Bankruptcy is a serious legal process that requires individuals to meet significant mandated tasks in order to eventually reach debt discharge. Those who file for Chapter 7 bankruptcy must agree to sell off some of their assets through liquidation in order to acquire enough money to pay off their creditors as fully as possible and work through their bankruptcy processes. In order to use Chapter 7 bankruptcy and its liquidation requirement Tennessee residents must first qualify for it.
Some individuals may be denied the chance to use Chapter 7 bankruptcy if their incomes are too high. Chapter 7 is generally reserved for those who do not have the discretionary income to put toward paying down their debts, and those debtors who can reorganize their income and debts so that repayment is an option may have to use Chapter 13 bankruptcy instead of Chapter 7.
Additionally, individuals who have filed for bankruptcy in the not-so-distant past may not be able to use Chapter 7 to eliminate their debts. If a debtor has a Chapter 7 discharge within eight years of their filing or a Chapter 13 discharge within six years of their filing then they may not file for Chapter 7 bankruptcy again.
A number of other requirements exist that individuals must meet before they will be allowed to use Chapter 7 bankruptcy to eliminate their burdensome debts. It is important that individuals know what they are getting into when they file for any form of personal bankruptcy, and for this reason it can be helpful for them to communicate with legal professionals who include bankruptcy law in their practices.