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What Is a No-Asset Bankruptcy Case In Tennessee?

Tue, 21 Apr 2026 21:10:51 GMT

What Is a No-Asset Bankruptcy Case In Tennessee?

Filing for bankruptcy can be a stressful and uncertain process, especially if you are unsure what will happen to your property. One term that often comes up during bankruptcy proceedings is a “no-asset case.” Understanding what this means can help you feel more confident about your financial future and your legal options in Tennessee.

At Kenneth C. Rannick P.C., we provide legal assistance to the Chattanooga public and help individuals navigate the bankruptcy process with clarity and confidence.

Understanding a No-Asset Bankruptcy Case

A no-asset bankruptcy case typically occurs in a Chapter 7 bankruptcy. It means that, after reviewing your financial situation, the bankruptcy trustee determines that you do not own any non-exempt property that can be sold to repay creditors.

In other words, your assets are either protected by Tennessee’s exemption laws or are of little to no value for liquidation. As a result, creditors will not receive payments from the sale of your property.

How Chapter 7 Bankruptcy Works

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy.” The process involves:

Filing a petition with the bankruptcy court
Listing your assets, debts, income, and expenses
Allowing a trustee to review your financial situation

If the trustee finds non-exempt assets, they may sell them to repay creditors. However, in a no-asset case, there is nothing available for liquidation, and the process moves forward without distributing funds to creditors.

What Property Is Protected in Tennessee?

Tennessee law provides certain exemptions that allow you to keep essential property during bankruptcy. These may include:

A portion of your home equity (homestead exemption)
Personal property such as household goods and clothing
Certain retirement accounts
Tools of your trade

If all of your property falls within these exemptions, your case will likely be classified as a no-asset case.

What Happens to Your Debts?

In a no-asset Chapter 7 bankruptcy case, most unsecured debts—such as credit card balances, medical bills, and personal loans—may be discharged. This means you are no longer legally required to repay them.

However, not all debts are dischargeable. Obligations such as child support, alimony, most student loans, and certain taxes may still need to be paid.

Do Creditors Receive Notice?

Yes. Even in a no-asset case, creditors are notified of your bankruptcy filing. However, they are also informed that there are no assets available for distribution, so they typically do not file claims.

If the trustee later discovers assets, creditors may be given an opportunity to file claims at that time.

Benefits of a No-Asset Bankruptcy Case

A no-asset case can offer several advantages:

You keep your protected property
The process is often faster and less complicated
You can eliminate qualifying unsecured debts
There is no need to deal with asset liquidation

For many individuals, this type of case provides a fresh financial start without losing essential belongings.

Is a No-Asset Case Right for You?

Whether your bankruptcy case will be considered a no-asset case depends on your financial situation, the type of property you own, and how Tennessee exemption laws apply to you.

Working with a knowledgeable attorney can help ensure your case is properly prepared and that you take full advantage of available protections.

At Kenneth C. Rannick P.C., we assist Chattanooga residents in evaluating their options and guiding them through every step of the bankruptcy process.

Bankruptcy for Single Parents: How It Can Help You Regain Stability

Sat, 28 Mar 2026 04:00:22 GMT

Bankruptcy for Single Parents: How It Can Help You Regain Stability

Raising children as a single parent often means juggling limited income, rising living costs, and unexpected expenses. When debt becomes overwhelming, it can feel impossible to stay afloat. Bankruptcy is a legal option that may help single parents reset their finances and regain stability. For families in Chattanooga, understanding how bankruptcy works can be the first step toward a more manageable financial future. At Kenneth C. Rannick P.C. , we provide legal assistance to the Chattanooga public and help individuals explore solutions that fit their circumstances.

The Financial Challenges Single Parents Often Face

Single parents frequently rely on one income while covering housing, childcare, healthcare, and daily living expenses. A job loss, medical emergency, or reduction in child support can quickly lead to mounting debt. Credit cards, personal loans, and past-due bills can pile up, creating constant stress and making it difficult to focus on providing for your children.

How Bankruptcy Can Provide Relief

Bankruptcy is designed to give individuals a chance to address debt in a structured and lawful way. For single parents, it can stop collection efforts, halt wage garnishments, and pause foreclosure or repossession actions. This immediate relief can free up income needed for essential household expenses and childcare.

Chapter 7 Bankruptcy for Single Parents

Chapter 7 bankruptcy may be an option for single parents with limited income and significant unsecured debt, such as credit cards or medical bills. In many cases, these debts can be discharged, meaning you are no longer legally required to pay them. Tennessee exemptions may allow you to protect certain assets, helping you maintain basic stability for your family.

Chapter 13 Bankruptcy and Income-Based Repayment

For single parents who earn regular income and want to keep property like a home or vehicle, Chapter 13 bankruptcy may be appropriate. This option involves a court-approved repayment plan that lasts three to five years. Payments are based on your income and expenses, which can make debt repayment more manageable while allowing you to catch up on missed payments over time.

Protecting Your Family’s Future

Filing for bankruptcy is not about failure; it is about creating a path forward. For single parents, it can mean less financial pressure, fewer collection calls, and a clearer plan for managing money. By addressing debt, you can focus more on your children’s well-being and long-term financial security.

Getting Legal Guidance in Chattanooga

Every family’s situation is different, and bankruptcy laws can be complex. Working with a knowledgeable attorney can help you understand which option may work best for you and what to expect throughout the process. At Kenneth C. Rannick P.C. , we assist single parents in Chattanooga with navigating bankruptcy and taking steps toward renewed financial stability.

