Seasoned Memphis-area Bankruptcy Attorneys

Bankruptcy

Seasoned Memphis-area Bankruptcy Attorneys

When an individual or business is unable to repay its debts and obligations, that person or business may seek the protection of the bankruptcy courts. Bankruptcy is a process whereby the person or business is either relieved of its obligation to repay certain debts or is able to restructure its finances and obligations. This can help the person or business timely pay its obligations going forward. Although bankruptcy is meant to assist the debtor obtain relief from its creditors, the actual process of petitioning for bankruptcy is certainly not debtor-friendly. If a petition is not completed correctly, bankruptcy will afford the debtor with little or no legal protections.

The legal counsel and assistance provided by an experienced Tennessee bankruptcy attorney is the best way to ensure your bankruptcy petition is approved and you receive the maximum benefit from filing for bankruptcy protection. The seasoned Memphis-area bankruptcy attorneys at Douglass & Runger, Attorneys at Law, are available to assist you or your business in obtaining debt relief through the bankruptcy process.

Different Types of Bankruptcy are Available

There are various types of bankruptcy available. Each type of bankruptcy is named after the chapter of the federal bankruptcy code in which that particular type of bankruptcy is described. The most common type of bankruptcy is the “Chapter 7” bankruptcy; however, it may not be ideal for every debtor. Your bankruptcy attorney will discuss with you your assets, liabilities, and overall financial goals in order to determine the best bankruptcy chapter under which to file your petition. Some of the more common types of bankruptcy include:

  • Chapter 7 Bankruptcy. This type of bankruptcy is also known as a “straight” or “liquidation” bankruptcy. In this type of bankruptcy, the debtor turns over certain assets to a person designated by the court (called the “trustee”). The trustee liquidates the nonexempt assets of the debtor and uses the proceeds of this liquidation process to pay some amount toward the debtor’s obligations. Most of the debts that remain after this process are then discharged, meaning that the debtor has no further obligation to pay these debts.
  • Chapter 11 Bankruptcy. This type of bankruptcy involvesa restructuring of a business’s existing financial affairs. More specifically, a business filing for Chapter 11 bankruptcy is allowed to rearrange its liabilities and obligations and pay back its creditors while continuing on with its business. While the business owners of a company in Chapter 11 bankruptcy retain day-to-day control of the business, the bankruptcy court has the ability and obligation to approve or disapprove major business decisions.
  • Chapter 13 Bankruptcy. This type of bankruptcy involves a repayment plan in which an individual debtor proposes to repay all or part of his or her obligations over a three to five year period. The debtor proposes the plan, and if the plan is approved by the court, will pay the trustee of the court a certain amount of money each month toward that plan. The trustee is then responsible for distributing the amounts received to the creditors in accordance with the plan. A Chapter 13 bankruptcy is available for debtors who make too much money to qualify for a Chapter 7 bankruptcy and/or for debtors who have assets like a home or car that they would like to retain. If a debtor is unable to continue making payments under the plan, his or her bankruptcy case may be dismissed or converted into a Chapter 7 case.

The “Automatic Stay”

Debtors who file for bankruptcy usually do so after attempting to handle their debts on their own for a certain period of time. By the time they file for bankruptcy, these debtors may have been contacted numerous times by various debt collectors by telephone, mail, or other means. Once a bankruptcy petition is filed, however, an “automatic stay” goes into effect immediately. This automatic stay is a court order that prevents debt collectors from taking any further actions designed to collect any debt owed by the debtor. Any collection calls and letters must stop and any pending litigation is immediately halted. In some cases, the creditor will be prohibited from contacting any co-borrowers about an obligation owed by the debtor.

The automatic stay lasts throughout the bankruptcy process or until a creditor successfully petitions the court to have the stay lifted. Even if a creditor petitions the court to remove the automatic stay and allow it to resume collection activities, the court will generally decline to lift the automatic stay unless it finds a good, compelling reason for doing so.

Certain Debts Cannot Be Discharged in Bankruptcy

A successful bankruptcy petition will result in the debts of the debtor being “discharged.” To say a debt is “discharged in bankruptcy” means that the debtor is no longer legally responsible for paying such obligations and debts. This enables debtors to obtain a “fresh start” after bankruptcy. However, not all debts can be discharged in bankruptcy. In particular, the following obligations generally cannot be discharged through any chapter of the bankruptcy code:

  • Taxes owed to the federal government or a state or local government;
  • Child support obligations;
  • Student loans; and
  • Certain court judgments and court-ordered restitution.

While the debtor is in bankruptcy, a debt collector cannot attempt to collect these debts (because of the automatic stay). However, once the bankruptcy is over either through a successful completion or through a dismissal of the bankruptcy petition, the automatic stay is lifted and these obligations can then be collected. What is more, these obligations may have earned interest while the debtor was in bankruptcy, resulting in the potential that the debtor will owe more on these obligations after bankruptcy than before.

Why It Pays to Have a Bankruptcy Attorney’s Help

Some people mistakenly believe that in a bankruptcy the debtor must part with all of his or her assets. This is simply not true. State and federal laws allow the debtor to retain certain property during and after the bankruptcy process. This is referred to as “exempt” property: The trustee is not able to take this property and sell it to satisfy the debtor’s obligations. All other property that is not exempt from the trustee’s grasp is called “nonexempt” property.

It is important that your bankruptcy petition accurately list your assets and whether the property is exempt or nonexempt property. Failing to properly list an asset as exempt or nonexempt can result in you losing certain property and having this property liquidated. A bankruptcy attorney can help ensure this does not happen to you.

Contact Your Memphis Bankruptcy Lawyer for Help

When you are in dire financial straits, bankruptcy can help give you the breathing room you need in order to get your financial house back in order. In order to obtain the maximum benefit from state and federal bankruptcy laws, you should seek the guidance and advice of Douglass & Runger, Attorneys at Law. Our team of dedicated and experienced bankruptcy lawyers can help ensure you file for the appropriate type of bankruptcy and that you are able to retain as many assets as possible. Contact us today by calling (901) 388-5805.

2820 Summer Oaks Drive,
Bartlett TN, 38134
Douglass & Runger is an association of attorneys, not a partnership. Douglass & Runger serves clients in the greater Memphis area, including Arlington, Bartlett, Collierville, Cordova, Germantown, Lakeland, in addition to the surrounding counties, including, but not limited to, Chester County, Fayette County, Hardin County, Hardemann County, Lauderdale County, Madison County and Tipton County Tennessee. The information contained herein is for informational purposes only and should not be construed as legal or tax advice. The transmission or receipt of any information on this website is not intended to, nor does it create, an attorney-client relationship. If you have any questions, or would like to set up a consultation to discuss your case, please contact us at help@douglassrunger.com , all rights reserved.

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