If you’ve decided to file for bankruptcy, understanding the steps you must take is critical. While most understand that declaring bankruptcy can help alleviate financial stress, they aren’t entirely sure what the process entails. As such, it’s in your best interest to familiarize yourself with what Chapter 7 bankruptcy encompasses to best prepare for this process. Additionally, you’ll want to learn why it’s imperative to connect with a Memphis, TN Chapter 7 bankruptcy lawyer to discuss your unique circumstances.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a way to erase debts. Generally, this process is short, as it calls for the liquidation of assets. As such, you may have to relinquish some assets to help manage your debt, like your vehicle or secondary property, but this is not always the case.
It’s important to understand that despite being one of the most common forms of bankruptcy, not everyone qualifies. To qualify for this Chapter, you must pass a means test. Essentially, this requires filers to prove their household income is less than the median for the state the filer resides in, which in this case, is Tennessee.
What Happens During This Process?
If you wish to file for bankruptcy, you must first complete credit counseling within 180 days of filing. Essentially, this is a mandated course in which you will learn more about bankruptcy and alternative methods to receive debt relief.
When you file for Chapter 7 bankruptcy, you may find that to check your eligibility to file for this option, you must compile your expenses for the past six months. This includes rent payments, grocery bills, medical expenses, and gas purchases. These are allowable expenses, and the income you have left after making these payments will go toward your bankruptcy filing. As such, it’s essential to be thorough and list all possible expenses to best protect yourself.
Next, the bankruptcy trustee assigned to your case will begin determining which assets are exempt, which includes selling property to pay creditors. Similarly, if you have secured debt, your property may be returned as collateral.
Before your case can end, you must take another credit counseling course. Upon completion, your case will be discharged, and the remainder of your eligible debts will be forgiven.
Do I Need a Lawyer to File in Memphis?
If you have decided that filing for bankruptcy is right for you, it’s imperative to connect with an experienced attorney to explore your legal options. Unfortunately, this can be an incredibly overwhelming and complex process. Failure to meet deadlines or include all assets can lead to issues during this process.
As such, the team at the Arnold Law Firm is ready to assist you. We understand that filing for bankruptcy can be a difficult decision, which is why we will do everything in our power to help you feel confident in your decision. Connect with our team today to learn how we can assist you through these challenging times.