How Bankruptcy Can Help Seniors Facing Mounting Debt

Sat, 28 Feb 2026 05:00:52 GMT

How Bankruptcy Can Help Seniors Facing Mounting Debt

Many seniors in Chattanooga find themselves struggling with growing debt later in life. Fixed incomes, rising medical expenses, and unexpected financial setbacks can make it difficult to keep up with bills. For older adults facing these challenges, bankruptcy may offer a practical way to regain financial stability and reduce stress. Understanding how bankruptcy works can help seniors make informed decisions about their financial future.

Common Causes of Debt Among Seniors

Seniors often accumulate debt for reasons beyond their control. Medical bills not fully covered by Medicare, prescription costs, and long-term care expenses can quickly add up. Some seniors also carry credit card balances, personal loans, or mortgage debt that becomes harder to manage after retirement. In some cases, helping adult children or grandchildren financially can also contribute to mounting debt.

Why Bankruptcy Can Be a Helpful Option

Bankruptcy is designed to give individuals relief from overwhelming debt while offering a path forward. For seniors, it can eliminate or reduce unsecured debts such as credit cards and medical bills, which often cause the most financial strain. Bankruptcy can also stop collection efforts, including harassing phone calls, wage garnishments, and lawsuits, providing immediate relief.

Chapter 7 Bankruptcy and Seniors

Chapter 7 bankruptcy is often a suitable option for seniors living on limited income. This type of bankruptcy can discharge many unsecured debts within a relatively short period. Many seniors are able to protect essential assets through exemptions, including retirement accounts and certain personal property, allowing them to maintain their quality of life while addressing debt.

Chapter 13 Bankruptcy for Ongoing Income

For seniors who still have regular income, such as Social Security combined with part-time work or pensions, Chapter 13 bankruptcy may be an option. Chapter 13 involves a repayment plan that allows individuals to catch up on missed payments over time while keeping valuable assets like a home or vehicle. This approach can be helpful for seniors who want to avoid foreclosure or repossession.

Protecting Social Security and Retirement Income

One common concern among seniors is whether bankruptcy will affect Social Security or retirement benefits. In most cases, Social Security income is protected from creditors, and retirement accounts such as 401(k)s and IRAs are often exempt. Bankruptcy can actually help safeguard these income sources by eliminating debts that threaten overall financial security.

Gaining Peace of Mind and a Fresh Start

Beyond the financial benefits, bankruptcy can provide emotional relief. Constant worry about bills and creditors can take a toll on health and well-being. By addressing debt through bankruptcy, seniors can focus on enjoying retirement with fewer financial pressures and a clearer path forward.

At Kenneth C. Rannick P.C., we can provide legal assistance to the Chattanooga public and help seniors understand whether bankruptcy may be a helpful solution for their financial situation.

How Chapter 13 Bankruptcy Can Help You Catch Up on Mortgage Payments

Fri, 30 Jan 2026 15:48:52 GMT

How Chapter 13 Bankruptcy Can Help You Catch Up on Mortgage Payments

Falling behind on mortgage payments can be overwhelming, especially when the risk of foreclosure becomes real. For many homeowners in Chattanooga, Chapter 13 bankruptcy offers a structured way to regain control, catch up on missed payments, and keep their homes. At

Kenneth C. Rannick P.C., we provide legal assistance to individuals and families navigating these difficult financial situations.

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often called a “reorganization” bankruptcy. Instead of wiping out debts entirely, it allows individuals with regular income to create a court-approved repayment plan that lasts three to five years. This plan consolidates certain debts into manageable monthly payments based on what the filer can reasonably afford.

For homeowners, Chapter 13 can be especially valuable because it provides tools that directly address mortgage arrears while allowing you to continue making regular mortgage payments going forward.

How Chapter 13 Stops Foreclosure

One of the immediate benefits of filing for Chapter 13 bankruptcy is the automatic stay. This court order goes into effect as soon as the case is filed and temporarily stops foreclosure proceedings, collection calls, and other creditor actions.

The automatic stay gives homeowners breathing room. It pauses foreclosure long enough to propose a repayment plan that includes past-due mortgage payments, creating an opportunity to catch up instead of losing the home.

Catching Up on Missed Mortgage Payments

Under a Chapter 13 repayment plan, missed mortgage payments—also known as arrears—can be spread out over the life of the plan. Rather than paying the full past-due amount all at once, you make monthly plan payments that gradually bring your mortgage current.

At the same time, you continue making your regular mortgage payments going forward. This two-track approach allows many homeowners to stabilize their finances and avoid foreclosure.

Dealing With Fees and Penalties

When mortgage payments fall behind, late fees, penalties, and legal costs can quickly add up. Chapter 13 can help manage these additional charges by incorporating them into the repayment plan. In some cases, certain penalties may be reduced or eliminated, making it easier to catch up without falling further behind.

When Chapter 13 May Be a Good Option

Chapter 13 bankruptcy may be a good fit if you have fallen behind on mortgage payments but now have steady income to support a repayment plan. It can also help if you are facing foreclosure, juggling other debts, or need time to reorganize your finances while keeping your home.

Every financial situation is different, and eligibility depends on several factors, including income, debt limits, and the type of mortgage involved.

Getting Help With Chapter 13 in Chattanooga

Navigating Chapter 13 bankruptcy involves detailed paperwork, strict deadlines, and ongoing obligations. Having legal guidance can help ensure that your repayment plan is properly structured and that your rights as a homeowner are protected.

