Our Team Can Help You Decide If Bankruptcy Is the Best Option
The decision to file bankruptcy is a difficult one. It can be hard to know when the right time to file is. One of the reasons people postpone bankruptcy is that they often have many misconceptions about how it works and what their lives will look like after they file.
If you are wondering whether you should file for bankruptcy, the team at Mathis, Bates & Klinghard PLLC in Clarksville, TN, is here to answer your questions about bankruptcy. We are a client-centered firm, focused on providing practical, personalized solutions to legal problems. Located in Clarksville, we represent clients throughout Tennessee and Kentucky.
Common Questions People Ask When Deciding Whether To File
Anybody can fall into a rut. We have seen it again and again. Clients come to us at one of the lowest points in their lives. We believe that clients choose us because of what we offer. We provide more than legal services. We help clients see the light again. We offer them hope. We start at our first consultation. The following are some of the most common questions people have when deciding whether to file bankruptcy.
Who files for bankruptcy?
Whatever your circumstances, you should know that you are not alone. People who file bankruptcy are generally hardworking people who have fallen on financial hard times through no fault of their own. Common life challenges include getting laid off from work, getting cancer or some other serious medical condition, getting a divorce or suffering from some other unexpected financial crisis.
Will I lose everything if I file bankruptcy?
People often assume that filing bankruptcy means they will lose their home and valuables. This is not necessarily true. Bankruptcy allows people to keep certain personal property under a system of exemptions. Kentucky and Tennessee each have their own state exemption laws covering what may be exempt from bankruptcy. In addition, both states allow individuals to use certain federal exemptions to protect special assets such as retirement accounts.
If you are worried about protecting your personal possessions you should talk with a bankruptcy attorney about your options. An attorney can assist you with pre-bankruptcy planning to ensure you maximize your assets and get the most benefit out of bankruptcy.
Will I ever be able to get credit again?
People often think their credit will be ruined forever if they file bankruptcy and they will never be able to get credit again. This is not true. You can start rebuilding your credit immediately after filing bankruptcy. For many people, getting rid of debt gives them the fresh start they need. Reducing your debt load is a critical factor to improving your credit.
Won't I have to struggle for years after filing for bankruptcy?
This is a common worry. In reality, the opposite is true. Bankruptcy is designed to get people out of financial hardship by eliminating debt and providing people with a clean financial slate.
Is bankruptcy always the right answer?
No. Honestly, bankruptcy is not always the right fit for everyone. If bankruptcy is not the right fit for you, we can assist you with other options, including negotiating a debt settlement plan, debt consolidation or loan modification. Restructuring debt or negotiating a reduced fee can work wonders to get you on the right track again.
Know Your Bankruptcy Options
Our role is as a guide. We help you understand your options, you make the decision. When you meet with an attorney at our firm, we will empower you by helping you understand the bankruptcy process and advising you on what you can expect from each option. We put you in the driver's seat by educating you about:
- Personal bankruptcy — In personal bankruptcy, people have the option of filing as individuals or married couples. Once the decision to file has been made, the next challenge is often deciding whether to pursue Chapter 7 or Chapter 13 bankruptcy. We will explain the differences between Chapter 7 and Chapter 13 bankruptcy and advise you on which bankruptcy might be best for your unique situation.
- Business bankruptcy — Individuals are not the only clients we serve. We also represent businesses and business owners who are struggling financially. Regardless of whether you are planning to close down the business or looking for detailed guidance on managing a business reorganization, we will help you manage every detail of your business bankruptcy.
Is Chapter 7 Or Chapter 13 The Right Option?
Which bankruptcy is right for you? If you are an individual or married couple filing bankruptcy, you will most likely be choosing between filing Chapter 7 and Chapter 13 bankruptcy. Both bankruptcies have their advantages. The right bankruptcy for you will depend in part on your income and in part on your individual financial situation. A skilled bankruptcy attorney can advise you on the best bankruptcy for you.
At Mathis, Bates & Klinghard PLLC, we pride ourselves on being accessible to our clients. We guide our clients through the bankruptcy process, letting them know what to expect and helping them avoid costly mistakes that many people make when trying to file without an attorney. Based in Clarksville, we represent clients throughout Tennessee and western Kentucky.
