When Tennessee residents hear the word "bankruptcy," they may automatically feel negative emotions toward the process. However, personal bankruptcy could be beneficial for individuals who have a considerable amount of debt and are unable to pay off balances on their own. Many parties file for Chapter 7 bankruptcy when they need assistance getting back on the right financial track.
Under Chapter 7, filers are typically required to sell property, also known as liquidation, in order to gain money to pay back debts. There are certain assets that are not subject to a sale in bankruptcy according to state exemption laws. Before a liquidation can take place, however, an individual must qualify for this type of bankruptcy. There are various aspects of a person's state of affairs that are considered -- such as income -- that could play a role in eligibility. If a person does qualify, he or she must then formally petition for bankruptcy.
Once a petition has been accepted, collection efforts against a person are required to cease. The individual will then go through the process of liquidation and paying back debts, under the supervision of a trustee appointed by the Bankruptcy Court. This process can take several months to complete, but it is a shorter time period when compared to other types of bankruptcy, like Chapter 13.
Making the decision to go through with bankruptcy may be a difficult one for many individuals. However, there could be considerably beneficial outcomes for individuals who are struggling with debt and qualify for Chapter 7 bankruptcy. Residents who are interested may wish to find out how the processes for determining eligibility and petitioning for bankruptcy are carried out in Tennessee in order to work toward a better financial situation.
Source: investorplace.com, "Should I File for Chapter 7 Bankruptcy?", Jessica Whitmore, Jan. 9, 2015