At Kenneth C. Rannick P.C., we provide legal assistance to the Chattanooga public, helping individuals understand their options and take informed steps toward financial stability.

Can I File Bankruptcy in Chattanooga Without My Spouse?

Mon, 29 Dec 2025 19:46:54 GMT

Can I File Bankruptcy in Chattanooga Without My Spouse?

If you are considering bankruptcy in Chattanooga but want to file without involving your spouse, you are not alone. Many married individuals wonder whether they can seek financial relief independently—especially when only one spouse is responsible for the debt. The good news: in many situations, you can file for bankruptcy in Tennessee without your spouse. However, doing so comes with important considerations that may affect your household financially.

At Kenneth C. Rannick P.C., we assist individuals throughout Chattanooga in understanding their bankruptcy options and making informed decisions that protect their future.

Can You File Bankruptcy Alone While Married?

Yes. Tennessee law allows one spouse to file bankruptcy individually. This is known as a "single-filer bankruptcy." Your spouse is not required to file with you, nor does your filing automatically affect their credit.

However, bankruptcy courts consider your overall household financial picture. This means that even if your spouse is not filing, their income may still be relevant.

How Household Income Affects Your Case

When filing Chapter 7 or Chapter 13, you must complete the "means test," which reviews your household income to determine eligibility.

Even when filing alone, the court typically requires disclosure of:

Your spouse’s income
Household expenses
Shared assets

If your spouse contributes significantly to household expenses, the court may apply a “marital adjustment,” allowing you to subtract amounts your spouse spends on their own separate obligations.

What Happens to Your Spouse’s Credit?

If the debts are solely in your name, your spouse’s credit should not be affected by your bankruptcy filing.

However, your bankruptcy can impact your spouse if:

They are a co-signer on any loans
You have joint credit cards or lines of credit
You share jointly owned property that creditors could reach

If any debt is jointly held, your spouse may still be responsible for the balance even after your bankruptcy discharge.

How Filing Alone Differs in Chapter 7 vs. Chapter 13

Chapter 7

Allows discharge of many unsecured debts
Marital income might affect eligibility
Joint property may be subject to review

Chapter 13

Establishes a structured repayment plan
Household income affects the payment amount
May protect jointly owned assets more effectively

Many married individuals choose Chapter 13 if they want to preserve marital property or shield a non-filing spouse from potential financial complications.

When Filing Alone May Be Beneficial

You may prefer to file individually if:

Most debts are in your name only
Your spouse has strong credit you want to protect
You plan to qualify for bankruptcy without their income
Your spouse does not want to be part of the court process

A single filing helps you find relief while keeping your spouse outside the legal proceeding.

Speak With a Chattanooga Bankruptcy Attorney

Bankruptcy laws are detailed, and the impact on married households can be complex. At Kenneth C. Rannick P.C., we help Chattanooga residents understand whether filing alone or jointly is the right choice for them.

Can I File for Bankruptcy More Than Once in Tennessee?

Fri, 21 Nov 2025 19:41:32 GMT

Can I File for Bankruptcy More Than Once in Tennessee?

Filing for bankruptcy can offer much-needed financial relief, but many people wonder what happens if financial struggles return later. In Tennessee, you can file for bankruptcy more than once—but important rules determine when and how often you are eligible. Understanding these timelines can help you make informed decisions about your debt relief options.

At Kenneth C. Rannick P.C. , we assist the Chattanooga community with guidance through the bankruptcy process so individuals can make confident, informed choices.

You Can File Bankruptcy More Than Once—But Timing Matters

Bankruptcy laws allow multiple filings, but there are required waiting periods between discharges depending on the type of bankruptcy you previously received.

Filing Chapter 7 Again

If you previously received a Chapter 7 discharge, you must wait:

Eight years from the date of your previous Chapter 7 filing to file another Chapter 7.

Filing Chapter 13 Again

If you previously received a Chapter 13 discharge, you must wait:

Two years from the date of your previous Chapter 13 filing to file another Chapter 13.

Filing Chapter 7 After Chapter 13

If your previous case was Chapter 13, you must wait:

Six years before filing for Chapter 7, unless you paid at least 70% of your unsecured debts during the Chapter 13 plan.

Filing Chapter 13 After Chapter 7

If your previous case was Chapter 7, you must wait:

Four years before filing for Chapter 13.

These timelines apply only to receiving a discharge. You may be able to file sooner, but you will not qualify for a new discharge unless you meet the required waiting period.

Why Someone Might File Bankruptcy More Than Once

Life can bring unexpected financial setbacks. Common reasons people file again include:

Job loss or reduced income
Medical bills
Divorce or separation
Unexpected expenses
New debt accumulated after a prior discharge

Bankruptcy is designed to give people a fresh start, even if new challenges arise.

When Filing Again May Be Beneficial

A repeat filing may help when:

You need immediate protection from creditors
Wage garnishment has restarted
You are behind on a mortgage and need time to catch up
Your previous case was dismissed before discharge

Even without receiving a discharge, a Chapter 13 filing can provide repayment structure and creditor protection.

Speak With a Tennessee Bankruptcy Attorney Before Filing Again

Multiple filings can be complicated, and the right choice depends on your past bankruptcy history and current financial situation. An attorney can tell you:

Whether you are eligible for a new discharge
Whether Chapter 7 or Chapter 13 makes more sense now
How a new filing will impact your assets and credit
Whether an alternative solution might work better

At Kenneth C. Rannick P.C. , we help individuals in Chattanooga understand their rights and options so they can move forward with confidence.

