Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

The process of bankruptcy and why people file

With student loan debt on the rise and families struggling with the high cost of medical care, more households may be carrying an unmanageable debt load. Some of them may want to consider filing for bankruptcy.

Most individuals will file for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is generally for people who are unable to pay back their debts. With a Chapter 13 bankruptcy, debt can be restructured, and the person pays back creditors over a period of three to five years.

When deciding whether to file for bankruptcy, people should take a number of factors into account. Among these are whether the person is genuinely unable to repay the debt, whether the person will be able to put together the documents needed and whether the effect on the person's credit score is worse than the effect of the debts.

A person who does decide to file for bankruptcy may want to work with an attorney. An attorney is not required, but bankruptcy can be a complex and confusing process. The attorney may help the person in filling out the necessary forms that are then filed with the court. A trustee will then review the paperwork. In a Chapter 13 bankruptcy, the trustee must also approve the payment plan.

Child support payments are not dischargeable in bankruptcy. Tax debts also cannot be discharged in a bankruptcy, and it is usually not possible to discharge student loans. However, filing for bankruptcy could free up money that can be used toward those debts.

Chapter 13 bankruptcy may also help a person keep certain assets, such as a home. All creditor actions, including home foreclosure, must stop when a person files for bankruptcy. Even with a Chapter 7 bankruptcy, people are generally allowed to keep some assets. Once the bankruptcy is finalized, people can start to rebuild their credit.

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Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
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312 East Broad Street, Suite A
Cookeville, TN 38501

Phone: 931-400-2218
Fax: 931-526-6244
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