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Narrowing down your bankruptcy options

Are you experiencing financial problems? It is safe to assume that you are not the only one in Tennessee who is struggling at this time. In fact, many of your own neighbors or co-workers are likely having similar problems, and a lot of people tend to avoid talking about such matters because they feel embarrassed.

Rather than feel embarrassed or ashamed, however, you can be proactive to seek immediate debt relief by researching bankruptcy options that are available. Whether you file for Chapter 7 or Chapter 13 depends largely on what your exact financial troubles happen to be. Regardless of which path you take, another key factor toward gaining a fresh financial start is to act alongside someone well-versed in bankruptcy law.

One chapter versus the other

Are you currently without income and with no foreseeable means for earning any in the near future? Perhaps you have a steady income but are in over your head and need some extra time to pay back debt. The following list shows the differences between Chapter 7 and Chapter 13 bankruptcy:

  • One of the eligibility factors of Chapter 7 is that you have to be able to pass a means test. This test measures your income against the average household income in Tennessee, and if yours is the same or lower, you may indeed be eligible.
  • Chapter 7 requires liquidation of your assets, which then converts to cash to pay back creditors.
  • Chapter 13, on the other hand, is more of a restructured payment plan. If your creditors agree, you will have a scheduled amount of time to make payments.
  • Sometimes, deferred payments are possible as well, and they simply get tacked on the end of your loan.
  • If you already filed for Chapter 7 or Chapter 13, whether or not you are able to file again depends on how long ago you filed the first time.

Things like taxes, child support, student loans, alimony or court fines remain liabilities even if you successfully file bankruptcy, as these types of debt are not dischargeable. So taking all of this into consideration, you will definitely want to weigh the benefits and downsides as they apply to your particular situation before determining what to do.

Bankruptcy often places an automatic stay against foreclosure and prevents anyone from pursuing litigation against you. It can also get collections agencies off your back. Overall, bankruptcy can be a viable option for financial restoration because it eliminates debt, wipes the slate clean and allows you to start afresh.

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Rothschild & Ausbrooks, PLLC
1222 16th Avenue South, Suite 12
Nashville, TN 37212

Toll Free: 866-656-8909
Phone: 615-866-2265
Fax: 615-242-2003
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