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Chattanooga Bankruptcy Law Blog

Who can file for Chapter 13 bankruptcy?

While many Americans may be moving through 2019 and holding strong to the financial resolutions that they made as the New Year came into being, others may be struggling to pay down their debts as they fight to keep their heads above the economic waters. Some debt relief options may be an action of last resort for a Tennessee resident who wants to handle their debts and obligations on their own, but in some cases it is not realistic for a debtor to find financial success without help. Chapter 13 bankruptcy may be an option for individuals who meet the requirements for pursuing this form of financial help.

Only non-business debtors may file for bankruptcy through Chapter 13, and only debtors whose outstanding obligations are under the statutory limit may use it as a means to finding financial freedom. Men and women who wish to file for Chapter 13 bankruptcy must complete credit counseling, and they must not have any recent bankruptcy discharges in their histories.

How the automatic stay may support a debtor's needs

Bankruptcy is not an easy process, regardless of the route that an individual chooses to pursue to take control of their financial problems. A Tennessee resident who elects to use Chapter 7 bankruptcy to manage their debts may worry about liquidating their assets and whether they will emerge from the process able to move their life forward. One aspect of bankruptcy that is incredibly helpful to men and women who are struggling under the weight of outstanding financial obligations is the automatic stay. When a person files for bankruptcy the automatic stay stops creditors from taking further action against the person throughout the duration of their bankruptcy proceedings.

The automatic stay can stop a person from being thrown out of their home. That is because the legal process of eviction is stopped once a person files for bankruptcy. The eviction process may begin again when the bankruptcy process ends, though during the bankruptcy proceedings the debtor may be able to work with their creditor to find a way to stay in their home.

Are you willing to negotiate with your creditors?

If you are behind on payments to a creditor, you know the sinking feeling when your phone rings. Creditors and debt collectors can legally contact you frequently, as long as they don't harass you, lie to you or threaten you. Nevertheless, a conversation with a debt collector is seldom a pleasant one, and you would be wise to learn the boundaries in which creditors must act when collecting a debt.

On the other hand, you may be able to use phone calls from creditors to your advantage if you know how to negotiate. With the right skill and calm demeanor, you may be able to obtain a resolution that works for all involved.

Why is some property exempt from bankruptcy proceedings?

Going through bankruptcy can be stressful on a Tennessee family. After finding themselves in a dire financial situation, the members of the family may have to make the difficult decision to file for Chapter 7 or Chapter 13 bankruptcy. Starting the bankruptcy process can mean cutting back on spending, rearranging financial priorities, and even selling off items of owned property.

Giving up property can be hard but may be required based on the form of bankruptcy that a person chooses to use. If they are required to sell off items that they own they will want to explore just what exemptions may apply to their particular bankruptcy case. If a parcel or piece of property is exempt from bankruptcy it means that it may be kept by the owner and not included in their bankruptcy estate. In other words, an individual can keep exempted property rather than having to sell it off to repay debts.

Unexpected medical costs a major cause of personal bankruptcy

For most people, having a job is a necessity. Without gainful employment they cannot keep food on their tables, rooves over their heads, and clothing on their backs. However, when it comes to finding work, many Tennessee residents also look for job opportunities that provide them with benefits like health insurance.

Health insurance can help individuals cover their medical costs when they have to go to their doctors or spend time in the hospital. Health insurers can help their enrolled clients negotiate a reduction in some of their medical costs to make the payment of medical services more achievable. However, a recent report suggests that even individuals with health insurance are struggling to pay their medical bills. As a result, many of them are turning to bankruptcy to resolve their outstanding medical debts.

A discussion of disposable income related to a Chapter 13 claim

When a Chattanooga resident files for Chapter 13 bankruptcy they will be expected to use some of their income to pay off their debts over time through the execution of a repayment plan. As such, a person must have some disposable income that they can dedicate to this purpose. Without disposable income, a person may not be able to fulfill their responsibilities under their unique repayment plan.

Disposable income is a specific term when it comes to Chapter 13 bankruptcy. According to information promulgated by the United States Bankruptcy Courts, "disposable income" is income that is left over after a person has covered the reasonable costs associated with their needs and the needs of their dependents as well as contributions to charities. A person does not have to factor in child support payments that they receive from an ex-spouse or partner when computing their gross income.

Take control of burdensome credit card debt

It is hard to imagine how a Tennessee resident may live in the modern world without a credit card. While it may be possible to write checks and pay cash for many of the expenses a person lives with on a daily basis, the ubiquity of online shopping, bill paying, and banking has made it convenient for individuals to manage transactions from home and without physical money. Credit cards can be an important part of a person's spending power and, when used responsibly, it may offer them opportunities to make purchases when it is convenient for them to do so.

However, as readers know, credit card use can get out of hand and can lead to difficult financial circumstances for some individuals. When a person's credit card spending exceeds their capacity to pay their bill, they may wind up with burdensome and unmanageable credit card debt.

A minor medical reaction leads to a major medical bill

The human body is an amazing thing, but not everyone knows exactly what ailments and conditions may be lurking just below their own skin. Even when Tennessee residents stay on top of their health and meet regularly with their doctors, they may suffer surprising reactions and conditions that are unlike anything they have every experienced.

A man who received a flu shot found this out after he had a surprise reaction shortly after his vaccination. That reaction triggered a very long and costly process for him. The man got his flu shot at work and within minutes fainted. Though he was prone to fainting, he and his co-workers became alarmed when he began to vomit. This reaction prompted the man to take an ambulance to the hospital where he spent eight hours waiting and being subjected to different medical tests.

How much debt can one person handle?

Many Tennessee consumers have credit card debt. Even though most people have this type of debt, not everyone can manage it. In fact, some people find they are not able to really manage their balances, eventually leading to precarious financial situations. Credit card balances can quickly spiral out of control.

Every person is different, and the amount of debt a person can carry depends on the details of his or her income, financial obligations and other factors. When a consumer finds that his or her debts are more than he or she can manage, it may be beneficial to consider the legal ways a by which a person can confront credit card debt once and for all. One option includes filing for bankruptcy.

What does asset liquidation mean?

Chapter 7 bankruptcy is a legal tool that may help some Tennessee residents eliminate their debts and improve their financial futures. However, as it does require individuals to meet certain criteria, it is important that readers talk to their attorneys about whether this form of personal bankruptcy will meet their needs. Chapter 7 bankruptcy requires individuals who do not have enough income to sell off or liquidate their assets in order to have funds to pay their creditors.

Asset liquidation is, therefore, just that - the sale of personal and real property. Readers may have seen signs in the windows of stores that say "warehouse liquidation," indicating that the businesses are attempting to sell off their inventory for cash. Those businesses may be choosing to close or may be involved in the Chapter 7 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
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