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Chattanooga Bankruptcy Law Blog

Would you give up social media to eliminate credit card debt?

Before the advent of Facebook, Twitter and even smartphones, Americans had to pick up their landline telephones to check in with friends and family members. Now, though, it is more likely that a Tennessee resident would simply check into their preferred social medial site to find out what is happening in the lives of the people they care about.

Social media is an important tool in the passage of information from person to person, but some individuals would be willing to go without their online accounts if it meant getting rid of the credit card debt that they carry. According to a national survey, nearly a third of all people surveyed claimed they would give up social media for a year if it meant emerging from the experience with no debt.

Factors that may have prompted your need for debt relief

Have you recently changed jobs? Did you and your spouse move to a new neighborhood in Tennessee where the cost of living is a bit higher than your previous location? Were you or someone you love recently in a car accident? These issues and more are common causes that often lead to unexpected financial crisis.  

You may struggle with finances at some point in life, as most people do. Sometimes, you merely have to tweak a few things and tighten your purse strings a bit to recover. Other financial situations are more serious, with potential long-term, if not permanent, consequences, such as facing home foreclosure or litigation filed against you to collect a debt. Understanding the types of issues that often lead to financial crisis and knowing what types of options are available to overcome such problems can help you get things back on track. 

What commitments are Chapter 13 debtors bound to fulfill?

Deciding to file for bankruptcy and to utilize the protections of the bankruptcy courts should not be done capriciously. A debtor must fulfill significant commitments in order to complete the process and to avoid further financial and legal issues that may result if they elect not to take their obligations seriously. A general overview of what debtors may face if they begin the Chapter 13 process can be useful for our readers.

One of the first commitments that Tennessee residents will face when they begin the Chapter 13 process is the requirement that they pay a filing fee. The fee may be paid in full or the debtor may be able to secure a payment plan that spreads the fee out over a period of time. If the fee is not fulfilled within a statutorily set period of time the debtor's case may be thrown out.

Trauma fees may cause medical bills to skyrocket

It is always better to be safe than sorry in situations in which someone's health may be compromised. This is just the reason that Tennessee parents rush their kids to the hospital when they suffer bad falls or show signs of medical distress. Similarly, a couple visiting the United States from abroad did just that when their then-infant child fell off of a hotel room bed and bumped their head.

The parents feared that the child may have suffered an internal injury, so they called 911 and rode in an ambulance to a local hospital. The child was assessed, given some formula to drink and ultimately was released without any further medical treatment. The family went on with its trip but was surprised two years later when they received a bill for the hospital's services that exceeded $18,000.

What is "straight bankruptcy"?

"Straight bankruptcy" is just another name for Chapter 7 bankruptcy and the process that goes along with it. Readers of this Tennessee debt relief and bankruptcy blog may know Chapter 7 bankruptcy to be the process of liquidating one's personal assets in order to pay off creditors and attain financial freedom.

Unlike Chapter 13 bankruptcy, which involves long-term financial planning and using one's income to pay off debts, Chapter 7 bankruptcy gets straight to the point of resolving a debtor's issues by wiping out debts in a one-time transaction. The proceeds of a liquidation sale are applied to the debts that the individual has to their creditors and in the end the debtor is released from the financial obligations that were tied to their bankruptcy discharge.

Increase in federal interest rate will impact credit card debts

When a Tennessee resident is struggling with overwhelming credit card debt, staying abreast of the actions of Washington politicians can seem like a waste of time. The immediate concerns of how a person will be able to pay their bills will weigh significantly more heavily upon them than the actions of individuals in the nation's capital.

However, it is often the case that those decisions from Washington, D.C., can have very real and very devastating consequences on people who cannot seem to get ahead of their credit card balances. For example, just recently the Federal Reserve announced that it will raise interest rates by one-quarter of a percent. While a quarter of a percent may not seem like a lot, it may have a big impact on debtors.

What are some of the consequences of having medical debt?

An unexpected illness or accident can result in a Tennessee resident spending time with their doctors and not at work. As a result, a number of individuals who incur medical costs find themselves facing significant debt when their bills begin to arrive. According to a study on medical debt, the presence of such debt in a person's life can have serious and long-term consequences.

According to the Kaiser Family Foundation and the New York Times study, about one out of every four Americans who incurs medical expenses has trouble paying those bills off. Of those who struggle to pay down their medical debt, nearly 90 percent of individuals claimed that their debt had a major impact on their families' lives. This includes individuals with and without health insurance.

A Chapter 13 bankruptcy may save your home from foreclosure

When you purchased a home here in Hixson, you intended to make your mortgage loan payments on time. Then, you suffered some sort of financial calamity that made it impossible to meet the demands of your creditors, let alone your mortgage lender.

As you got more behind on your payments, you may have attempted to work something out with your lender, but to no avail. Now, you face foreclosure, but you don't want to lose your home. The good news is that your lender won't get the authorization to sell your home overnight. You have time to determine what debt relief option will work best for you.

Unusual connection between lottery winnings and bankruptcy

It is easy to assume that if a person wins the lottery that they will be set up for financial success for the rest of their life. In fact, if a Tennessee resident wins big and pockets millions of dollars in a lottery windfall, then they may foresee a future where their children, grandchildren and other descendants may live without any economic concerns. However, this is often a fallacy. Many lottery winners end up filing for bankruptcy due to financial mismanagement, unwise investments and victimization by unscrupulous individuals.

A recent study adds to this phenomenon, though, by finding that the neighbors of people who win the lottery also have higher than average bankruptcy filings. There are different hypotheses for why this might be true, but it seems easy to follow that individuals want to "keep up with the Jones's" and live the same lifestyles as their newly rich neighbors.

Do you need to give up your property if you file for bankruptcy?

Chapter 7 bankruptcy can seem like an extreme financial process for those Tennessee residents who are struggling to find solid financial footing. Often referred to as "liquidation bankruptcy," this form of bankruptcy requires filers to sell off items of personal property in order to come up with money that can be used to satisfy the filer's creditors. Unlike Chapter 13 bankruptcy, which involves the repayment of debts over time with the filer's incomes, Chapter 7 bankruptcy relies on the proceeds of the filer's liquidations to settle their outstanding debts.

However, a Chapter 7 bankruptcy filer does not need to sell everything that they own in order to meet the terms of their chosen path to solvency. State and federal regulations provide individuals with exemptions that allow filers to protect from the bankruptcy process certain articles of property and items of value so that they are not destitute when they emerge from the bankruptcy process.

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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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