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The road to Chapter 7 bankruptcy

No one wants to file bankruptcy, but sometimes there is no choice. If it appears that bankruptcy is inevitable, debtors might want to consider Chapter 7. For those Tennessee residents who are not sure if bankruptcy is in their future, the following information might help.

The build up to bankruptcy can take all shapes and sizes. In general, however, it begins with someone struggling with debt, often credit cards or medical bills. The debt and interest on the debt begin to accumulate. Making matters worse, impatient lenders get tired of waiting for the borrower to pay so they sell the delinquent accounts to a collection agency.

If the agency sues they may get a default judgment if the creditor fails to show. Regardless, if the debt is owed the creditor now becomes the judgment creditor. With a judgment under their belt, the creditor now has a number of new, legal ways to claim what is theirs, such as wage garnishment. The duration that a judgment remains valid varies from state to state.

If a creditor does not sue, they can go after the money on their own. This is often the harassing and annoying phone calls so many people are all too familiar with. While many creditors could care less, there are laws concerning debt collection practices. For example, calling before 8 am or after 9 pm is harassment under the Fair Debt Collection Practices Act.

Ultimately, however, the debtor needs to decide how to approach the debt. Some debtors can work with their creditors to establish repayment plans, but too often by this time the debtor has passed that point. In such cases, it is time for debtors to begin considering options like Chapter 7 and Chapter 13 bankruptcy.

Source: Fox Business, "Broke, Sued for Debt and Harassed by Collectors," Erica Sandberg, Aug. 23, 2012

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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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