The best way to choose what chapter will work best for you is to compare Chapter 7 vs. Chapter 13 bankruptcy.
Understanding How Chapter 7 Bankruptcy Works
The vast majority of people want to pursue bankruptcy because they are eager to complete bankruptcy quickly. Sometimes referred to as liquidation, this form of bankruptcy wipes away liability for unsecured debts such as medical debt, credit card debt and most unsecured loans.
Generally it takes approximately 90 days from the date of filing to receive a discharge. While this form of bankruptcy wipes away most debts, certain debts, such as home mortgages and auto loans, may be kept through the bankruptcy.
To be eligible for Chapter 7 bankruptcy, you must be able to pass the Means Test. The Means Test is a measurement of income for an average household of your size in your county. Your household income cannot exceed this number to qualify for Chapter 7 bankruptcy.
Understanding How Chapter 13 Bankruptcy Works
Chapter 13 bankruptcy is sometimes referred to as reorganization. It involves setting up a payment plan with the bankruptcy court to pay back either a portion of your debt or all your debt over a period of years. At the end of that time, whatever unsecured debt remains is discharged, just like a Chapter 7 bankruptcy.
Unlike Chapter 7, passing the Means Test is not necessary to qualify for Chapter 13 bankruptcy, but it will determine how long a plan will last. Generally, individuals who pass the Means Test may complete the plan in 36 months; individuals whose income exceeds the Means Test are required to participate in a 60-month plan.
Chapter 13 bankruptcy offers the following benefits that are unavailable in a Chapter 7 bankruptcy:
- Catch up on debt — Individuals who have fallen behind on house or car payments may file a Chapter 13 bankruptcy to get caught up on arrears while avoiding foreclosure or repossession.
- Pay off nondischargeable debt — Certain debts are nondischargeable in a bankruptcy. Business tax debt and some individual income tax debt may be nondischargeable in bankruptcy. Chapter 13 plans enable individuals to pay off this debt without fear of garnishment.
- Reorganize debt — People can reorganize their debt to get on firm ground again. Certain secured debts may be paid back at a lower interest rate, enabling individuals to make ends meet.
Talk to a lawyer to understand what a Chapter 13 plan might look like for you. Your plan payment will depend on a number of factors including your income, what debts must be paid off within the plan and your overall debt.
Advantages Of Chapter 7 And Chapter 13 Bankruptcy: The Automatic Stay
Whether you pursue a Chapter 7 or Chapter 13 bankruptcy, you will enjoy the benefit of court protection from creditors. The Automatic Stay is a legal injunction that goes into effect the moment your case is filed. Creditors are prohibited from attempting to collect a debt while the Automatic Stay is in effect. This includes garnishment, repossession or foreclosure.
Is It The Right Time To File For Bankruptcy?
If you are considering bankruptcy, you are not alone. Bankruptcy exists to give people a fresh start. Regardless of what circumstances led to your present financial situation, you should not have to spend the rest of your life paying off debt.
At Mathis, Bates & Klinghard PLLC, our lawyers have helped many people in Tennessee and Kentucky break free of harassing creditors and open the door to a new beginning through bankruptcy. We represent clients from all walks of life in all manner of circumstances get the relief they need to start building a new life.
Why A Bankruptcy Attorney Is Worth The Investment
Bankruptcy is one area of the law where it is vitally important to have an attorney. Bankruptcy laws are complex and there is a long list of things that one should and should not do before filing bankruptcy. Individuals who try to save money filing by themselves often end up paying money to the bankruptcy court because they did not understand how an action would affect them.
At Mathis, Bates & Klinghard PLLC, we know you are struggling financially. We believe everyone should have access to quality legal services. We strive to deliver value by offering outstanding bankruptcy services at a reasonable price. To schedule an initial consultation to discuss your options, call our law office in Clarksville at (931) 919-5060 or schedule your consultation online.
Our attorneys are licensed in the Middle District of Tennessee and Western District of Kentucky.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.