Which Bankruptcy Is Right for You?
At The Law Office of W. Thomas Bible, Jr., we understand that an unexpected turn of events—loss of a job, a major illness, a flood, or a fire—can push a financially stable family or business to the brink of bankruptcy almost overnight. That is why bankruptcy laws are designed to free a debtor from his or her obligations within seven years, wiping the slate clean.
Personal bankruptcy in Chattanooga
Two chapters of the federal bankruptcy code apply to individuals seeking protection from creditor harassment and collection attempts: Chapter 7 and Chapter 13.
If you qualify for a Chapter 7 bankruptcy in Chattanooga, the law permits you to discharge—or clear—most of your debts. You can discharge medical debt, credit card debt, and most personal loans through Chapter 7 bankruptcy.
For debtors whose net monthly incomes are too high to qualify for Chapter 7 bankruptcy, Chapter 13 bankruptcy puts you on a structured repayment plan for most of your creditors, discharging the remaining debt after a four- or five-year period.
Although the goal of bankruptcy laws in Chattanooga is to give debtors a fresh start, bankruptcy does not erase all debts. Categories of debt that cannot be discharged through bankruptcy include the following:
- Most taxes and other government obligations, including fines, court fees, and criminal restitution
- Debt incurred through your own willful and malicious behavior, like settlements for personal injury, especially if you were intoxicated at the time
- Domestic support obligations, like alimony and child support
- Student loans
Chattanooga business bankruptcy
Just as federal bankruptcy law offers two types of bankruptcy for individual debtors in different situations, it has created two types of bankruptcy for companies and businesses: Chapter 7 and Chapter 11.
Under Chapter 7 bankruptcy, businesses liquidate all of their assets to pay off as many of their creditors as possible. For all intents and purposes, a business that has completed the Chapter 7 bankruptcy process ceases to exist.
For businesses, Chapter 11 bankruptcy in Chattanooga parallels Chapter 13 bankruptcy for individuals. In a Chapter 11 bankruptcy, the business may be insolvent and in debt, but it has not become unviable. Under Chapter 11, a business gains bankruptcy protections—relief from creditors and an automatic stay on collection actions—in exchange for complete financial transparency and a commitment to act as a fiduciary toward its creditors while the bankruptcy continues. Often called Chapter 11 reorganization, this process requires extensive involvement on the part of the business ownership and management and a lot of creative planning to get the business back into the black and out of bankruptcy protection.
The Law Office of W. Thomas Bible, Jr. has guided innumerable Tennessee individuals and businesses through the entire bankruptcy process. A dedicated bankruptcy attorney in Chattanooga will help you decide whether bankruptcy is right for you or your business, and if so, which chapter best suits your needs.
Contact the firm today for a free consultation
We proudly remain a local firm. Our doors are open to all clients, and we pledge to offer the kind of personal attention, experienced counsel, and affordable rates that our customers deserve. To schedule a free consultation to discuss your bankruptcy filing in Chatanooga or Chatanooga Social Security disability legal matter, contact The Law Office of W. Thomas Bible today.
