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Overcoming financial challenges with a straight bankruptcy

Financial challenges are not unusual in Tennessee and across the nation. While many might not think that bankruptcy is a viable option, it is a method to debt relief and moving on with a new start. Some of the terms, however, might not be fully understood. One such term is straight bankruptcy. Simply put, straight bankruptcy is another way to describe a Chapter 7 bankruptcy. This allows people who are having problems with debts to clear them legally.

Debtors will be able to discharge any debt that is unsecured. This includes credit cards. The debtor will also be able to retain some assets as they start over. If there are non-exempt assets, these will be sold for the creditors. One problem that is garnering substantial attention in recent years is student loan debt. Unfortunately for those with student loans and an inability to pay, these are not dischargeable. Other debts that are not dischargeable include those owed to the Internal Revenue Service or those stemming from criminal activity.

Property must be surrendered to the court and it will be divided among the creditors. If there is property that the debtor needs to survive, it cannot be taken. That includes a home and usually a motor vehicle. This depends on the mortgage and payments. Any asset that exceeds bankruptcy exemptions according to the law must be surrendered. In years past, a straight bankruptcy was possible for anyone, but alterations to the law changed that. Bankruptcy is only available to those whose earnings are less than the median for the state. Chapter 13 is an option for those who do not fall into this category.

There must be credit counseling along with a straight bankruptcy filing. Large debts will not be dischargeable if they are made within a certain period prior to the bankruptcy, so a debtor will not be able to go on a spending spree and file for bankruptcy while keeping the products that were purchased. There are many nuances to filing for straight bankruptcy and it is imperative to have a handle on them prior to moving forward. Discussing the case with a lawyer is the first step.

Source:, "What Is Meant by 'Straight' Bankruptcy?" accessed on July 16, 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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