Chattanooga Bankruptcy Law Blog

Most bankruptcy proceedings in the Chattanooga area are started by a person or corporation who is struggling with a heavy debt load and an insufficient cash flow. On occasion, a bankruptcy proceeding is started by one or more creditors of the debtor who fear they will not be paid because the debtor will squander its assets instead of paying its debts. Such proceedings are called involuntary bankruptcies, and they operate under a special section of the Bankruptcy Code.

The requirements for commencing an involuntary proceeding are very strict. Deviation from these requirements can subject the violator to significant penalties. An involuntary case can be started under either Chapter 7 or Chapter 11 against any person, except a farmer or a non-profit corporation, that may be a debtor under either Chapter 7 or Chapter 11. An involuntary case can be started by three or more entities, each of which holds a claim against the debtor that is not (a) contingent as to liability or (b) subject to a bona fide dispute as to liability. The total amount of claims held by the filers of the involuntary petition must exceed by $10,000 the value of any lien against property of the debtor. After the initial petition is filed, other creditors can ask to join the proceeding as a creditor.

Many people in Chattanooga and Eastern Tennessee who wonder about filing a petition for bankruptcy are struggling under a mountain of credit card debt. They may have heard that bankruptcy offers protection from credit card companies that are trying to collect on these delinquent accounts, but they don't understand the process and may be skeptical about whether a bankruptcy petition will offer any protection. Any question about bankruptcy can be answered only with reference to the specific financial situation of any given person. But, a bankruptcy petition will bring all collection actions to a stop until the bankruptcy proceeding is complete. This is known as the "automatic stay."

Bankruptcy is intended to give financial relief to people who cannot manage their debts. The automatic stay is instrumental to achieving this end. When a petition for bankruptcy is filed under Chapter 7, Chapter 11 or Chapter 13, the court where the petition is filed issues an order to all creditors identified by the person who filed the petition directing that all collection proceedings stop immediately.

Whether you are buying your first car or upgrading to a new model, it may come as a surprise that these days a new car can cost, on average, over $37,000. With car prices continually increasing, many people in Tennessee are taking out auto loans to pay for their new vehicles. In fact, in total $1.2 trillion is now owed on auto loans in the U.S.

This is troubling as more subprime loans are be being granted. These subprime loans are given to those whose credit scores are below 620. Subprime loans often are paid back for a longer time period, some lasting as many as seven years. This is problematic as it means that subprime debtors ultimately may not be able to afford to pay back what they owe on the auto loan. According to the U.S. Federal Reserve Board, the number of outstanding auto loan payments is going up, a problem that is only compounded by the fact that there is a larger group of debtors that are at a high risk of becoming delinquent on their loan.

There are many consequences to owing a significant amount of debt. If you are in a difficult financial situation and behind on your payments, one of the things you may face is the threat of repossession. At this point, you may want to know what you are up against and how you can take steps to reclaim your financial future.

Repossession is the process of taking back property bought on credit if you are behind on making payments. Vehicular repossession is a common form of repossession, and it may come as a surprise to you that a creditor can simply come and take your car out of your driveway. No matter how much debt you have, you still have rights, and you have the right to pursue a better financial future.