Chattanooga Bankruptcy Law Blog

Tennessee residents use the bankruptcy process to alleviate burdensome and sometimes overwhelming debts that they accumulate over time. For individuals who earn steady incomes, Chapter 13 bankruptcy can be a useful tool. It allows debtors to create repayment plans through which they identify their debts and creditors, then reorganize the way that they spend their income so that they can, over time, repay the money that they owe to others.

When a repayment plan is completed the debtor may receive their discharge. A bankruptcy discharge not only releases a debtor from their obligations to the creditors who were included in their repayment plan, but also prevents those creditors from pursuing the debtor for the same debts that were included in the plan. It allows a debtor to move past their debts and to start their financial future on more solid footing.

Tennessee residents who have health insurance may be familiar with the concept of "in-network providers." If a doctor, hospital, or medical office is in-network, then that provider has a contractual relationship with the patient's insurance carrier. Insurance companies often prefer their customers to see in-network providers because it makes assessing insurance coverage and payments more streamlined.

However, in cases of emergencies, individuals may find themselves receiving treatment from out-of-network medical providers. If a person sees an out-of-network provider, then their insurer may not cover any or all of their medical bills. This can leave patients with incredible medical expenses that can quickly become medical debt if they cannot pay it off.

Before a person files for bankruptcy, they must take the time to get organized and collect the necessary documents to provide to the bankruptcy court. Tennessee residents who wish to use Chapter 13 bankruptcy to get out from under overwhelming debt should be prepared to offer extensive documentation of their finances, both positive and negative, as well as information on the parties to whom they owe money.

For example, a person pursuing Chapter 13 bankruptcy will have to give the bankruptcy court schedules that outline their sources of income and the expenses they have, as well as the assets that they possess and the debts or liabilities that they carry. They will have to prove that they have completed a credit counseling requirement and also show any prospective raises or increases in income that they may experience in the future.

Last week's post on the challenges young people face to pay off their medical debt is a good reminder to readers of this Tennessee bankruptcy and debt relief blog that financial hardship is a problem that anyone can experience. It is a mistake to believe that debt is only something that grows over time and afflicts those who fail to use financial caution in the youth: from young adults to retirees, debt is a hardship that can cause problems for individuals of all ages.

The loans and advances on credit that individuals take as young adults can, if not paid off in a timely manner, become issues that they must attempt to overcome even before they have truly started their careers and established their financial footing in the world. Just as bad investments and unexpected life changes may cause economic problems for older adults, men and women just starting out in the world can find themselves struggling to keep their heads above water when money problems strike.