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Chattanooga Bankruptcy Law Blog

Overcoming credit card debt for a brighter financial future

When a Chattanooga resident secures a new credit card they are provided with a wealth of information about how the card may be used and how fees and other costs may attach to the user's account. They are told what their card limit is and how much interest they will be assessed if they fail to make full payments on their monthly account balances. This information is important and can have a significant impact on the card holder's financial health if credit card debt becomes an issue.

For example, if a credit card holder takes their spending limit up to the maximum of their account and cannot pay off the full balance, they may see their next month's bill grow as interest and fees are assessed against their balance. Even if they keep making the minimum payments on their card their balance may not change or may even get bigger and more fees and more costs are assessed against them.

Millennials are struggling to pay off their medical debt

Young adults are often considered to be part of the "Millennial" generation, a stretch of years that begins in the early 1980's and ends in the mid-1990's. Those born during this decade-and-a-half of time were brought up in the tech era and are generally well-versed in emerging electronics, social media and political change. They are also a group of people who are struggling to make ends meet and to pay down their debts.

A new study has suggested that contrary to what many may believe, it is the Millennial generation and not the Baby Boomer generation that is carrying the heaviest medical debt. Baby Boomers are those born in the two decades after the end of the Second World War and are now reaching their sixties and seventies. It may be common to assume that these aging individuals would be struggling more with their medical bills than young and presumably healthy people, but this is not the case.

Advantages of the Chapter 13 bankruptcy process

This post is included on this Tennessee bankruptcy and debt relief blog to offer readers with an informative overview of some of the ways Chapter 13 bankruptcy may serve their financial needs. It is not intended to state that Chapter 13 bankruptcy is superior to Chapter 7 bankruptcy or that it is always a better choice. All readers should seek their own legal guidance when making a decision about what form of bankruptcy to pursue for their own financial needs.

When a person elects to use Chapter 13 bankruptcy they may experience some benefits that they did not expect. One advantage that Chapter 13 bankruptcy has over Chapter 7 bankruptcy is the length of time that it will linger on the debtor's credit report. Generally, a Chapter 13 bankruptcy will stay on a person's credit report for 7 years while a Chapter 7 bankruptcy will stay on for a full decade. Those three years can be significant in terms of a debtor rebuilding their credit and securing financing for a home, car and other needs.

What does foreclosure have to do with a home?

One of the biggest assets that a Tennessee resident may work toward owning is their own home. Buying a house where a person can live with their spouse and raise a family is a huge financial step for anyone who has struggled to pay their bills and save enough to make a down payment. Just getting into the housing market can seem like a major battle for some people; once in, though, homeowners face many challenges, some of which may threaten their rights to continue to own their properties.

Most people cannot buy real estate outright, and as such they secure mortgages to buy their homes. A mortgage is a loan for the purchase of a home and once a mortgage is approved a person generally must pay a certain sum of money to their mortgage holder each month in order to pay off the outstanding sum.

Emergency room costs soar, may lead to medical debt

When accidents happen and Tennessee residents cannot wait to see their regular doctors, they may need to make trips to the emergency room to have their ailments treated in a timely manner. These trips are usually reserved for situations in which there are no other options and holding off on medical assessment may be detrimental to the suffering individual. However, recent reports indicate that emergency room visits across the country are being charged at much higher rates than they were just a decade ago.

This is because medical centers are tacking on "facility fees" that are generally charged to clients just because they walked in the doors of the emergency room. Even if patients use in-network providers and have insurance for the medical needs, they may still receive medical bills in the hundreds and even thousands of dollars.

Know your options for a pending business bankruptcy

Recently a major American retailer shut its doors and ceased operations at its stores throughout the nation. Toys "R" Us had been in business for decades before attempting to use bankruptcy to revitalize its sagging bottom line and save itself from extinction. However, any Tennessee resident who has tried to visit one of the company's stores in the last week would have found that all retail centers for the former megastore are now closed.

Toys "R" Us elected to file for Chapter 11 bankruptcy, the path many businesses use to reorganize their debts and to restructure the means through which they will pay those debts off. It failed, however, and ultimately the company had to resort to Chapter 7 bankruptcy. Chapter 7 bankruptcy operates for businesses the way it operates for private consumers; the debtor's assets are sold off and creditors are repaid with the proceeds of the liquidation.

Why didn't Chapter 7 bankruptcy eliminate all of my debts?

The goal of any bankruptcy process is for a debtor to emerge from the process without the burdensome debts they carried prior to filing for bankruptcy protection. Whether they file for Chapter 13 bankruptcy and develop a repayment plan to satisfy their creditors or Chapter 7 and use liquidation to pay down their obligations, debtors hope to attain discharge and find financial freedom.

A Tennessee resident may find, however, that after attaining discharge through the Chapter 7 bankruptcy process certain debts still exist as obligations for them. While Chapter 7 bankruptcy does grant a debtor a wide range of support to eliminate certain obligations, others live through the process and remain the responsibility of the individual who filed for Chapter 7.

What to consider before filing for bankruptcy protection

It can be hard to admit when a person has lost control of their finances. An emergency or unexpected event can throw a wrench into a person's plans and destroy their savings in a heartbeat, or over time a person may slowly erode their nest egg due to bad investments and spending choices. However a Tennessee resident finds themselves in the difficult place of considering bankruptcy, there are a number of topics they should evaluate before deciding to jump into the process.

First, before a person elects to file for bankruptcy, they should be sure that there are no other ways that they could alleviate their financial woes. For example, if making changes to their spending habits or moving money into more secure accounts could help them dig their way back "into the black" without bankruptcy, it may be more effective for those options to be exercised in lieu of bankruptcy.

What happens after a Chapter 13 bankruptcy discharge?

Seeking financial freedom through bankruptcy is a big step that many Tennessee residents decide to take to improve their economic standing. Most individuals elect to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, two different processes that are available to individuals through different qualifying requirements. In the end, however, individuals who file for either form of bankruptcy hope to arrive at the process's terminal event: debt discharge.

If a debtor reaches discharge through bankruptcy, it means that their qualifying debts have been eliminated. Our readers should note that not all of a person's debts may be eliminated through discharge. In Chapter 13 bankruptcy, a number of different types of debts and loans may survive and may continue to be the responsibility of the party who received discharge.

Important terms for understanding debt

Not long ago, a popular consumer website surveyed individuals who carry student loan debt. The survey asked participants to recognize certain terms associated with debt and, surprisingly, more than 9 out of 10 of the participants failed the questionnaire. What this means is that many Tennessee residents who incur debts do so without fully understanding the terms and associated conditions that go along with their repayment.

For example, when acquiring a debt, a person should know what the principal is. Generally, the principal is the base value of a loan. If a person borrows $10,000 to buy a car, then the principal amount of their loan would be $10,000.

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

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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