Making the decision to file for Chapter 7 bankruptcy can be difficult. Declaring bankruptcy impacts the filer's credit and can be hard on his or her self-image as well, but it's sometimes the best way to get unmanageable debt under control. For people who are struggling to pay down their debts in Tennessee, Chapter 7 bankruptcy can improve day-to-day quality of life as collection actions must stop once the petition is filed.
In regard to credit, a Chapter 7 filing may stay on the filer's credit report for as many as 10 years. However, the time to complete the bankruptcy is usually between three and six months. It might be possible for many filers to establish new lines of credit within one to three years following a Chapter 7, but these typically have relatively high interest rates. There are a number of lenders who specialize in lending to people who have filed for bankruptcy, but it's difficult to get a new mortgage loan following a bankruptcy.
Some types of debt are generally not dischargeable in bankruptcy. This includes alimony, child support and student loan debt. Only an order from the family court can suspend obligations for child support or alimony. Filing for bankruptcy may prevent student loan creditors from pursuing aggressive collections. In cases where the debtor has sufficient regular disposable income, a Chapter 13 filing may be better for the debtor.
People in Tennessee who have questions about filing for bankruptcy might want to speak with a lawyer. Legal counsel with experience handling bankruptcy cases could assist by examining the client's financial situation and suggesting the appropriate bankruptcy filing or other means to reduce or eliminate debts. A lawyer might draft and file the petition to begin the action or help the client complete required pre-bankruptcy counseling.