Many aspiring or current entrepreneurs in Tennessee worry about the effects that bankruptcy may have on their ability to secure financing for their projects. However, there is more myth than fact to many of the ideas surrounding the relationship between debt restructuring and business loans.
When you file for Chapter 13 bankruptcy in Tennessee, you must agree to a repayment plan. This plan outlines how much you will pay back each creditor you have. It is your obligation to repay your debts and stick to the plan as part of your bankruptcy agreement. If you complete the plan, the court clears any remaining debt, and you get a fresh start. However, sometimes things do not go the way you want. If you end up unable to fulfill your obligations, the U.S. Courts explain you could file for a hardship discharge.
Deciding to file for bankruptcy is not always an easy choice. Many Americans become buried beneath medical expenses, mortgages, credit card debt and other bills and run to bankruptcy as a way to find freedom from their financial stress. Part of this stress may stem from harassing creditor calls, who in some cases, threaten people with wage garnishments, lawsuits and repossession of property if debtors fail to make payments. Once people file their Chapter 13 paperwork, however, it can release them from creditors’ attempts to collect past due debt while the bankruptcy is being processed.
Chapter 13 bankruptcy could be a powerful tool to restructure and limit the long-term impact of your debts. It could, in many cases, reduce financial risks, namely by limiting your creditors' rights to repossess the property you have offered them as collateral. Even though most Tennessee Chapter 13 bankruptcies proceed without incident, some debtors encounter problems keeping up with payments.
At Jimmy E. McElroy & Associates, we are proud of the work we do — and we like to think of it as more than just helping people file for bankruptcy. Just like our clients, we are members of the community we serve. Our primary goal is to help our Tennessee neighbors who might have overextended their finances to get back on their feet and back to pursuing their dreams.
Many people who file Chapter 13 bankruptcy fear they will not be able to successfully apply for a loan, or that they will only find lenders that require such high fees that it is not feasible to apply for financing. So when bankruptcy filers find a Tennessee lender who is not interested in their past credit history, it seems like they have found the answer to their problems. However, a lender who does not ask you about your past debt history may actually be bad news.
At the law offices of Jimmy E. McElroy & Associates in Tennessee, we understand and empathize with the way our clients feel when they face overwhelming debt and bankruptcy is their only way out. Sometimes Chapter 7 better fits their needs, but if you want to save your home from foreclosure and have a second mortgage on it, Chapter 13 may be your best option.
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.
Anyone new to Tennessee bankruptcy proceedings is likely to be curious about whether they can qualify for Chapter 13 bankruptcy. While it is true that Chapter 13 offers the possibility of preserving assets or an entire business in the face of creditor demands, this type of bankruptcy requires specific criteria for someone to be able to file for it. A person can be disqualified for filing Chapter 13 for a number of reasons.