Bankruptcy Attorneys Fighting Your Financial Battles in Crossville
Staying on top of your finances can be difficult, and there may come a time when everything becomes overwhelming and debt seems to take control. In these circumstances, you may find that making the decision to file for bankruptcy is the best option for you, your family, and your finances, and this is a tricky process to navigate.
Making the decision to file for bankruptcy should not be taken lightly, and it is important that you are able to make an educated, informed, and confident decision. Here at Davis Law Firm, we have helped numerous individuals through the process of bankruptcy, from the initial discussion and analysis of assets through to the final process.
What Is Bankruptcy?
According to the state of Tennessee, the process of bankruptcy consists of a set of federal laws designed to help businesses and individuals who find themselves with more debt than they are able to pay. The issues and details surrounding bankruptcy are covered by Title 11 of the United States Code, also known as the Bankruptcy Code, and most cases will be filed under one of three chapters: Chapter 7, Chapter 11, and Chapter 13. Bankruptcy cases cannot be heard in state courts; federal courts have exclusive jurisdiction over these cases.
What Are The Purposes of Bankruptcy?
Bankruptcy generally serves two main purposes:
- It allows honest debtors to enjoy a ‘fresh start,’ relieved of the burden of the majority of their debts.
- It allows creditors to be repaid in an orderly manner – some bankruptcy cases will be filed to allow debtors to reorganize their finances, and establish a plan to pay any creditors. Others will liquidate all of the property of the debtor.
What Do I Need To File For Bankruptcy?
The first step in the process is to ensure that you have an accurate overview of your finances, including all outstanding debt. To help, you will need to obtain a copy of your credit report from one of the three major providers; Experian, Transunion, or Equifax. Remember that your credit report may not include all debts, such as outstanding medical bills or tax debts. Make sure that you complete a list of all outstanding figures, including those missing from the report.
You will also need the following documents:
- Tax returns going back 2 years
- Pay stubs or proof of income for the last 6 months
- Recent bank account statements
- Recent retirement account or brokerage account statements
- Valuations or appraisals of any real estate you own
- Copies of vehicle registration
- Any other documents relating to any assets, debts, or income
What Is The Process?
Once you have gathered the documentation, you will need to attend a mandatory credit counseling course, approved by the Department of Justice, to help you ascertain whether bankruptcy is the best course of action for your situation. This will result in a certificate that must be included when you file the bankruptcy papers. Once the petition has been filed, the clerk of court will inform any creditors, and in most cases, the debtor will be discharged from their debts and absolved of any liability to pay.
In some cases, there may be disputes over property ownership, the value of assets, outstanding balances, or fees owed; in this case, you will need a licensed attorney to take over the litigation.
What Are The Types of Bankruptcy?
There are three main types of bankruptcy in Tennessee:
- Chapter 7
This is a solution to wipe out personal debt, and it involves all assets being sold, with the profits divided between any creditors. Any assets which are exempt will still be sold, and any money will be returned to the debtor.
Chapter 7 bankruptcy offers a totally fresh start on most debts and is useful for high levels of credit card debt. It means that you cannot be pursued or harassed by creditors over outstanding balances, and this is usually a fast option, taking between 3 and 6 months. In addition, any wages earned after you have filed cannot be taken. It is important to note that this cannot be used for certain debts including student loans, child support, or other taxes.
- Chapter 13
Chapter 13 allows you to protect any assets or properties, but it is harder to qualify for; you cannot be earning more than the median income for the state of Tennessee. This option allows part of your income to enter a repayment plan, with other debts completely wiped out- perfect for catching up on missed payments or back taxes. Chapter 13 allows you to keep your property and protects you against creditors, but it cannot be used for businesses. It can also take up to three years to complete and get a system in place.
- Chapter 11
These are a rarer choice but can be lucrative and popular with corporations. Businesses can still continue to operate throughout the process, and they can be very useful for allowing debtors to continue any daily business activities and reorganize their finances. On the downside, they tend to take longer and have a lower success rate. They also allow the bankruptcy court to take over all major decisions, including the sale of assets, expanding your business, or entering new leases.
What Are My Next Steps?
Bankruptcy can be a complex process, with lots of paperwork, steps, and obligations for the individual to consider. Arming yourself with a qualified, experienced attorney can help you cut through the confusion and uncertainty and ensure that you make the best decision for your individual circumstances. Here at Davis Law Firm, our bankruptcy attorneys have helped numerous businesses and individuals to navigate the treacherous waters of bankruptcy in the Crossville area.
Get in touch with our firm today at (865) 354-3333 to see how we might be able to help you take your first steps to financial freedom.