West Knoxville Bankruptcy
Bankruptcy is no longer a dirty word. Historically, people have considered bankruptcy as ominous or a sign of weakness. The truth is that bankruptcy can be a path back to financial stability; the journey may not be easy, but it can provide much-needed relief.
Bankruptcy is a process that alleviates your debt and you have no legal obligation to pay. It provides a light at the end of the tunnel, especially if your current situation feels insurmountable. Bankruptcy can be a solution if you have two or more of the following problems:
- You can only make minimum payments on credit card statements
- Debt collectors continuously harass you
- You are reluctant to address or sort out your finances
- You use credit cards to pay for everything
- You have considered debt consolidation
- You do not know how much money you owe
Call Us at 865-213-3617
Types of Bankruptcy
Bankruptcy comes in several different varieties. Each version has individual purposes, which will be useful based on the merits of your case. The Pope Firm specializes in the following forms of bankruptcy:
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is often the last resort. This process is worth considering if you have already tried working with creditors or a credit counselor, and still have severe debt. Chapter 7 bankruptcy lets you put a temporary halt on your debt, though it can mean losing some possessions and having lenders put liens on your property.
Generally speaking, the entire process takes about three months from start to finish. Also known as “straight bankruptcy,” it involves meeting with a bankruptcy counselor and seeking a means test. The means test indicates whether your income, assets, and net worth qualify you for Chapter 7 bankruptcy. Standards vary from state to state.
After filing a petition to the courts, you will attend a creditor meeting where you will answer questions about your finances and debt. Next, you have to liquidate some of your assets to pay off as much of the debt as possible. The proceeds will go directly to your creditors and lenders. You will also have to take and pass a financial management course.
Remember, Chapter 7 bankruptcy is not for everyone. It may be ideal if you have unpayable medical bills or are unemployed. However, if you own a business or home that you want to keep, those assets will likely end up in the hands of creditors.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is one of the lesser-known forms of bankruptcy. Typically, the only entities that use it are corporations or limited liability companies. Recent examples of Chapter 11 bankruptcy include General Motors, Enron, United Airlines, and Lehman Brothers.
Chapter 11 bankruptcy is also one of the most complex forms because it involves restructuring the business to meet its debt obligations. In many cases, this process allows the company to continue operating as it downsizes or liquidates assets to pay creditors. While Chapter 11 bankruptcy is designed for large organizations, there are cases where individuals with a lot of debt, and who cannot qualify for Chapter 7 or 13, can use it.
Chapter 13 Bankruptcy
This option is for people who want to hold onto their property during the bankruptcy process. It is reserved for individuals who earn an income, which is why people sometimes call it the “wage earner’s plan.” The process itself typically takes six months to complete with repayment plans taking three to five years.
Chapter 13 bankruptcy can consolidate any debts related to student loans, child support, mortgages, or unsecured debts. While each type of debt comes with a distinct repayment period, the methodology is still the same. Instead of juggling bills from multiple different sources each month, you can make a single payment to lenders and creditors that they distribute appropriately.
While your credit will take a hit in the short run, Chapter 13 bankruptcy is ideal for your long-term financial health. Future creditors can see that you paid back a majority of your obligations. Additionally, Chapter 13 only remains on your credit reports for seven years as opposed to ten years for Chapter 7.
It is challenging to admit that you need to file bankruptcy. If you get to that point, make sure you don’t do it alone. The Pope Firm in West Knoxville will be here to walk you through your options and ensure you get the bright financial future you deserve. Sit down with one of our bankruptcy attorneys by calling (865) 324-0456 today.
West Knoxville Location to Serve You
Free Case Consultation
Fill out the form for a no obligation consultation