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Chattanooga Bankruptcy Law Blog

Credit card debt is a national problem

From Seattle to the District of Columbia, Detroit to San Antonio, Americans from all parts of the nation struggle with credit card debt. This fact may not offer Tennessee residents fighting with the burdens of high credit card balances and interest rates a lot of solace, but it should let them recognize that their problems are not unique. Credit cards can be important financial tools for many but can also lead some down the path of financial ruin.

According to data released by the Federal Reserve, the sum of credit card debt carried by Americans is around $1 trillion. Across some of the biggest metropolitan areas in the nation, the amount of debt that individuals carry with them is in excess of $5,000. Credit card debt of that magnitude can take years to pay off if a person does not earn enough income to make more than their expected minimum payments, particularly when they are subject to a high interest rate.

Chapter 13 bankruptcy may be a viable path to financial solvency

When a Hamilton resident cannot pay their bills, cannot keep up with the minimum payments on their credit cards and cannot handle the influx of expenses that burden them each day, they may need to consider significant steps toward eliminating their debts. In situations like this where a person has no extra income on which to make a dent into their debt it may be best for them to try to wipe out as many of their financial obligations as possible through the liquidation process of Chapter 7 bankruptcy.

However, if a debtor has a job, earns an income and has some extra money with which they may begin to pay down their debts, Chapter 13 bankruptcy may be a better option. In Chapter 13 a debtor is allowed to keep more property and use the reorganization of their income to repay their creditors over time.

What is the means test under Chapter 7 bankruptcy?

Last week, this Tennessee bankruptcy blog discussed some of the reasons that a person may not be able to pursue Chapter 13 bankruptcy. This week's post will focus on one of the major requirements a debtor must pass in order to be eligible to file for Chapter 7 bankruptcy: the means test.

Also known as liquidation bankruptcy, Chapter 7 bankruptcy involves the selling off of a debtor's property to raise money to use to satisfy the debtor's creditors. Before a debtor may begin liquidating what they own, though, they must pass the means test. The first part of the means test involves comparing the debtor's income to the median income of their state.

Not everyone will qualify for Chapter 13 bankruptcy

A common misconception may exist in the minds of some Tennessee residents regarding the bankruptcy process. That misconception relates to the ability of an individual to file for protections under the bankruptcy process. While in some situations it may be true that a person can file for some form of bankruptcy, because the different types of bankruptcy employ different requirements, that person may not qualify for all forms of bankruptcy.

This post will look into the requirements that a person must meet in order to file for Chapter 13 bankruptcy. While this post does provide useful information for individuals who may want to pursue this form of bankruptcy, it should not be read as legal advice. A bankruptcy attorney is a good resource for any reader who needs help getting their own bankruptcy filing underway.

Ways to manage holiday spending debt

According to a recent survey Americans complied more than $1,000 per shopper in debt over the holidays and most of those individuals did not plan to incur debts from their winter-month purchases. Chattanooga residents who are suffering from this financial crush should know that there are some debt relief strategies that they may employ on their own before they begin exploring other legal options for getting out from under their financial burdens.

For example, a holiday credit card debtor may want to see if their credit card rewards program may allow them to swap their rewards earnings in for credits on their account. Some cards, such as those that offer airline miles, let consumers trade in their mile credits for money that may be applied to their balances.

How can I avoid credit card debt?

The New Year has arrived, and by now, some Tennessee residents may be finding that their good intentions to stick to their resolutions have begun to fade. While many may have tried to commit to healthier lifestyles, others may have prioritized getting their financial health back on track. One of the most challenging things to do is to manage one's spending when credit cards are available.

Spending on a credit card is easy because the spender does not see their money leave their account. It is a simple transaction made even easier buy online shopping and smart phone apps that enable easy purchasing without shoppers ever having to reach for their wallets. While this post offers no legal or financial advice the remainder of it will discuss some ways that individuals may cut into their credit card debt as the 2018 progresses.

What is the automatic stay in a bankruptcy proceeding?

Though few Tennessee residents ever want to file for bankruptcy, many are able to turn their financial fortunes around through this legal process. Whether they liquidate assets to repay creditors through Chapter 7 bankruptcy or reorganize their monthly payments through Chapter 13 bankruptcy, many experience the benefits of the process before it is even complete. One of those benefits is the automatic stay which will be the topic of discussion for this blog post.

After a debtor has filed for bankruptcy the automatic stay kicks in. It essentially stops creditors from their efforts to collect on their debts. It prevents utility companies from cutting off an unpaying debtor's water, gas and electricity, and it stops foreclosures wherever they are in the process.

Is individual bankruptcy right for you?

Not long ago this Tennessee-based bankruptcy and debt relief blog discussed a trend in consumer bankruptcy filings.

Although fewer people are pursuing bankruptcy to alleviate their personal debts, the legal process is still a very common option for individuals who need help taking control of their financial futures. Whether through the asset liquidation process of Chapter 7 bankruptcy or the reorganization and repayment plan of Chapter 13 bankruptcy, consumers are continuing to find the protections afforded by the bankruptcy courts to benefit their needs.

Despite decline, many still file for personal bankruptcy

When financial challenges become overwhelming and a Chattanooga resident has few options for improving their money problems on their own, they may turn to personal bankruptcy as a means of getting out from under burdensome debt. Whether through Chapter 7 bankruptcy or Chapter 13 bankruptcy they may be able to establish strong financial footing, and based on data provided by the United States Courts, they would not be alone.

During the 12 months between the start of July of 2016 and the end of June 2017 more than 772,000 non-businesses filed for bankruptcy. This is a decrease over the 12-month period that preceded it, which saw a filing figure of 793,932 for non-business entities.

What rights does the Fair Debt Collection Practices Act afford?

Accumulating seemingly insurmountable debt can be a terrifying event for a Chattanooga resident. Not only does the individual feel crushed by the massive weight of financial responsibility that has collected on their shoulders, but they may also experience one of the most frustrating aspects of debt that Americans can experience: harassment from debt collectors and collection agencies.

Harassment from debt collectors can be abusive and damaging. While entities that seek to collect on debts may make some permissible contacts with debtors, the Fair Debt Collection Practices Act (FDCPA) places significant limits on what is considered acceptable contact. This post will discuss some of the ways that consumer debtors may be protected from creditor harassment under the FDCPA but readers are cautioned that the information contained herein is neither comprehensive not intended to be read as legal advice.

Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
Phone: 423-624-4002
Fax: 423-624-0509
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