Bankruptcy is a legal process allowing an individual or business to have some or all of their debt excused. 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 Manchester, Tennessee before you file.

Chapter 7 Bankruptcy in Manchester, Tennessee

There are 2 typical forms of consumer bankruptcy in Manchester, 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 excused. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.

Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is excused. But some types of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Manchester, Tennessee debts are not dischargeable, you might want to consider options other than bankruptcy.

Chapter 13 Bankruptcy in Manchester, Tennessee

Chapter 13 Bankruptcy in Manchester, Tennessee is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.

Which Type of Consumer Bankruptcy Should I File in Manchester, Tennessee

Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your distinct 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 Manchester, Tennessee bankruptcy Attorney. Your Lawyer will be able to advise you of your options and their likely results, which will help you make a more educated decision.