Chattanooga Bankruptcy Lawyers
The state of the economy cannot always be predicted and, oftentimes, people find themselves in an ongoing struggle with substantial financial burdens. Bankruptcy laws are in place as a way out of such financial hardships by allowing individuals, as well as businesses, the option to liquidate their assets to settle debts or set up a repayment or reorganization plan. As the Supreme Court stated in their 1934 decision of Local Loan Co. v. Hunt, “[Bankruptcy] gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”
The bankruptcy process is established by the Federal Rules of Bankruptcy Procedure, also called “Bankruptcy Rules,” as well as the local rules for each Tennessee district’s bankruptcy court. Being familiar with the local rules of your district in Tennessee is essential to successfully filing for bankruptcy in Tennessee. Consulting with an experienced Tennessee bankruptcy attorney at Massey & Associates, P.C. would ensure that you fulfill all filing requirements, as well as file for the right type of bankruptcy.
Filing for Bankruptcy in Tennessee
There is a federal bankruptcy court for each judicial district in the U.S. Tennessee has 3 bankruptcy courts for each of its judicial districts: Eastern, Western, and Middle. To begin the bankruptcy process, you would first need to know which court to use.
The bankruptcy process can seem very complicated, especially because much of the bankruptcy process is administrative, involving various legal forms and behind the scenes decision making. A U.S. bankruptcy judge makes most of the decisions regarding any bankruptcy matters, including whether a debtor is eligible to file or whether he or she should receive a discharge of debts. In some cases, a trustee carries out this administrative process. A debtor usually has one formal meeting for which he or she must be present, and that is the meeting of creditors, where creditors will ask the debtor questions about their debts and property.
Types of Bankruptcy
Every individual’s debt situation is different and they may file for one of 6 different types of bankruptcy, as provided under the Bankruptcy Code, that apply to individuals or commercial enterprises. Each type of bankruptcy is referred to as a “chapter,” and, though there are 6, the most commonly filed are Chapter 7 and Chapter 13 bankruptcy.
- Chapter 7 is entitled “Liquidation.” This form of bankruptcy involves an organized, court-supervised liquidation of assets by a trustee, who reduces the assets to cash and distributes appropriate amounts to creditors, though this process is subject to the debtor’s right to hold on to exempt property, and the rights of secured creditors. Because there is often minimal to no nonexempt property in Chapter 7 cases, a debtor’s assets may not actually be liquidated.
- Chapter 13 is entitled “Adjustment of Debts of an Individual With Regular Income.” This form of bankruptcy is often preferred over Chapter 7 because it allows a debtor to keep their assets while using their regular income to establish an installment payment plan to repay creditors over a period of time, typically 3 to 5 years.
Debt Resolution Fitting Your Unique Financial Needs
To successfully achieve a clean financial slate, a debtor must know which type of bankruptcy to file for, when to file, where to file, and what complications may arise, if any. At Massey & Associates, P.C., our knowledgeable Chattanooga bankruptcy lawyers understand how burdensome financial troubles can be and know how hard a decision it is to file for bankruptcy. We will thoroughly evaluate your financial situation and help you determine whether filing for bankruptcy is the best option to protect your financial future. Call us today to learn more about your legal options.