Filing for Bankruptcy While Unemployed in Tennessee: Is It a Good Idea?

Tue, 14 Oct 2025 15:44:38 GMT

Filing for Bankruptcy While Unemployed in Tennessee: Is It a Good Idea?

Financial hardships can strike unexpectedly, especially when you’re out of work. For many unemployed individuals in Tennessee, mounting debt can quickly become overwhelming. One possible solution is bankruptcy—but is it the right choice when you’re unemployed? Understanding how your employment status affects bankruptcy can help you make an informed decision.

How Unemployment Affects Bankruptcy Eligibility

Being unemployed does not disqualify you from filing for bankruptcy in Tennessee. In fact, many individuals file precisely because they’ve lost their income and cannot keep up with bills. There are two main types of personal bankruptcy:

Chapter 7 Bankruptcy: This option is typically for people with little or no disposable income. Because unemployment often means reduced or no income, you may qualify more easily for Chapter 7, which can eliminate most unsecured debts such as credit cards and medical bills.
Chapter 13 Bankruptcy: If you’re receiving unemployment benefits or other income sources, you may be able to file under Chapter 13, which allows you to reorganize and repay part of your debts over three to five years.

The Benefits and Drawbacks of Filing While Unemployed

Filing for bankruptcy while unemployed can give you immediate relief from creditor harassment and collection actions. The automatic stay stops lawsuits, wage garnishments, and collection calls. However, there are considerations to keep in mind:

If you expect to find a new job soon, your future income could affect your eligibility for Chapter 7.
Filing too early could mean missing out on using bankruptcy to manage newer debts that might arise while you’re still unemployed.
You may risk losing certain nonessential assets depending on the type of bankruptcy you file.

Get Professional Guidance Before Filing

Bankruptcy can provide a crucial fresh start, but timing and financial strategy are key. Speaking with an attorney can help determine whether now is the best time to file and which chapter best suits your circumstances.

At Kenneth C. Rannick P.C. , we can provide legal assistance to the Chattanooga public. Our firm helps clients understand their options, protect their assets, and move toward financial stability.

How Bankruptcy Affects Joint Accounts and Co-Signers in Tennessee

Tue, 16 Sep 2025 20:42:12 GMT

How Bankruptcy Affects Joint Accounts and Co-Signers in Tennessee

Filing for bankruptcy is a major decision that impacts not only your financial future but also the people connected to you through joint accounts or co-signed loans. In Tennessee, understanding how bankruptcy affects these relationships is critical for protecting both your assets and your loved ones.

Joint Bank Accounts

When you file for bankruptcy in Tennessee, your assets—including joint bank accounts—are reviewed by the bankruptcy trustee. Even if the account is shared with a spouse, child, or another family member, your portion of the funds may be considered part of your bankruptcy estate. While Tennessee exemptions may allow you to protect some of these funds, the trustee could claim part of the account if it exceeds protected limits. It’s essential to keep accurate records showing which funds belong to you and which belong to the co-owner.

Joint Debts

If you share responsibility for a loan or credit card account with another person, bankruptcy does not erase their obligation to repay it. For example, if you and a spouse jointly signed for a car loan, your bankruptcy may discharge your liability, but the lender can still pursue the co-signer or joint account holder for the remaining balance.

Co-Signers

Co-signers take on financial risk by agreeing to be responsible if you cannot pay. In Chapter 7 bankruptcy, co-signers can still be held liable for the entire debt. However, Chapter 13 bankruptcy offers something called a "co-debtor stay," which temporarily prevents creditors from collecting from co-signers as long as you continue making payments under your repayment plan.

Protecting Loved Ones

If you are considering bankruptcy and are concerned about joint accounts or co-signers, careful planning is key. Reviewing the details of your accounts, your debts, and potential risks to others can help minimize negative consequences.

At Kenneth C. Rannick P.C., we can provide legal assistance to the Chattanooga public. Our firm can guide you through Tennessee’s bankruptcy process and help you understand how to protect your rights while limiting the impact on those who share financial responsibilities with you.

What Happens to Personal Loans and Payday Loans in Tennessee Bankruptcy?

Wed, 13 Aug 2025 19:24:07 GMT

What Happens to Personal Loans and Payday Loans in Tennessee Bankruptcy?

Filing for bankruptcy in Tennessee can provide much-needed relief for individuals struggling with overwhelming debt, including personal loans and payday loans. These types of debts are generally considered unsecured debts , meaning they are not tied to specific collateral like a house or car. Because of this classification, bankruptcy can often help eliminate or significantly reduce them.

 Personal Loans in Bankruptcy

In both Chapter 7 and Chapter 13 bankruptcy, personal loans—whether obtained from a bank, credit union, or online lender—are typically dischargeable.

Chapter 7: Most unsecured personal loans can be wiped out completely, allowing you to start fresh without repayment obligations.
Chapter 13: These debts are included in your repayment plan, and you may end up paying only a fraction of what you owe before the remaining balance is discharged.

Payday Loans in Bankruptcy

Payday loans are also unsecured debts and are usually dischargeable in bankruptcy. However, payday lenders sometimes try to claim fraud if the loan was taken shortly before filing. While this does not automatically prevent discharge, it may require additional legal steps to resolve.

