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Filing for bankruptcy is not an option that individuals should take lightly. When all other options seem to be exhausted and the bills continue to pile up, contacting bankruptcy lawyers in Memphis, TN, can help you understand the risks and benefits of filing for bankruptcy. There are two main types of bankruptcy that individuals can file for, and choosing which is right for your situation is best decided through a knowledgeable lawyer. The first type of bankruptcy is filing under chapter 7. In this situation, except for certain possessions that are considered exempt, everything you own will be liquidated, or sold, and the proceeds will go towards paying off your debt. This does typically involve starting over from scratch financially and you should not count on your spouse being able to keep everything if you file separately. You will need to disclose to the courts several pieces of information, including your assets and liabilities (what you have that is worth money and what money you owe), any income you make, all your bills, a statement of financial affairs (something your lawyer can help you write), and any contracts or leases that have not expired. It is very important that you disclose all necessary financial information and that you fully cooperate with all that is asked of you. In doing so, the court will be able to best ascertain your financial situation and be able to make the appropriate decisions to allow you out from under the debt. Once these proceedings begin, you will receive relief from creditors calling to receive their money and your lawyer can help you know how to answer then if they do still call. The second type of bankruptcy is also called the wage earner's plan because to qualify you need to be earning a wage. This type of bankruptcy works with your creditors to create a repayment plan of all or a portion of your debt based on how much income you make and how much you owe. One of the main benefits to this plan is that you do not have to lose your home and any foreclosure proceedings already begun against your home are halted. In this type of bankruptcy, you will be put on a repayment plan negotiated with your lenders. The length of repayment varies based on your specific situation but is generally 3 to 5 years. The amount you repay will be negotiated and you will cease sending your payments directly to the individual lenders. This will work similarly to a loan consolidation plan, where you will send a single monthly payment to a third party who then disperses the funds as necessary. There is protection built into this plan for co-signers, but for specific details, speak with your lawyer. You will not be allowed to incur any additional debt while in your repayment plan, and you will be living on a fixed budget to enable you to make your required payments. Once all payments have been completed, you will need to consult with your lawyer to file for discharge from the bankruptcy program. In some situations, you can convert a chapter 13 bankruptcy to a chapter 7 bankruptcy. This might be appropriate if you find yourself suddenly unable to make the negotiated payments required of you. While filing for bankruptcy may seem difficult and complicated, finding knowledgeable bankruptcy lawyers in Memphis, TN, can help you understand the process better. With the right lawyer and your full cooperation, the entire process can be completed smoothly and efficiently, leaving you in the end with your debts taken care of and a fresh financial start.
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