Tennessee faces the same economic difficulties that most other states have experienced in recent years. If you own a business, a home, a vehicle or any other major asset, you might be worried about losing it if a financial crisis hits. Perhaps you are already past that point and have determined that filing for bankruptcy is the best means of eliminating debt and getting your finances back on track. Be sure to review the lookback rules before processing your petition.
A lookback period is basically a time permitted by law that official entities may use to assess certain financial transactions, such as income, debt or taxes, over time. The purpose of the lookback period is three-fold: to identify potential fraud, to determine which bankruptcy program you qualify for or to gather information that will help create a repayment plan.
The Chapter 7 means test includes a lookback period
You may be eligible for Chapter 7 bankruptcy if your income is at or below a certain level. The means test compares your income throughout a lookback period against other people’s incomes in your state who have similar-sized households. The lookback period may not always be accurate. For instance, if you received a bonus at some point, it will factor in as part of your income during that time, which can cause inaccuracies in the overall review of your average income.
Did you make any transactions that violate bankruptcy rules?
The lookback period is used to identify problematic financial transactions, meaning transactions that violate bankruptcy rules. Such roles have to do with how you prioritized payments for loans. If you’re unsure of bankruptcy transaction rules, it is best to seek additional guidance and clarification to avoid obstacles that can delay or impede your ability to obtain debt relief.
Rebounding from financial crisis
If you’re a Tennessee resident currently struggling financially, it’s advisable to research bankruptcy options. Many people have not only been able to alleviate debt but create a stronger financial plan for their futures, as well. There is no shame in reaching out for guidance and support when finances get out of hand and you are seeking a way to pay back lenders and alleviate personal debt. Bankruptcy may allow you to wipe the slate clean and start afresh when liabilities far exceed assets and you need assistance to restore solvency.