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What exactly is personal bankruptcy?

Bankruptcy has been a part of American jurisprudence for quite a long time and many people have heard of the term. Although its presence in the news is rather ubiquitous, some readers of this Tennessee law blog may not actually know how this multi-faceted legal process is defined. This post will be dedicated to explaining what bankruptcy is to an American consumer.

First, and as suggested by the introduction to this post, bankruptcy is not a single event. Like many other legal endeavors, it is a process that plays out over a period of time. Bankruptcy begins when a party files the right paperwork to initiate it. Depending upon the needs of the consumer and the path he chooses to pursue, he can select from a number of different bankruptcy options.

While some bankruptcy processes require an individual to sell off or liquidate his assets and others require him to make plans for paying off debts, all forms of bankruptcy have similar end goals: to free him from liability on loans and other financial obligations. When a person is liable to pay a debt or loan, he is personally responsible for its satisfaction. With some exceptions, bankruptcy absolves him of those responsibilities and allows him to rebuild his financial health from a clean slate.

It is important that readers of this blog understand that bankruptcy is not an easy process. It can require sacrifice on the part of a filer and not all bankruptcy filings are successful. In some cases a debtor will remain liable to some of his creditors after the bankruptcy process ends, and in some situations a debtor may not qualify for the form of bankruptcy that he desires to pursue.

As different forms of bankruptcy require different actions on the part of debtors, readers of this Tennessee bankruptcy law blog may wish to speak with their own attorneys about how personal bankruptcy may serve them. Pursuing bankruptcy is not without challenges, but for some it can be a rewarding experience that allows them to start fresh toward a clear economic future.

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