Automatic Stay Protection

When you file for bankruptcy, the court issues an automatic stay , which immediately stops lenders from contacting you, pursuing collection actions, or taking money from your bank account. This protection applies to personal loan lenders, payday loan companies, and all other creditors.

Key Considerations

If you recently took out a payday loan or personal loan, the timing of your bankruptcy filing matters.
Bankruptcy may not erase debts obtained through fraudulent means.
An attorney can review your financial situation to ensure all debts are handled correctly.

At Kenneth C. Rannick P.C. , we help individuals in Chattanooga understand how bankruptcy affects their personal and payday loans, guiding them toward a financial fresh start while protecting their rights throughout the process.

How Bankruptcy Can Stop Harassing Collection Calls

Tue, 15 Jul 2025 14:20:44 GMT

How Bankruptcy Can Stop Harassing Collection Calls

Constant calls from creditors can turn everyday life into a source of stress and anxiety. These calls can disrupt your workday, strain personal relationships, and make it difficult to focus on getting back on your feet financially. Fortunately, filing for bankruptcy can offer immediate relief from creditor harassment.

At Kenneth C. Rannick P.C., we help individuals in Chattanooga understand how bankruptcy can put a stop to collection calls—and give them a path toward financial stability.

How Bankruptcy Stops Creditor Harassment

When you file for bankruptcy, the court issues an automatic stay . This is a powerful legal order that prohibits most creditors from continuing their collection efforts. That means:

Creditors must stop calling you
Lawsuits are generally put on hold
Wage garnishments must stop
Repossession or foreclosure efforts must pause

The automatic stay applies as soon as your bankruptcy petition is filed, whether you’re filing Chapter 7 or Chapter 13. Violating the stay can have serious legal consequences for creditors.

What Types of Debt Are Covered?

Most types of unsecured debts—like credit card balances, medical bills, and personal loans—are covered by the automatic stay. Secured debts like a mortgage or car loan may also be affected, especially if you're filing Chapter 13 and proposing a repayment plan. In both types of cases, bankruptcy provides a structured way to address your debts and regain control.

What If Creditors Keep Calling After Filing?

Once your creditors are notified of your bankruptcy filing (which typically happens quickly), they are legally required to stop all collection activity. If they continue to call or harass you, they may be in violation of the automatic stay and could face penalties. Our office helps clients in Chattanooga hold creditors accountable for these violations.

You Don’t Have to Live in Fear of the Phone

If collection calls are dominating your life, bankruptcy may be the step you need to protect your peace of mind. At Kenneth C. Rannick P.C., we can review your situation and help you understand if bankruptcy is the right option for stopping creditor harassment and getting a fresh start.

What Happens to My Home If I File for Bankruptcy?

Thu, 19 Jun 2025 21:02:02 GMT

What Happens to My Home If I File for Bankruptcy in Tennessee?

Filing for bankruptcy can be a difficult decision, especially when your home is at stake. If you’re considering bankruptcy in Tennessee, understanding how it might impact your home is crucial. At Kenneth C. Rannick, P.C. , we help Chattanooga residents navigate these complex situations and protect what matters most.

Chapter 7 Bankruptcy and Your Home

Chapter 7 bankruptcy is often referred to as "liquidation bankruptcy" because a trustee can sell non-exempt property to pay off creditors. However, Tennessee law allows for homestead exemptions —protections that may let you keep your home.

In Tennessee, the homestead exemption amount varies depending on your circumstances:

$5,000 for a single filer
$7,500 for a married couple filing jointly
$25,000 if you have minor children living with you
Up to $100,000 for individuals over 62 or who are disabled (specific conditions apply)

If your equity in the home is within the exemption limit , and you are current on your mortgage, you may be able to keep your home even in a Chapter 7 bankruptcy. However, if your equity exceeds the exemption or you're behind on payments, the trustee could sell the home to repay creditors.

Chapter 13 Bankruptcy and Your Home

Chapter 13 is a reorganization bankruptcy that allows you to catch up on missed mortgage payments through a 3- to 5-year repayment plan. As long as you continue making mortgage payments and stay current on your bankruptcy plan, you can usually keep your home.

This option is especially beneficial for those who have fallen behind but still want to avoid foreclosure. Chapter 13 also provides more flexibility if your equity exceeds the state exemption limit.

Additional Considerations

Foreclosure proceedings : Filing for bankruptcy triggers an automatic stay , which temporarily halts foreclosure actions.
Second mortgages : In some Chapter 13 cases, you may be able to remove a second mortgage if your home’s value is less than what you owe on your first mortgage.

Talk to a Chattanooga Bankruptcy Attorney

Bankruptcy doesn’t always mean losing your home. With proper planning and guidance, you may be able to protect your most important asset. At Kenneth C. Rannick, P.C. , we are committed to helping individuals in Chattanooga understand their rights and make informed decisions.

Understanding What Debts Are Dischargeable Under Chapter 13 Bankruptcy in Tennessee

Wed, 14 May 2025 16:15:14 GMT

What Debts Are Dischargeable Under Chapter 13 Bankruptcy in Tennessee?

Chapter 13 bankruptcy offers a valuable pathway for Tennessee residents who want to reorganize their debts while keeping their assets. Unlike Chapter 7, which involves liquidating assets to pay creditors, Chapter 13 allows you to set up a repayment plan—typically lasting three to five years—based on your income and ability to pay. Once the repayment period ends and all obligations have been met, you may be eligible for a discharge of remaining debts.

