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 Henderson, Tennessee before you file.
Chapter 7 Bankruptcy in Henderson, Tennessee
There are 2 common forms of consumer bankruptcy in Henderson, Tennessee: Chapter 7 and 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is discharged. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, essential personal items, and retirement accounts.
Once eligible assets are sold, and the money turned over to the creditors, most remaining debt is discharged. However, there are certain types of debt that cannot be discharged in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Henderson, Tennessee.
Chapter 13 Bankruptcy in Henderson, Tennessee
Chapter 13 bankruptcy in Henderson, Tennessee is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your particular case. Chapter 13 bankruptcy does not eliminate debt, it restructures it. This involves a court coming up with a new repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original agreements that created the debt in the first place. This creates a new payment structure, usually involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Henderson, Tennessee
Which Bankruptcy type to file under depends heavily on the facts of each individual case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
In any case, it would be a good idea to consult a local bankruptcy Attorney in Henderson, Tennessee. Your Attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).