Bankruptcy is something that you’ve been considering for a while now. You’ve done some research, but nothing in depth, and all you’ve really come across is that chapter 7 in Knoxville gets you in and out quickly. Since you learned that bit of information, you’ve decided that you have to file Chapter 7 and that Chapter 13 is to be avoided at all costs. The problem is, you can’t simply go into a Chapter 7 just because you want to. You have to go through what is known as the means test to find out which chapter you can file under.
The means test is the first step you take towards filing for bankruptcy. It also gives you an idea of what you are going to have to go through when you do fill out the petition. In the means test, you are going to find questions that ask you about your income, an average amount of your monthly debts, minor math problems to solve, and coming to a sum total of your income and outflow. If your income falls under the state’s median, you are automatically eligible for filing chapter 7 in Knoxville. In the event your income is more than the state median income, you have to file under Chapter 13, although that isn’t automatic.
When you are eligible for Chapter 7, you are going to enter into the chapter of bankruptcy known as liquidation. What this means for you is that you have to give your assets that have value to the court to sell. Proceeds from the sale of your assets are divided up and sent to your creditors to settle the debts for pennies on the dollar. But, not everyone who files for bankruptcy has assets to liquidate. The court typically looks for high dollar items such as collector cars, real property, machinery, etc., that can be easily sold. If you have nothing of value to sell, you are typically able to exempt it from the filing and keep it.
Making the decision to file for bankruptcy is a big step. Take the time and talk to a lawyer before you move forward in order to learn about what is involved with filing a petition.
