When a small business in Tennessee is teetering on the edge of bankruptcy, creditors often attempt to persuade the business to pay their claims before filing a bankruptcy petition. While such a transaction may appear to benefit both the debtor and creditor, payments to creditors can often create what are known as "voidable preferences" or "preferential transfer." Such payments are often set aside by the debtor or the bankruptcy trustee, and the money paid to the creditor is returned to the bankruptcy estate.
Most bankruptcy proceedings in the Chattanooga area are started by a person or corporation who is struggling with a heavy debt load and an insufficient cash flow. On occasion, a bankruptcy proceeding is started by one or more creditors of the debtor who fear they will not be paid because the debtor will squander its assets instead of paying its debts. Such proceedings are called involuntary bankruptcies, and they operate under a special section of the Bankruptcy Code.
Whether you are buying your first car or upgrading to a new model, it may come as a surprise that these days a new car can cost, on average, over $37,000. With car prices continually increasing, many people in Tennessee are taking out auto loans to pay for their new vehicles. In fact, in total $1.2 trillion is now owed on auto loans in the U.S.
Getting out from under debt can be a long and difficult process. No matter what path a person chooses to achieve debt relief, they may first wish to consult with a bankruptcy attorney to better understand the bankruptcy process. Some Tennessee residents may have misconceptions about how the bankruptcy process works, particularly when it comes to liquidating their assets through Chapter 7 bankruptcy.
Wage garnishment is a legal process. When a Tennessee resident has a job and owes a creditor money, that creditor may be able to secure a wage garnishment against them. If they do, the debtor will see some of their pay removed from their paycheck each pay period and sent to the creditor in consideration of their debt.
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.
Bankruptcy is not an easy process, regardless of the route that an individual chooses to pursue to take control of their financial problems. A Tennessee resident who elects to use Chapter 7 bankruptcy to manage their debts may worry about liquidating their assets and whether they will emerge from the process able to move their life forward. One aspect of bankruptcy that is incredibly helpful to men and women who are struggling under the weight of outstanding financial obligations is the automatic stay. When a person files for bankruptcy the automatic stay stops creditors from taking further action against the person throughout the duration of their bankruptcy proceedings.
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.
It is important that readers of this blog understand that their financial situations are unique. Individuals are advised that this and other articles on this blog are informational only and case-specific help should be sought from a bankruptcy attorney.