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Chattanooga Bankruptcy Law Blog

Why was my Chapter 7 bankruptcy discharge denied?

Debtors file for bankruptcy in order to achieve the elimination of their outstanding financial obligations. This is known as a discharge, and whether a Tennessee resident pursues Chapter 7 bankruptcy or Chapter 13 bankruptcy their goal is essentially the same: have the court approve the repayment of their debts and release them from their financial binds.

However, not all Chapter 7 debtors get a discharge at the end of their bankruptcy proceedings. There are a number of reasons that courts may use to justify the denial of debtors' discharges. This post will explore a few of those reasons and readers are reminded that they should discuss their cases with their own bankruptcy attorneys.

Credit CARD Act requires creditors to disclose vital information

For most people, credit card bills become due once every month. A Tennessee resident may be able to pay off the entire balance of their credit card bill and bring their outstanding obligation down to zero. Another person may not have the savings to pay their bill in full and may only be able to pay off the minimum of what their creditor says they owe.

Paying only the minimum due on a credit card can cause an individual to slide into steep credit card debt. This is because as a person accumulates a growing balance on their card their lender may apply to that balance a monthly interest payment that may balloon a modest balance into an overwhelming financial burden. Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, also known as the CARD Act, creditors are required to inform their card holders of when their payments are due, the types of fees that may be applied to their balances, and any changes that the lenders may make with regard to the interest rates that are applicable to borrowers' balances.

Small medical debts get sent to collections

Often when readers of this Tennessee debt relief and bankruptcy blog think of medical debt they imagine the massive, crippling obligations that they hear about when insurers fail to cover the necessary procedures their customers require. A patient can incur hundreds of thousands of dollars of debt if they suffer an illness or injury that their insurer does not or chooses not to cover, if they must spend extended periods of time in the hospital, or for other medical emergencies. However, a recent article suggests that many of the medical debts that Americans carry are not massive but actually relatively modest.

According to data from 2016, more than half of all medical debts that were sent to collection agencies were for less than $600. While $600 is not an insignificant sum, it is not a figure that most people would consider crippling to their finances. Once a small medical debt is sent to collections, though, a person can begin to experience big problems.

Debt and bankruptcy are problems for seniors

It is a common misconception that a person's financial health will always improve over time. The idea behind this belief is that as time goes on a person will contribute more and more to their savings, their retirement nest egg will grow, and they will eventually be able to stop working and enjoy the remaining decades of their life in financial comfort. A recent report by the Consumer Bankruptcy Project suggests that this is not the case.

In Tennessee and the other states of the nation, older Americans are suffering financial perils at an alarming rate. There are many reasons that financial troubles are hitting this population. For example, the incredible costs of getting medical care and paying for one's own health insurance can cripple a person who otherwise prepared for their retirement years.

Understanding the realities of a Chapter 7 bankruptcy

Chapter 7 bankruptcy is a liquidations process, which means that a debtor must sell some of their property in order to have money to use to repay their creditors. It can be an exhausting and emotional experience for a Tennessee resident, and before going down the Chapter 7 path it is wise for individuals to know what they are getting into when they decide to file their bankruptcy paperwork. This post will discuss some of the advantages and drawbacks of the Chapter 7 process but readers are reminded that its contents are not exhaustive nor are they offered as legal advice.

Chapter 7 bankruptcy can be a relatively fast process. From start to finish many individuals receive their discharge in under six months. This can be an incredible benefit to those who have been fighting their debt for many years.

What happens if my co-debtor files for bankruptcy?

It is not uncommon for Tennessee residents to take out loans for the items they wish to purchase. An individual may elect to secure a mortgage so that they can move their family into a home, or a person may finance their vehicle with a multi-year loan. Sometimes they get loans with other people, such as their family members or friends.

The type of loan that the individuals have secured can influence how the question posed in the title of this post is answered. Additionally, the form of bankruptcy that a person elects to file for may have an impact on how the loan is treated by creditors.

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.

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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