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Chapter 7 basics

Tennesseans in need of debt relief have several options available to them. One option is to file for a Chapter 7 bankruptcy. Chapter 7 bankruptcy, in a nutshell, involves the debtor selling of non-exempt property and then using the proceeds to pay off creditors. Whatever debt remains after proceeds have disappeared likewise disappears.

To be eligible for a Chapter 7 bankruptcy, a debtor must meet three criteria. First, they must pass a means test. Second, they must have went through credit counsel from an approved credit-counseling agency in the previous 180 days. And, third, they cannot have had bankruptcy petition dismissed in the previous 180 days if the dismissal was either because the debtor voluntarily dismissed the petition or because of the debtor's willful failure to comply with court orders or appear before the court.

Assuming a Tennessean qualifies, the first step is to file a bankruptcy petition. The petition should include a statement of financial affairs and schedules for assets and liabilities, current income and expenditures and executory contracts and unexpired leases. In addition, a filer must provide the bankruptcy trustee with a copy of recent tax returns. Other documents may also be necessary depending on the circumstances.

As soon as a petition is filed, the court will issue an automatic stay. An automatic stay immediately orders all creditors to stop trying to collect on the filer's debt. That means creditors cannot call, write or e-mail. If they do, they might be in legal hot water.

Following the petition, a trustee will oversee a meeting between the filer and the creditors. At the meeting the filer will be asked questions by both the trustee and the creditors. Within 60-to-90 days of the meeting, a filer will usually be discharged of most, if not all, of their debt.

Tennesseans desiring debt relief may benefit from speaking with an experienced bankruptcy attorney.

Source:, "Chapter 7 - Bankruptcy Basics," Accessed Dec. 29, 2015

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

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Phone: 423-933-1606
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