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Bankruptcy can be an ally when it comes to financial challenges

When residents of Chattanooga, Tennessee, hear about a person filing for Chapter 7 bankruptcy, some may think that the person simply has failed to properly manage his or her money. For this reason, personal bankruptcy and debt relief options have negative connotations for many people. However, bankruptcy is not the enemy, because it has the ability to save an individual from mounting credit card bills and even medical debt. Bankruptcy may be an advantage nowadays, considering that the economy remains subject to financial challenges.

It seems that the country's economic financial struggles are here to stay following a study from the Pew Research Center. According to the research, the percentage of Americans who considered themselves to be "middle class" has been decreasing since 2008. The study showed that those who consider themselves the middle class fell from 53 percent to 44 percent, while Americans who thought that they were in the "upper-middle class" declined from 63 percent in 2008 to 55 percent in 2012.

Besides the declining number of middle class Americans, the researchers also discovered that money worries typically affect those who are under the age of 65 and earning $50,000 or less per year. Additionally, many Americans are more concerned with their medical bills than with any student loan debts. One expert said that anyone diagnosed with a chronic illness has expensive medical bills and this circumstance may put a person's job in jeopardy, which, in turn, results in the accrual of more expenses and debts.

However, every problem has a solution. When it comes to medical debts and other unsecured debts in Tennessee, Chapter 7 bankruptcy may relieve the debtor from the stress and anxiety of these financial challenges. The liquidation process in bankruptcy may put a person's assets up for sale, with these proceeds being used to repay the debts to the extent possible. More importantly, certain amounts and types of the debtor's property, including his or her personal property, may be exempt from the sale. And once an individual is relieved of this financial stress, a fresh financial start may be possible.

Source: Fox Business, "The Middle Class is Shrinking, and Medical Bills are Keeping Us Up at Night," Kate Rogers, April 3, 2014

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

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