Bankruptcy is a legal process allowing an individual or business to have some or all of their debt discharged. It is almost always considered as a last resort because it can have some negative long-term consequences which must be considered, even if you ultimately decide that they are outweighed by the benefits. Bankruptcy is a creation of federal law, and goes through federal courts. Therefore, the procedure governing bankruptcy in Tennessee will be roughly the same as it is anywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Fayetteville, Tennessee before you file.
Chapter 7 Bankruptcy in Fayetteville, Tennessee
There are 2 common forms of consumer bankruptcy in Fayetteville, Tennessee: Chapter 7 and 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This usually includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some types of debt, however, can't be discharged in Chapter 7 Bankruptcy in Fayetteville, Tennessee. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Fayetteville, Tennessee
Chapter 13 Bankruptcy in Fayetteville, Tennessee differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 Bankruptcy involves a court setting up an adjusted payment plan, which allows the debtor to pay off most or all of his debts over a longer period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Fayetteville, Tennessee
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your individual situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Whatever your situation, you should speak with a local Fayetteville, Tennessee bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.