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Chattanooga Bankruptcy Law Blog

What is the most important part of a Chapter 13 bankruptcy?

Hint: It's not the petition. Of course, you need a petition to begin the bankruptcy process and lay out some basic information regarding your financial situation, but that isn't what's at the heart of a Chapter 13 bankruptcy.

The most important part of a Chapter 13 bankruptcy is the repayment plan. This document will govern your finances for the next three to five years. This plan outlines how much each of your creditors will receive in payments each month, and the court must approve it. You will make your payment to the trustee and not directly to your creditors. The trustee will then disburse the funds in accordance with your court-approved plan.

What kind of assets can bankruptcy exemptions protect?

When personal finances get out of control, many wonder how they will ever get their finances back on track? While it can seem like an endless uphill battle, there is a way for those struggling under the weight of debts to find relief. One way of doing this is to file for bankruptcy. Bankruptcy tends to have a negative stigma associated with it, but it can really be the best option for those in a bad financial situation.

Not only can bankruptcy give those suffering under debts a fresh start, it can also help to protect specific assets that one wishes to keep in the wake of their financial crisis. Oftentimes, when debt is a real issue, creditors beckon and one may worry about the security of their home or other significant asset. If a person has an asset that they would like to hang on-to while they pay off their debt, they should consider the benefits that bankruptcy exemptions would allot to them. Bankruptcy exemptions allow debtors to keep certain assets under their control and keep them safe from creditors.

Even those who have insurance can face crippling medical debt

Although the number of Chattanooga residents who don't have health insurance has dropped significantly since the passage of the Affordable Care Act, medical debt is still a problem for many residents. Medical debt can cause a family to suffer from emotional stress and financial strain.

Even those who have medical insurance can suffer from medical debt. Many health insurance plans require their participants to make out-of-pocket payments that can add up to thousands of dollars. For the many families who are living paycheck to paycheck, this can be a crushing situation. 20 percent of people under the age of 65 who have health insurance admit to struggling to pay medical bills. 53 percent of people who don't have health insurance struggle with medical bills. Health insurance in the United States has been changing with the insurance plans raising deductibles and co-payments, often into the range where regular families can't afford them.

Those in financial trouble need get a handle on credit card debt

We have all been there. That moment when you check your bank account and do not like what's looking back at you. Making financial sacrifices isn't unusual until your receive your next paycheck, but what about when you are barely making the minimum payments on your credit cards or have completely fallen into default on your mortgage or other financial obligation? There is a point when financial burdens can get out of control, and one way to remedy the problem is to get a handle on liabilities, like credit card debts.

Life can get expensive; there are so many things one needs but that one also wants! It can be hard to get a handle on spending, especially when a person's income is variable or a sudden expense changes the state of a person's finances completely. Credit cards can be a seemingly easy way to pay for expenses but at the end of the day, their primary balances plus interest and fees can get out of control. When one can barely afford to buy groceries because their credit card's minimum payments are so high, what's a person to do?

Even pro athletes aren't immune to the possibility of bankruptcy

With great success comes the possibility of great failure. While this isn't usually how a person should approach one's success and progress in life, it is something that should be heeded when thinking about money management. Everyday people declare bankruptcy due to debts and other unmanageable expenses. Even professional athletes and their million-dollar contracts are not immune to this fate.

For example, Tennessee Titan Vince Young declared bankruptcy after signing a $26 million contract with the team in 2006. Some wonder how a person could possibly spend $26 million in just a few years' time, especially when most people will never make that amount of money in their entire life. However, it just proves that money is finite and even if it feels endless, it can and will end if spending gets out of control. According to Young's former financial advisor, Young "spent money faster than he earned it."

The consequences of not paying your debts

Aside from the people in your life, your car, your home, your education and your health are likely among the things you cherish most. They are also probably the things that cost you the most money. In fact, as much as you need these things, paying for them may be the reason you can't sleep at night.

The most recent data shows that you are among the many in Tennessee and across the country struggling with debt to the tune of $12.73 trillion. This is the highest level of debt Americans have held since 2008. The temptation for many — and maybe you have felt this too — is to simply pretend it isn't there and see what happens. You may stop opening your mail, answering your phone or seeing who's at the door because you just know it will be someone harassing you for payment.

Exploring bankruptcy as an option for medical debt issues

Of all of the reasons why Tennessee residents might need to explore the pros and cons of filing for bankruptcy, medical debt can be one of the most serious. An unexpected medical condition can leave any family's savings account running dry, even with health insurance coverage. So, can bankruptcy be a viable option for Tennessee residents who are facing overwhelming medical debt?

The short answer is "yes." Under Chapter 7 bankruptcy, medical debt is one type of debt that can be discharged. As previous posts here have discussed, in the Chapter 7 bankruptcy process, the filer will list all assets and all liabilities, including medical debt. After non-exempt assets have been sold off, with the proceeds going toward outstanding debt balances, the remaining debts will be discharged.

Getting in control of your credit card debt

Many Tennessee residents struggle with financial problems, despite the improving national economy. For many people, the primary concern is debt, particularly credit card debt. While credit cards can be useful financial tools, they can also be traps, burdening Tennessee residents with revolving balances and steep interest rates that can make it seem like the debt can never be paid off. However, a recent article had a few tips for people who are looking for ways to get control over their rising level of credit card debt.

The first tip is to try to keep track of what you spend and what you earn. Most people would call this making a budget, but it is really more than that. Keeping track of your income and expenses will allow you to identify where you can make cuts and where you can apply more income to pay off credit card debt. Then, as the next step in the article points out, it is possible to craft a reasonable budget to live by.

Bankruptcy is an option for those who can't make payments

Sometimes, life's unexpected expenses can creep up on a family and drain all of their available funds. Major events such as medical incidents or layoffs can put a family in a bad financial spot. This can make it difficult for a person to make their mortgage payments on time.

If payments become delinquent for an extended amount of time, homeowners can face foreclosure. This is a catastrophic blow for Chattanooga families. However, there are ways to avoid foreclosure, and one of those methods is by seeking bankruptcy solutions. Chapter 13 or other bankruptcy methods can help a person keep assets that are of great importance, such as a family home.

Attorneys can provide counsel on debt relief issues

Many Chattanooga residents use credit cards, often on a daily basis. Credit cards are an easy and convenient way to purchase items. But, sometimes a consumer may find themselves strapped with unmanageable credit card debt. In these situations, there are effective options for debt relief.

When a person finds themselves deep into credit card debt they can feel overwhelmed and depressed. Money worries are common and often crippling for people. Creditors may be calling daily, there may be legal actions being taken and bills are constantly arriving in the mailbox. This is extremely stressful for a good person who is undergoing financial hardships.

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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