How Bankruptcy Can Benefit Tennessee Residents Struggling with Bills
Accomplished Knoxville lawyer helps clients pursue debt discharge
To people unfamiliar with the process or purpose of bankruptcy, the idea of filing for this type of relief might seem extreme or undesirable. Though other debt resolutions exist, bankruptcy can be highly beneficial in certain circumstances. At the Knoxville office of William E. Maddox, Jr. LLC, Attorney at Law, I have helped many Tennessee residents use bankruptcy as a tool to promote long-term financial stability while obtaining short-term relief from overwhelming debt. When you are ready to face your debt problems, I can help you determine if bankruptcy is an advisable solution.
Experienced legal adviser develops debt resolution plans for homeowners
For someone facing a towering stack of bills or constant onslaught of creditor collection calls, it can feel nearly impossible to envision a future where money is not a massive source of stress. In many ways, filing for bankruptcy creates a much-needed period of calm in the storm, giving a person the time to reassess their current situation, develop a plan to move forward and take specific actions targeted toward relieving their financial burden.
Different advantages and drawbacks are associated with each type of bankruptcy. For a person who earns regular income and has a home mortgage or other substantial assets, Chapter 13 is often the most appropriate form of bankruptcy. Potential benefits of Chapter 13 include:
- Protecting your home from foreclosure
- Protecting your car from repossession
- Keeping personal property instead of selling it off
- Stopping collection efforts temporarily when the automatic stay is entered
- Receiving extended time period to repay obligations
- Creating a structured budgeting plan to manage income and pay debts
- Possibly receiving a discharge of certain unsecured debts when the repayment schedule ends
- Starting on a path to rebuilding your credit
It is also important to recognize potential downsides of bankruptcy. Filing a Chapter 13 petition can harm your credit rating in the short term. Your credit cards will likely be canceled, and you will have to devote most of your disposable income to your obligations under the repayment plan.
A person who is committed to ending their debt problems once and for all can establish sustainable money management practices and finish their three-to-five-year repayment plan in a much better position than where they started. With more than 25 years of experience practicing the law, I can help you weigh the debt relief options available to you.
Focused attorney supports clients who seek a clean slate through Chapter 7
Chapter 7 bankruptcy is more appropriate for a person who is overburdened with debt and does not own substantial property or other forms of wealth. Also called liquidation bankruptcy, Chapter 7 involves the selling of a person’s non-exempt property, if any, so that proceeds can be used to pay back creditors. Benefits of Chapter 7 include:
- Eliminating dischargeable debts within months of filing for bankruptcy
- Protecting certain property from liquidation through the strategic use of exemptions
- Preventing creditors from engaging in collection efforts
- Obtaining a fresh start by erasing burdensome obligations
To qualify for Chapter 7 bankruptcy, you must be able demonstrate your financial need and lack of resources. This is sometimes referred to as the “means test.” Like Chapter 13, a Chapter 7 filing will likely result in your credit cards being cancelled and damage to your credit score.
In many cases, the benefits of Chapter 7 outweigh the sacrifices required to successfully complete the bankruptcy process. When you have questions about bankruptcy, I am available to provide personalized advice.
Contact a caring Knoxville bankruptcy lawyer for a free consultation on debt relief options
At William E. Maddox, Jr. LLC, Attorney at Law in Knoxville, I advise Tennessee clients on the potential benefits and downsides of filing for bankruptcy and assist with all aspects of bankruptcy cases. To schedule your free consultation, call or contact me online.