Chapter 7 bankruptcy is a legal tool that may help some Tennessee residents eliminate their debts and improve their financial futures. However, as it does require individuals to meet certain criteria, it is important that readers talk to their attorneys about whether this form of personal bankruptcy will meet their needs. Chapter 7 bankruptcy requires individuals who do not have enough income to sell off or liquidate their assets in order to have funds to pay their creditors.
Asset liquidation is, therefore, just that – the sale of personal and real property. Readers may have seen signs in the windows of stores that say “warehouse liquidation,” indicating that the businesses are attempting to sell off their inventory for cash. Those businesses may be choosing to close or may be involved in the Chapter 7 bankruptcy process.
If a person has income and the ability to set aside money to provide their creditors with payments toward their debts, then that person will likely not qualify for Chapter 7. Chapter 13 bankruptcy may be a better plan for them, as they are able to craft their own repayment plan for the satisfaction of their outstanding debts.
Before agreeing to a bankruptcy plan or selling off one’s property in an attempt to find money for their creditors, readers should stop and seek the advice of a legal professional. The failure of a debtor to follow the strict rules set forth by the Bankruptcy Code may deny them the opportunity to use Chapter 7 bankruptcy or Chapter 13 bankruptcy to achieve their goal of becoming debt free.
