Going through bankruptcy can be stressful on a Tennessee family. After finding themselves in a dire financial situation, the members of the family may have to make the difficult decision to file for Chapter 7 or Chapter 13 bankruptcy. Starting the bankruptcy process can mean cutting back on spending, rearranging financial priorities, and even selling off items of owned property.
Not long ago this bankruptcy and debt relief legal blog published a post regarding bankruptcy exemptions for Tennessee residents. In the post, readers were informed that in our state individuals must use the state's exemptions, rather than the exemptions that the federal government offers to individuals in other jurisdictions. This post will focus on one small part of the state's list of exemptions available to bankruptcy debtors: personal property.
Every day American across the country make the difficult decision to pursue bankruptcy to alleviate their financial obstacles. Whether they have fallen on hard times due to medical or credit card debt or have suffered the loss of their income due to a lay-off or downsizing, their choices to seek protections from the bankruptcy laws of the state and nation are undoubtedly made after careful considerations.
Working through a bankruptcy from filing to discharge may seem daunting for a Tennessee resident. For example, under Chapter 13 bankruptcy, a debtor may have to find a way to commit much of their disposable income to the repayment of their debts. Under Chapter 7 bankruptcy, they may have to relinquish items of their own property to sell for the repayment of what they owe to their creditors.
Bankruptcy exemptions are intended to allow debtors to keep some of their property when they elect to file for bankruptcy. Exemptions can be particularly important to debtors who choose to pursue Chapter 7 bankruptcy, which is often referred to as "liquidation bankruptcy". In Chapter 7 bankruptcy, a person is required to sell off items of property in order to attain money to pay off their creditors.
Chapter 7 bankruptcy can seem like an extreme financial process for those Tennessee residents who are struggling to find solid financial footing. Often referred to as "liquidation bankruptcy," this form of bankruptcy requires filers to sell off items of personal property in order to come up with money that can be used to satisfy the filer's creditors. Unlike Chapter 13 bankruptcy, which involves the repayment of debts over time with the filer's incomes, Chapter 7 bankruptcy relies on the proceeds of the filer's liquidations to settle their outstanding debts.
Many Tennessee residents have worked their entire lives to pay down their homes, build up their retirement funds, and prepare themselves to ride out their lives without the hassle and worry of everyday employment. For most, a well-executed plan can get them comfortably into retirement. For others, unexpected life events can put their careful preparations into financial jeopardy.
One of the biggest fears that a Tennessee resident may face when considering bankruptcy is the prospect of losing their home. Depending upon the form of bankruptcy the person chooses to pursue, they may have to sell off or liquidate some of their possessions in order to pay their creditors. Homeowners know that that their residences are more than piles of wood and plaster: homes are where families grow, memories are made and lives are lived.
Although Chapter 13 bankruptcy allows a Tennessee debtor to keep their personal property and repay their creditors through a reorganization of their assets and income, Chapter 7 bankruptcy, to some extent, does not. In a Chapter 7 bankruptcy, a debtor is required to sell off or liquidate items of property so that the proceeds may be used to pay off those parties to whom the debtor owes money. With the requirement that property must be sold under Chapter 7 bankruptcy, some debtors may have concerns over what, if any, of their property will get to keep after the process is over.
When debt gets out of control, it can be hard to know what to do next. Feeling like your back is up against the wall financially isn't a desirable place to be. Figuring out next moves can feel limiting, as debt can impact other facets of your life. There is a way to get out from under the crippling debt and get your life back.Chapter 13 bankruptcy could be a great option for someone who is overwhelmed by debt. In Chapter 13 bankruptcy, a reorganization of a debtor's assets and the creation of a repayment plan to pay back creditors for debts is created to make debt more manageable. It's different from Chapter 7, but bankruptcy exemptions can still be enacted to protect specific assets from the reorganization process. Bankruptcy exemptions can include a variety of assets.