You probably have several options in Tennessee for debt relief, but few have the potential to be as generous as Chapter 13 bankruptcy. Part of the advantage is the relatively long timeframe in which you would be able to address your financial liabilities.
Chapter 13 is different from chapter 7, the other common form of personal bankruptcy, in that the former allows for a scheduled repayment of debt over a court-ordered period of time. Chapter 7, on the other hand, involves a liquidation of assets and often repossession of collateral to address money owed. Both have the potential to stall collections while your motion awaits resolution. This final point is significant in the context of this discussion, as it effectively adds to the amount of time you could use to gather the resources necessary to pay your debts.
According to the chapter 13 information portal in the Administrative Office of the U.S. Courts, there are rules regarding the amount of time this type of bankruptcy grants:
- Three years if your income is below the median, except for special circumstances
- Five years if your income is greater than the median for Tennessee
- No longer than five years for any plan
To reiterate, your opportunity to begin repaying your debts in peace would probably begin as soon as your bankruptcy motion was filed. When courts are considering debts for relief through official channels, lenders are no longer allowed to pursue their own collection methods. This might give you some opportunity to begin working on your debt repayment strategy, regardless of the outcome of your chapter 13 filing. However, please do not think of this as specific legal advice. Every situation is different and this is only meant as basic background information.