Many households in Tennessee have been hit by financial challenges in recent years. While some families have been able to obtain enough additional income to cover their debt, others are teetering on the edge of financial ruin. Filing for Chapter 7 or Chapter 13 bankruptcy may be a viable option for those in need of immediate debt relief.
Bankruptcy often helps people bounce back from financial crises. One benefit of filing a petition is that creditors must stop pursuing payment for debts owed to them. A bankruptcy in progress also prevents lenders or others from filing a legal claim against the person in question.
Bankruptcy can also help Tennessee residents keep their homes
When a Chapter 13 bankruptcy plan is approved by the court, creditors must accept the restructured payment plan, sometimes extending the life of a loan and other times lowering monthly payments. When a particular debt is part of a mortgage loan, the lender cannot proceed with a foreclosure, no matter how late mortgage payments are at the time, pending further orders from the court. This is part of the automatic stay that prevents litigation. Under the Chapter 13 program, a homeowner usually has an excellent chance to avoid foreclosure.
It is not a one-size-fits-all process
There are several types of bankruptcy, each carrying its own eligibility requirements. Individuals and business owners may be able to restore solvency and guard against further economic damage by filing under the program that best fits their needs. A bankruptcy attorney can review a particular set of circumstances and recommend the best course of action.