Chapter 7 bankruptcy may provide financial freedom

Chapter 7 bankruptcy may provide financial freedom

| Nov 27, 2014 | Chapter 7, Firm News

Struggling financially can cause a person to feel powerless in Tennessee. However, Chapter 7 bankruptcy protection offers an individual the opportunity to have most, if not all, of his or her debt discharged when this debt has simply become unmanageable. There are many factors to be taken into account when deciding whether to pursue a bankruptcy filing.

Income is a chief factor that determines bankruptcy eligibility. Those who earn enough to pay the debts they’ve incurred often won’t qualify for a Chapter 7 bankruptcy. People who have filed for bankruptcy in the recent past usually are not eligible to file a second time.

A bankruptcy will remain on one’s credit report for a number of years. This can cause a person to struggle to get a loan from a bank, rent an apartment or buy a home. If a person who has filed for bankruptcy does end up securing a loan, his or her interest rate can be expected to be higher until such time as credit has been reestablished.

In a Chapter 7 bankruptcy in Tennessee, unsecured debt can be discharged, including medical and credit card debt. However, secured debt, child support and student loans are generally not dischargeable in bankruptcy. Nevertheless, when a person feels trapped by extensive debt and can’t seem to get ahead financially, bankruptcy is often a viable and responsible way to ease financial burdens and get a new start. While a trustee appointed by the Bankruptcy Court is charged with marshalling the assets of the filer and liquidating them for the benefit of creditors, exemptions according to state law provide for the retention of certain designated property.

Source: surfky.com, “Is Bankruptcy Your Best Option?”, Nov. 19, 2014