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 Mcminnville, Tennessee before you file.
Chapter 7 Bankruptcy in Mcminnville, Tennessee
There are 2 typical forms of consumer bankruptcy in Mcminnville, 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 Mcminnville, Tennessee debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Mcminnville, Tennessee
In Mcminnville, Tennessee, Chapter 13 is substantially different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your specific situation. Chapter 13 Bankruptcy involves a court setting up a adjusted payment plan, which allows the debtor to pay off most or all of his debts over a extended 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 Mcminnville, Tennessee
The answer to this question depends heavily on your distinct situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
In any case, you should talk with a local Mcminnville, Tennessee bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely result. This will make it much easier for your to make an informed choice.