At Kenneth C. Rannick P.C. , we assist Chattanooga residents in understanding how Chapter 13 can help them achieve financial stability. Here’s what you need to know about which debts may be discharged under Chapter 13 in Tennessee.

Common Dischargeable Debts in Chapter 13

Under Chapter 13, many unsecured debts can be discharged once the repayment plan is completed. These typically include:

Credit card debt
Balances, late fees, and penalties can be wiped out after your plan is completed.
Medical bills
Outstanding balances from doctors, hospitals, or clinics are often dischargeable.
Personal loans
Unsecured loans from banks or other lenders can be included in your discharge.
Past-due utility bills
Old balances for electricity, water, or gas services may be discharged.
Older tax debts
Some income tax debts may qualify if they meet specific age and filing requirements.

Debts That May Be Partially Paid Then Discharged

Chapter 13 can also provide partial relief for debts like:

Deficiency balances on repossessed vehicles
If your car was repossessed and sold for less than you owed, the remaining balance may be discharged.
Lease obligations and rent arrears
Back rent and unpaid lease balances might be eligible for discharge after the plan.
Certain divorce-related obligations
While child support and alimony are never dischargeable, debts related to property settlement may be under specific circumstances.

Debts That Are Not Dischargeable Under Chapter 13

While Chapter 13 offers broader relief than Chapter 7, some debts cannot be discharged:

Child support and alimony
These obligations must be paid in full during the repayment period.
Student loans
In most cases, student loans are not dischargeable unless you can prove undue hardship through an adversary proceeding.
Recent tax debts
Tax debts that are less than three years old or were not filed properly are typically not dischargeable.
Criminal fines or restitution
Any court-ordered fines or payments for criminal offenses cannot be eliminated.

Why Legal Guidance Matters

Chapter 13 bankruptcy laws are complex and require careful analysis of your financial situation. The right legal guidance can help ensure that you maximize the relief available to you and avoid costly mistakes in your repayment plan. At Kenneth C. Rannick P.C. , we assist individuals and families throughout Chattanooga with tailored bankruptcy solutions designed to protect their rights and give them a fresh start.

Summary

Chapter 13 bankruptcy allows many types of debt to be discharged after a structured repayment plan is completed. Credit cards, medical bills, personal loans, and certain older tax debts are generally eligible for discharge. However, obligations like child support, recent taxes, and most student loans remain non-dischargeable. Legal support is key to navigating these rules effectively. Kenneth C. Rannick P.C. is here to help Chattanooga residents move forward with confidence.

How to Qualify for Chapter 7 Bankruptcy in Tennessee

Wed, 30 Apr 2025 17:44:01 GMT

How to Qualify for Chapter 7 Bankruptcy in Tennessee

Filing for bankruptcy is a major decision, but for many Tennessee residents struggling with debt, Chapter 7 bankruptcy can offer a much-needed financial reset. At Kenneth C. Rannick, P.C. , we help individuals in the Chattanooga area navigate the bankruptcy process and determine if Chapter 7 is the right solution.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy.” It allows qualified individuals to discharge most unsecured debts—like credit cards, medical bills, and personal loans—without requiring repayment. In exchange, certain non-exempt assets may be sold by a court-appointed trustee to pay creditors. However, many people are able to keep most or all of their property due to Tennessee’s generous exemption laws.

The Means Test: Your Key to Qualification

To file for Chapter 7 in Tennessee, you must pass the Chapter 7 Means Test , which evaluates your income and expenses to determine if you truly can’t afford to pay your debts.

Step 1: Compare Your Income
Your household income is compared to the median income for a Tennessee household of the same size. If your income is below the median, you automatically qualify.
Step 2: Deduct Expenses
If your income is above the median, the second step involves subtracting allowable living expenses (e.g., rent, utilities, food) from your income. If there’s not enough left over to pay a portion of your unsecured debts, you may still qualify.

Other Chapter 7 Requirements

Beyond the Means Test, you must meet several additional requirements:

Credit Counseling : You must complete a credit counseling course from an approved provider within 180 days before filing.
No Recent Bankruptcy : You cannot have received a Chapter 7 discharge in the past 8 years or a Chapter 13 discharge in the past 6 years.
Honesty in Reporting : You must disclose all assets, debts, income, and financial history. Concealing information can lead to dismissal of your case or even criminal charges.

Property You Can Keep in Tennessee

Tennessee allows exemptions that protect certain property from being sold in bankruptcy. These may include:

A portion of your home equity (homestead exemption)
Vehicle equity
Household goods and clothing
Pensions and retirement accounts
Public benefits like Social Security or unemployment

A Chattanooga bankruptcy attorney can help you maximize these exemptions.

How Kenneth C. Rannick, P.C. Can Help

Understanding bankruptcy law is challenging. At Kenneth C. Rannick, P.C., we guide Chattanooga residents through every step of the Chapter 7 process—from determining eligibility to protecting your assets and ensuring compliance with all filing requirements.

We’re here to help you make informed decisions and take back control of your financial future.

Signs It Might Be Time to Consider Bankruptcy

Thu, 20 Mar 2025 18:53:07 GMT

Signs It Might Be Time to Consider Bankruptcy

Financial difficulties can creep up slowly or hit all at once. For many people in Chattanooga, recognizing when it's time to seriously consider bankruptcy can be the first step toward finding relief. At Kenneth C. Rannick P.C., we understand how overwhelming debt can feel, and we’re here to help you navigate your options.

