment plan. A means test will determine if you are eligible for Chapter 7. If you are not, you could be still have the option to file for Chapter 13.
You should file for Chapter 13
This could be the right option for you if you have a lot of debt secured to physical assets, such as your home. This may be right for you if your income is over a certain amount, and you will make payments according to the terms of a debt repayment plan. It takes a few years to complete this type of bankruptcy filing.
The benefits of bankruptcy
Regardless of the type of bankruptcy protection you seek, you will enjoy the benefit of the automatic stay upon filing. This protects you from further debt collection efforts against you, stopping contact from debt collectors and halting any efforts to secure payments.
If you are not sure if you are eligible for bankruptcy or how you should move forward from this point, it may be helpful to discuss your concerns with an experienced Tennessee bankruptcy attorney who can provide insight and guidance.