Making the choice to file for bankruptcy can be complicated. You may feel embarrassed that your financial situation has reached this point, or you may not know what to expect once you file. It can be helpful to learn more about the bankruptcy process and what happens if you need to move forward with this process.
Chapter 7 bankruptcy is a popular option because it only takes a few months to complete. It is particularly beneficial for individuals who have a significant amount of unsecured debt, such as credit card balances and medical bills. During the Chapter 7 process, there will be a discharge of certain balances. This essentially releases you from liability for those balances permanently. Creditors will not be able to continue to contact you about these debts.
What happens during bankruptcy?
There is more to Chapter 7 bankruptcy than simply completing the paperwork and seeing your debt disappear. There are strict eligibility requirements to even start this process, and you will have to do certain things before the discharge will take place. In many Chapter 7 proceedings, the discharge is complete after about four months. During the Chapter 13 bankruptcy process, the discharge will take place after certain balances are paid, typically after three to five years.
In Chapter 7, several different types of debts are eligible for discharge. This includes personal loans, credit card debts, judgments from a lawsuit, medical bills, lease contracts and other types of unsecured debts. There are limits to what is dischargeable, and there can be complications if there is litigation related to some of the debts.
The best option for you
Bankruptcy offers many benefits for financially overwhelmed consumers. However, it is not always the best choice in every situation. There could be other ways for you to regain your financial footing, and an assessment of your case can help you learn more about your options. Before you make any important decisions, it is in your interests to learn about the benefits and potential drawbacks of bankruptcy.
Your future starts now
If you are struggling with overwhelming debt, there is hope for you. Speaking with an experienced Tennessee bankruptcy attorney is a practical way to learn about what will happen if you file for Chapter 7 and how this choice could be optimal for your financial future. Your legal ally can also provide invaluable guidance at every step of the bankruptcy process.