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Chapter 7 Bankruptcy is not an end, but it is a new beginning

Life after bankruptcy in Tennessee and other states can be better than it was before the bankruptcy. Contrary to urban legends and exaggerated rumors, one is not prevented from having financial accounts going forward. The main feature of the aftermath of a Chapter 7 bankruptcy is instead the peace of mind that comes from erasing overwhelming unsecured debt, such as all credit cards, unsecured personal loans and medical bills. 

The effect on one's credit is not as drastic as may be portrayed in the financial world. There is indeed a negative impact, but it is often muted due to the fact that most people who file already have seriously declining credit scores and records. Those low credit scores and shaky records are not greatly reduced by a bankruptcy; in fact, a certain positive effect is noted by the fact that one's prior dismal inability to take on new credit is transformed for the better by the filing.

Many people also worry that they will lose assets when they file Chapter 7. In most cases, however, federal and state laws provide exemptions for basic belongings and necessities. In addition, any qualified retirement funds that have been built up are exempt and protected from creditors. Other income flows, such as employment income, workers' compensation and Social Security disability, are exempt and protected from attachment.  

People can also usually keep their home in a Chapter 7 bankruptcy, depending on whether it has a mortgage and the status of the mortgage payments. The same applies to their vehicles. In order to find out if one qualifies to file, and for learning the impact of a bankruptcy filing on one's assets, it is best to take advantage of a consultation with an experienced consumer bankruptcy attorney. These highly informative meetings are often offered for free in Tennessee and elsewhere.

Source: mint.com, "Bankruptcy: When to File and How to Recover", Zina Kumok, Dec. 28, 2017

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