1. You're Using Credit to Cover Basic Needs

If you find yourself routinely using credit cards or personal loans to pay for groceries, rent, or utility bills, this could be a sign that your income is no longer enough to support your basic living expenses. This cycle often leads to increasing debt and mounting interest, making it even harder to catch up.

2. Minimum Payments Aren’t Making a Dent

When you're only able to pay the minimum balance on credit cards—and your balances continue to grow—it may be time to evaluate your financial picture. Minimum payments can keep accounts in good standing temporarily, but they rarely reduce the principal, especially with high-interest rates.

3. Debt Collectors Are Calling

If you're receiving constant calls or letters from debt collectors, or worse, being sued for unpaid debts, it's a clear sign your financial obligations are outpacing your ability to keep up. Bankruptcy can halt collection efforts through the automatic stay.

4. You're Falling Behind on Mortgage or Car Payments

Missing payments on secured debts like a home or vehicle puts you at risk of foreclosure or repossession. Filing for bankruptcy might help you stop these processes and keep your property, depending on your specific situation.

5. You’re Considering Draining Retirement Accounts

Using retirement savings to pay off credit cards or unsecured loans can be a dangerous move. Those funds are typically protected in bankruptcy and should be preserved for your future—not used to cover current debts that may be discharged anyway.

6. You’ve Lost Your Job or Faced a Major Life Event

A sudden job loss, medical emergency, or divorce can leave you financially vulnerable. Bankruptcy can provide a safety net and help you rebuild after major life disruptions.

7. You’re Experiencing Emotional and Mental Stress

Constant worry about money can take a toll on your mental health, relationships, and overall well-being. Bankruptcy is not just about numbers—it’s also about giving you peace of mind and the chance for a fresh start.

If any of these signs resonate with you, it may be time to explore your legal options. At Kenneth C. Rannick P.C., we provide compassionate and informed guidance to individuals and families in Chattanooga who are considering bankruptcy. A confidential consultation can help you understand what’s possible—and how to move forward with confidence.

Can I Keep My Car If I File for Chapter 7 Bankruptcy in Tennessee?

Mon, 17 Feb 2025 21:23:13 GMT

Can I Keep My Car If I File for Chapter 7 Bankruptcy in Tennessee?

For many individuals considering Chapter 7 bankruptcy in Tennessee, one of the biggest concerns is whether they can keep their car. Losing transportation can make it difficult to maintain employment and fulfill daily responsibilities. Fortunately, Tennessee bankruptcy laws provide options for retaining your vehicle, but the outcome depends on several factors, including the amount of equity in your car, exemptions, and whether you are current on payments.

Understanding Car Ownership in Chapter 7 Bankruptcy

Chapter 7 bankruptcy is designed to eliminate unsecured debts like credit cards and medical bills. However, it also requires the liquidation of certain assets to repay creditors. When it comes to your car, the court will evaluate:

Equity in the Vehicle: This is the difference between what your car is worth and what you owe on it. If your vehicle has significant equity, it may be considered an asset in your bankruptcy case.
Tennessee Bankruptcy Exemptions: Tennessee law allows filers to protect certain assets from liquidation, including a vehicle exemption of up to $5,000 in equity (or $7,500 if you are married and filing jointly).
Loan Status: If your car is financed and you are behind on payments, the lender may still repossess it, regardless of bankruptcy protections.

Options for Keeping Your Car

If you want to keep your car while filing for Chapter 7 bankruptcy, here are your primary options:

Claiming an Exemption: If the equity in your car is within Tennessee’s exemption limit, you can likely keep your vehicle. However, if your equity exceeds the exemption, the bankruptcy trustee may sell the car and give you the exempted amount, using the remaining funds to pay creditors.
Reaffirming the Loan: If you still owe on your vehicle and want to continue making payments, you may enter a reaffirmation agreement with your lender. This legally binds you to continue paying your car loan despite bankruptcy, preventing repossession.
Redeeming the Vehicle: If you owe more on your car than it is worth, you may be able to pay a lump sum to buy it for its current market value. This option can be beneficial if the vehicle is significantly underwater on the loan.
Voluntary Surrender: If keeping the car is not financially feasible, you may choose to surrender it. Doing so eliminates your responsibility for the remaining balance, as the deficiency is discharged in bankruptcy.

Speak With a Bankruptcy Attorney in Chattanooga

Navigating Chapter 7 bankruptcy and protecting your assets requires careful planning. At Kenneth C. Rannick P.C. , we assist Chattanooga residents in understanding their rights and making informed decisions about their financial future. If you're considering bankruptcy and have concerns about keeping your vehicle, contact our office for guidance tailored to your specific situation.

What Are My Options If I Am Drowning in Credit Card Debt in Tennessee?

Sat, 01 Feb 2025 22:00:12 GMT

What Are My Options If I Am Drowning in Credit Card Debt in Tennessee?

Credit card debt can quickly spiral out of control, leaving many Tennessee residents feeling overwhelmed and unsure of how to regain financial stability. Fortunately, there are several options available to help you manage or eliminate your debt. Understanding these solutions can help you make an informed decision and regain control of your finances.

1. Create a Budget and Prioritize Payments

Before exploring legal or financial interventions, start by assessing your budget. Identify areas where you can cut back on expenses and direct extra funds toward paying off your credit card debt. Prioritize high-interest credit cards first or use the snowball method (paying off smaller balances first for psychological momentum).

