Bankruptcy is a method by which debts are discharged by filing a petition in federal court. Often, consumers, especially those who have maximized their credit limits and have no savings, cannot pay their bills when a crisis hits, such as a job layoff, accident, or illness.
Bankruptcy provides consumers with relief from creditor pressures and a fresh start.
After you file a Chapter 7, most creditors will be prohibited from taking your wages to pay your debts. To succeed in a Chapter 13, you must have a regular income, such as wages from employment, alimony, or monthly Social Security benefits. In a Chapter 7, most of your property will be sold by a Chapter 7 trustee and the money will be given to your creditors. You can keep some of your property if it is considered to be exempt property under the laws of Tennessee. If you own the house in which you live, it might be sold in bankruptcy.