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Chattanooga Bankruptcy Law Blog

Don't let fear of losing assets keep you from debt relief

We spend years gathering things-the car given by parents on graduation day, the china dinnerware you got on your wedding and the vintage ring your grandmother gave you. Many Tennessee residents may lug their prized possessions around from city to city as they move around for various reasons. This is why the idea of filing for bankruptcy may be daunting-as mentioned in last week's post, many are under the impression all assets must be given up in a bankruptcy filing. But this is not the case.

There are many things that a filer may be able to keep, known as exemptions. Last week's blog listed a number of assets, including appliances, tools of the trade, and jewelry and vehicles under a certain amount. Depending on the type of bankruptcy you opt to file for, the exemptions vary. But the end result is the same-not everything is lost in the process of bankruptcy. And an even better end result is the freedom from crippling or overwhelming debt and anxiety.

Can I keep my stuff if I file for bankruptcy?

Even while dealing with overwhelming and insurmountable debt, many Tennessee residents do not file for bankruptcy because they fear that taking this step will require that they give up their property. In reality, you may be able to keep most of your assets and still enjoy the benefits of seeking bankruptcy protection.

Depending on which chapter of bankruptcy you file for, certain types of property and assets may be exempt. If fears over losing what is most important to you is holding you back from taking an important step toward a stronger financial future, you would be wise to seek the counsel of an experienced bankruptcy attorney.

Exceptions to creditors' levy of bank accounts in Tennessee

Being in debt can be a very stressful situation. Having to worry about making payments that one knows cannot be made, whether due to unemployment, large medical expenditures, or other sources will wear on any Tennessee resident. Eventually, such debtors may also start to consider that their creditors may attempt to come after any property they may have. This may include real estate or personal property, and especially any 'cash' the debtor holds, even if it is in the form of electrons in a bank account.

When a creditor sues a debtor, if the creditor prevails, it will generally reduce the debt to a 'judgement.' This judgement allows the creditor to go ahead and take some legal actions to collect the money owed. One of these actions is known as a 'levy.' Levying something is basically to take it, or a portion of it, to satisfy the judgement. In Tennessee, however, there are certain restrictions on what a creditor can levy from one's bank account.

Is there an exception to 'wildcard' bankruptcy exemptions?

It is a sad reality of modern American life that it presents many opportunities to fall into debt. Whether one owes money to credit card companies, hospitals or other medical professionals, or has gotten behind on mortgage payments, being in debt is generally no fun. A period of unemployment, failure of a business, or a chronic sickness can all be factors in creating such a situation for Tennessee residents.

About a month ago, we touched on the fact that those in heavy debt may look to the bankruptcy code for relief from some of the crushing financial effects such circumstances can bring about. While some of a bankruptcy filer's property may be at risk of being sold to pay debts, there are ways to protect certain things from creditors.

The best way to handle Tennessee medical debt is prevention

Getting sick or injured is part of the human condition. Since none of us is immune to the effects of disease or unexpected injuries, we can expect to deal with them at some point in our lives if we live long enough. And, even younger, seemingly healthy individuals can be seriously hurt in an accident or fall victim to cancer or other ailments that do not discriminate. When this occurs, Tennessee residents may need medical intervention; in some instances, this could mean long hospital stays or expensive surgeries, therapy, or medications. Paying for these interventions may not be the first thing on a patient's mind, but the costs will have to be dealt with sooner or later.

While many Tennesseans may have health insurance, they could still incur sizeable medical bills, depending on the terms of their policies. This may mean piling up of medical debt to the point that it becomes unpayable by the patient. There may, however, be a few ways to prevent medical bills from spiraling out of control.

Chapter 7 bankruptcy filings go up around tax day

Contrary to what many Tennessee residents may believe, many, if not most, people who file for bankruptcy are not those who have no job or income. In a good number of cases, bankruptcy filers may now have an income, but fell behind on bills due to an illness or prior unexpected period of unemployment or other unforeseen circumstances. This means that many people who are contemplating filing for bankruptcy also file federal income tax returns, and may even get income tax refunds.

In fact, over a four-year period from 2013 to 2016, the number of filings in March and April, that is, around the time many people file their taxes, tended to rise. According to a review of Chapter 7 filings, which is the 'liquidation' type most often used by individual filers, the month of March saw a spike of between 26 and 34 percent in such filings over that time period. In the Aprils of the four-year time frame, filings of Chapter 7s were up between 15 and 15 percent.

Break your cash advance dependency

Many Tennessee residents who are struggling financially need some form of debt relief. There is nothing wrong with that. The problem lies in the type of relief on which you rely.

Sadly, there are some options out there that end up placing people in worse positions than where they started. A great example of this would be a cash advance. This is marketed as a quick-fix solution, but for most, it fails to address the underlying issue and creates a dependency and a cycle of borrowing.

Who is now eligible for Chapter 13 bankruptcy?

Filing for bankruptcy is a big decision, and something that should be thought through. Whether it is necessary due to a period of unemployment, a serious illness, or other unexpected expenses, Tennessee residents thinking about bankruptcy should understand the different options available to them and what they might mean. This blog has previously discussed some of the main differences between filing for Chapter 7 bankruptcy and Chapter 13, including some of the basic eligibility requirements.

So what are the current federal rules governing the filing of a Chapter 13 case?A person wishing to file bankruptcy must complete credit counseling within 180 days prior to filing, and must not have had a previous case dismissed with 180 days of filing due to failure to appear or comply, or to allow creditors to recover property.

Discharging credit card and medical debt in Tennessee

Life moves pretty fast, and sometimes unexpected things happen along the way. An unexpected injury or a lengthy illness can mean large medical bills, especially in this time of uncertainty with regard to health insurance. A period of unemployment due to a layoff or other circumstances beyond one's control can lead to having to live on credit for a while. Even those who do have jobs may not make enough in our current economy to be totally without credit card debt. Required home or vehicle repairs may hit, causing a Tennessee resident to rack up debts that become difficult or impossible to pay.

Credit card debt can be very costly, especially as interest rates rise, and penalties accrue due to late or missed payments. The amount of such debt can easily grow beyond a family's ability to handle it in no time flat. It may be easy to give in to despair in such circumstances, and to feel that there is no way out. However, that may not be the case, as there may be legal options for people in this situation.

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

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