If you find yourself in a place where you are unable to pay your bills, you may feel overwhelmed and unsure of what to do next. Financial difficulty can arise from circumstances beyond your control, such as a medical emergency or a job loss. When you are in this position, you may not be able to find a way out without help or a way to deal with certain types of debt.
Many Tennessee consumers choose to deal with their debt by filing for bankruptcy. This is not an easy choice to make, and it can be difficult to realize that you need help in order to improve your financial situation. Before you make any important decisions that may impact your future, it can be helpful to understand what this process entails and whether it is beneficial for your unique circumstances.
Where should you start?
Making the choice to file for bankruptcy is only the first step of the process. After making this decision, you’ll need to know about the various bankruptcy options available and which one is best for you. The two main types of consumer bankruptcy include:
- Chapter 7 – Chapter 7 bankruptcy takes a few months to complete, and it is the option for people who do not have sufficient income to make payments in a bankruptcy plan. It is a beneficial choice for those with significant unsecured debt.
- Chapter 13 – This is an option for those who can make payments in accordance with a bankruptcy plan. It takes a few years to complete, and it is optimal for consumers who want to stop foreclosure and keep assets.
There are eligibility requirements for each chapter of bankruptcy. A means test will determine if you could file for Chapter 7, but if you do not qualify, Chapter 13 may be an option. Before you move forward, it is prudent to carefully weigh all of the options available to you, including potential debt relief options and more.
Regain your financial footing
If you think bankruptcy is the right way for you to deal with your debt, you may want to start by seeking an evaluation of your case with an experienced bankruptcy attorney. This can help you identify the right way forward in your efforts to regain your financial footing, as well as provide you with guidance as you navigate the bankruptcy process.