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Chapter 7 sheds stigma, viewed as part of new economic landscape

More and more people are beginning to understand the vital role bankruptcy can play in the lives of the average Tennessee family. In some cases, people mistakenly look at bankruptcy with scorn or derision, judging those who filed as failing to meet their responsibilities. The truth, however, is far different. As more Americans become bogged down with debt, the truth about filing for Chapter 7 or 13 bankruptcy is finally starting to break through.

The current state of bankruptcy filing in the United States is concerning, but not because of the individuals filing. Rather, the concern is that such a large number of many people are at the point where they decide to file. The reality is that bankruptcy is quite often a reflection of the economic environment, rather than the individual filing. In recent years, for example, Americans witnessed a historic housing crisis followed by one of the most significant recessions in U.S. history.

Few Americans were left untouched by these events. With banks pursuing debts from years past, and many Americans struggling to find employment, consumers were left vulnerable to the slightest financial change. Furthermore, those who do find themselves in financial hardship often rely on credit cards and savings to manage even the very minimum payments due on their debt. In such situations, bankruptcy may become the only answer.

Filing for personal bankruptcy can help restore a family to financial solvency, providing them with the basic relief necessary to rebuild their lives.

Chapter 7 bankruptcy can provide relief while also reducing the impact bankruptcy can have on a person's credit score. Under this particular type of bankruptcy, the court weighs a person's income against their debt to determine the amount of relief necessary. This process is called a means test. At this point, the trustee assigned to your case will create a plan to clear the rest of your debt in order to prepare for the next phase of your life.

Source: Fox News, "How to know when it is time to declare bankruptcy," Robert Massi, June 30, 2012

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

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