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Understanding bankruptcy is important for Tennessee residents

The economy has hit a lot of Tennessee residents hard lately. People are earning less money, paying more for groceries and gas, carrying higher student loan debts and paying more for medical care than ever before. All these factors combined can make it difficult for people to make ends meet.

Therefore, many people are turning to bankruptcy in order to get a fresh financial start. According to new data, 23 percent of American households have considered filing for bankruptcy in order to solve their money problems. This data also shows that most people -- 55 percent -- believe that bankruptcy allows people to have a fresh financial start. People with incomes lower than $40,000 a year were most likely to think about filing for bankruptcy.

However, this data also shows that there are some misconceptions about bankruptcy. Of those survived, 26 percent of people thought that it was shameful. Furthermore, only 26 percent of people knew that a Chapter 7 bankruptcy can stay on a person's credit history for 10 years. Finally, only 31 percent of people knew that student loan debt may not be discharged in bankruptcy.

These are important facts to consider before filing for bankruptcy. Another important part of bankruptcy to keep in mind, are bankruptcy exemptions. People may be under the impression that all of their property will be lost in a Chapter 7 bankruptcy. However, the reality is that state exemptions and federal exemptions will allow people to keep many of their personal belongings. These exemptions can help people to keep heirlooms, their cars, their retirement savings and even spousal support.

Tennessee residents do not need to suffer under heavy debt loads because debt relief is available. However, people should make sure they fully understand the positives and the downsides to filing for bankruptcy before making a decision.

Source: Main St., "One-Quarter of Americans have Considered Filing for Bankruptcy," Hal M. Bundrick, Feb. 26, 2014

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

Toll Free: 888-376-0282
Phone: 423-933-1606
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