Many people in the Chattanooga, Tennessee area struggle to pay their bills. They may lose hope that they'll ever be able to cover their debt. One option they may turn to is bankruptcy. There's no magic formula for deciding when bankruptcy is the right choice. I can help you decide whether bankruptcy is an option for you.
Bankruptcy is an option you might consider if you:
- Are paying only minimum amounts on your bills
- Can't budget yourself out of debt within five years
- Are getting notices that your mortgage or loans are being foreclosed
- Are delinquent on your car loan and risk losing your car to repossession
- Have had a severe financial setback, such as losing your job or a major client, a divorce or a costly illness
- Owe taxes and are getting notices that they may lien your property or levy your bank accounts
- Have unpaid traffic fines that are suspending your driver’s license
Bankruptcy does not get rid of all debts. You're still responsible for:
- Alimony
- Child support
- Most recent back taxes
- Most student loans
- Recent large purchases of more than $600 for luxury goods bought within 90 days of filing
- Fines or penalties of government agencies
- Fraudulent debts
- Cash advances of $875 within 70 days of filing
As a Chattanooga consumer, you can file for bankruptcy in Tennessee under either:
- Chapter 7 (Straight Bankruptcy) to wipe out all debts except those listed and get an immediate fresh start
- Chapter 13 (Wage Earner Bankruptcy) to set up a repayment plan to pay back some or all of your debts over 3 – 5 years
- Chapter 11 usually used to reorganize businesses, but may be useful for some individuals
Bankruptcy Abuse Prevention and Consumer Protection Act
On April 20, 2005, the President signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act,which limits individual access to US bankruptcy courts. Included in those changes is the requirement that your average income be calculated,and a determination be made as to whether you have any disposable income, after living expenses are deducted, to pay something to your unsecured creditors.
What Can I Keep?
When you file bankruptcy, all of your assets, with a couple exceptions, become part of the “Bankruptcy Estate.” However, you are able to claim property as “exempt” from the bankruptcy estate. That exempt property is property that you are allowed to keep. What property is exempt is determined by state and/or Federal law. The items and amounts in this section may change in the future. Updated information can be found in the state code and Federal code. In Tennessee, you may choose either the state or Federal exemptions, whichever may be more beneficial to you. I will help you determine which exemptions you should claim should you decide to file.
