You may be one of many in Tennessee currently facing serious financial problems. Although your situation may be somewhat similar to another person’s, the causal factors that led to your financial crisis may be different. Some people are simply not good at handling their money. Many have shopping addictions and tend to spend more than they earn. Others get hit with unforeseen expenses they are completely unprepared to meet, such as major medical bills or credit card debt that adds up after losing a job.
Your current circumstances may fall somewhere in the middle of these descriptions or might be entirely different — the main point is that you know things have gotten out of control and you need immediate debt relief. Bankruptcy may be a viable option for you but determining which type of bankruptcy best suits your particular needs and ultimate financial goals can be quite challenging. With appropriate guidance, you may be able to find a solution to help get your financial life back on track.
Important facts regarding Chapter 13 versus Chapter 7
There are several major differences between Chapter 13 and Chapter 7 bankruptcies that may impact your decision as to which path to take when seeking an immediate debt relief solution to a serious financial problem. The following information may help clarify the issue:
- Chapter 7 activates a complete liquidation of all your non-exempt assets. The sum of the value of those assets will be used to satisfy your debt.
- Chapter 13, on the other hand, allows you to retain possession of your assets and uses your own income to make payments to your creditors.
- A key factor that makes you eligible for Chapter 13 is whether you have proof of continual future income that is satisfactory for making payments.
- If you are currently incarcerated or in other circumstances that have severely restricted your income or made it non-existent, this option may not work for you.
- Even if someone else agrees to make payments on your behalf, the court may determine such gifts inadmissible as income on your Chapter 13 application, which might render you ineligible for this type of bankruptcy.
You may feel a bit overwhelmed and confused when trying to figure out the best game plan to help you overcome your current financial problems. Remember that most financial crises are temporary, and by implementing the best option available for you, you may be able to satisfy your debt and lay the foundation for a future that includes restored financial stability.