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Dealing with debt can be a debilitating and life-altering experience. Every situation is different, and figuring out your options can seem like an overwhelming process. The pressure of creditors, the looming debts, and the financial frustration can add up to a lot of stress, and that’s where bankruptcy can be a great option. A good bankruptcy attorney in Memphis, TN, can help you figure out your options, and bankruptcy can be the thing that brings you back to financial freedom. Why Bankruptcy? Bankruptcy involves a system of laws that help people start over financially. Financial distress affects all parts of your life, from your mental health to the happiness and health of your marriage and family. Finding a way to escape the sea of debt and the sensation of drowning that can seem to overtake your life can be a game-changer, and getting that fresh start can help you get back on your feet. Bankruptcy can wipe that ledger clean, opening doors to a much brighter future. Types of Bankruptcy There are six main types (chapters) of bankruptcy, although two of them are the ones seen most often. Chapter 13 bankruptcy is for people with debts under certain levels. You must prove that you have certain assets or a source of income, you must be current on your income tax filings, and you can’t file in the name of a business. This type of bankruptcy helps you reorganize your debts to regain control of your finances, and can be helpful in avoiding certain negative outcomes (like foreclosing on a home) or for gaining more time to deal with outstanding debts. Chapter 7 bankruptcy essentially liquidates the majority of your assets in exchange for discharging the majority of your debts. This is a good option for people whose debts are over a certain amount (due to situations like medical treatments, credit card debt, or catastrophic events) and who have little or no income with which to deal with those debts. Certain debts and properties are exempt, meaning that they cannot be seized or discharged. These debts can include student loans, taxes, fraudulent debts, or child support payments. Tips for Filing for Bankruptcy While bankruptcy can be a great option for those seeking freedom from debilitating debt, it is not a course of action to be taken lightly. Assess your finances and make sure you consider all of your options. Speak to an attorney and get a professional opinion. Figure out how you got into this situation and what can be done to avoid repeating the process in the future. If you do decide that filing for bankruptcy is the right decision for you, inform all of your creditors. Complete your required credit counseling course as soon as possible. Hire a reputable attorney who will fight for you along the way and provide the assistance you need throughout the filing process. Who Qualifies? To qualify for bankruptcy, you must pass a means test. Your income will be compared to the state median, determining if you fall above or below that line. If you fall below the line, you qualify for Chapter 7 bankruptcy. If you fall above the line, you can continue with the means test and application, and your expenses will be weighed against your income. The values of these factors are not always as straightforward as they might seem, so the help of a qualified bankruptcy attorney in Memphis, TN, is recommended to help you make sure the process is smooth and effective. If your expenses leave you with little or no extra income, you can still qualify for Chapter 7 bankruptcy.
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