Are You Considering Filing Bankruptcy? Here are Answers to Some of the Most Common Questions We Get.

With the economy being depressed for such an extended period of time record numbers of people have found themselves considering filing for bankruptcy protection. Many of the people we meet with though don’t always understand what bankruptcy entails. These are a few of the questions we regularly answer.

If you would like more information please call our office at 615-893-1239 to schedule a Free Consultation. During our appointment we can answer all of your questions about the bankruptcy process and how it would affect you.

Why do people file bankruptcy?
Bad things happen to good people and tough times affect everyone. Many people, who would not have dreamed about bankruptcy last year, are now considering the options, and even speaking to an attorney. Our office offers a free consultation and this is a great idea. The internet provides a wealth of information but the ability to speak with an attorney about your individual, unique situation is invaluable.

What are the factors that bring many people to this point?

1. Job loss or other financial setback
2. Medical expenses
3. divorce or legal separation
4. small business failures
5. foreclosure

Something else to consider is what type of bankruptcy could or should be filed.  There are two primary types of consumer chapters, chapter 7 and chapter 13.  Knowing what kind of petition to file can save much time and effort down the road.

What is reaffirmation of debts in bankruptcy?
Secured creditors may retain some rights to seize property securing an underlying debt even after a discharge is granted. Depending on individual circumstances, if a debtor wishes to keep certain secured property (such as an automobile), he or she may decide to 'reaffirm' the debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor continues to pay the debt.

In a Chapter 7, this is frequently the best way for the debtor to retain his or her property.

What is a bankruptcy discharge?
"A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien."

If any of these factors or others have you thinking about whether filing bankruptcy is for you call our Murfreesboro, TN Law Office at 615-893-1239 to schedule a Free Consultation. We’ve helped many other residents of Middle Tennessee and we can help you.