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Alternatives to Chapter 7

Life can be tough. People get sick, businesses go sour, stock markets crash. When these events happen to Tennesseans, they may consider filing for bankruptcy. In many cases, doing so can be an important first step towards getting their financial houses back in order.

Tennesseans who choose to file for bankruptcy have a variety of options, including Chapter 7, 11 and 13. Chapter 7 is perhaps the version that most people think of when they think about bankruptcy. Under Chapter 7, a bankruptcy trustee sells all of a debtor's nonexempt assets. The proceeds of that sale are then distributed to creditors. Following the sale, the debtor can take his exempt assets and start a new chapter in his or her life.

Under Chapter 11, Tennesseans who own a business avoid liquidating all of their nonexempt assets. Instead, they try to adjust their debts by reducing them, extending the repayment period or through reorganization of the business.

Under Chapter 13, Tennesseans with a regular income establish a payment plan. Pursuing Chapter 13's payment-plan option gives people a chance to catch up to their past-due payments. Chapter 13 also has the added benefit that it can protect debtors' homes from foreclosure.

Whatever the reason, Tennesseans who find themselves in difficult financial straits may wish to considering filing for bankruptcy. Doing so can have a number of benefits. For one, as soon as a person files for bankruptcy, the bankruptcy court will issue an automatic stay. This stay puts an immediate halt to creditor harassment, wage garnishments, creditor lawsuits and the filing of new liens. To learn whether bankruptcy might be the right choice, Tennesseans may want to consult with an experienced bankruptcy attorney.

Source:, "Chapter 7 - Bankruptcy Basics," Access May 12, 2015

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

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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