2. Debt Consolidation

Debt consolidation allows you to combine multiple credit card debts into a single loan with a lower interest rate. This can make repayment more manageable by reducing the total interest you owe. Options include:

Balance Transfer Credit Cards – Some credit cards offer 0% interest for an introductory period, allowing you to pay down your debt without accruing additional interest.
Personal Loans – You may qualify for a fixed-rate loan to pay off high-interest credit card debt.

3. Debt Settlement

Debt settlement involves negotiating with your creditors to reduce the total amount you owe. While this option can lower your debt, it may also negatively impact your credit score. Be cautious of debt settlement companies that charge high fees and do not guarantee results.

4. Credit Counseling

Nonprofit credit counseling agencies can help you develop a debt management plan (DMP) to make structured payments to creditors. A credit counselor can also negotiate lower interest rates on your behalf and help you create a sustainable financial plan.

5. Bankruptcy as a Last Resort

If your credit card debt is unmanageable and other solutions are not viable, bankruptcy may provide relief. Tennessee residents typically have two options:

Chapter 7 Bankruptcy – This eliminates most unsecured debts, including credit card balances, but requires you to meet income qualifications.
Chapter 13 Bankruptcy – This allows you to restructure your debt into a repayment plan over 3 to 5 years while keeping your assets.

How Kenneth C. Rannick P.C. Can Help

At Kenneth C. Rannick P.C. , we understand the stress that comes with overwhelming credit card debt. Our experienced bankruptcy attorneys in Chattanooga, Tennessee can help you explore all available debt relief options and determine the best path forward. If you are struggling with debt, contact us today for a consultation and take the first step toward financial freedom.

What Are the Documents Required to Apply for Chapter 7 Bankruptcy in Tennessee?

Thu, 21 Nov 2024 21:40:38 GMT

What Are the Documents Required to Apply for Chapter 7 Bankruptcy in Tennessee?

Filing for Chapter 7 bankruptcy can be a powerful step toward regaining financial freedom, but the process requires careful preparation and accurate documentation. Chapter 7 bankruptcy is designed to eliminate unsecured debts like credit cards and medical bills, giving individuals a fresh start. If you’re considering filing in Tennessee, gathering the required documents is a critical first step.

At Kenneth C. Rannick P.C. , we provide legal assistance to the Chattanooga public, guiding individuals through the Chapter 7 bankruptcy process with care and professionalism.

Essential Documents for Filing Chapter 7 Bankruptcy

Here are the key documents you will need when applying for Chapter 7 bankruptcy in Tennessee:

1. Proof of Income

You must provide detailed information about your income for the past six months. This can include:

Pay stubs or salary slips.
Tax returns (usually for the past two years).
Social Security benefits statements.
Pension or retirement income statements.
Income from rental properties or self-employment.

2. Bank Statements

Bank statements for the last three to six months are typically required to verify your financial transactions and account balances.

3. Tax Returns

Your two most recent federal and state tax returns will be needed to show your financial history.

4. List of Assets

You must provide a comprehensive list of all your assets, including:

Real estate properties.
Vehicles.
Personal belongings (furniture, electronics, jewelry).
Bank accounts and investment accounts.

5. List of Debts

You need to compile a detailed list of all your debts, including:

Credit card debts.
Medical bills.
Personal loans.
Car loans or mortgages.
Collection accounts or judgments.

6. Recent Bills and Statements

Include recent billing statements from creditors, utility companies, and any other outstanding obligations.

7. Identification Documents

A government-issued photo ID, such as a driver’s license or passport.
Your Social Security card or an official document with your Social Security number.

8. Proof of Expenses

You must document your monthly expenses, which can include:

Rent or mortgage payments.
Utilities (electricity, water, internet).
Groceries and household supplies.
Insurance premiums (health, auto, life).
Transportation costs (fuel, car maintenance).

9. Credit Counseling Certificate

Before filing for Chapter 7 bankruptcy, you must complete a court-approved credit counseling course and submit the certificate of completion.

10. Statement of Financial Affairs (SOFA)

This document requires detailed answers about your financial history, including any transfers of property, lawsuits, or recent payments to creditors.

11. Means Test Calculation

You must complete the means test to determine your eligibility for Chapter 7 bankruptcy. This test compares your income to Tennessee’s median income and assesses whether you have disposable income to repay your debts.

Why Accurate Documentation Is Essential

Submitting accurate and complete documents is crucial to avoid delays or dismissal of your bankruptcy case. Any discrepancies or missing information can lead to challenges from creditors or the bankruptcy trustee.

How Kenneth C. Rannick P.C. Can Help

At Kenneth C. Rannick P.C. , we understand that the bankruptcy process can feel overwhelming. Our team is here to assist the Chattanooga public by ensuring that all necessary documents are properly prepared and submitted.

Our Services Include :

Reviewing your financial situation to determine eligibility for Chapter 7 bankruptcy.
Assisting with the preparation and filing of all required documents.
Representing you in interactions with the bankruptcy trustee and creditors.
Providing guidance throughout the entire bankruptcy process to help you achieve a fresh financial start.

Contact Kenneth C. Rannick P.C. Today

If you’re considering Chapter 7 bankruptcy in Chattanooga, let us guide you through the process with confidence and clarity. Contact Kenneth C. Rannick P.C. today for a consultation, and take the first step toward financial relief.

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in Tennessee?

Tue, 29 Oct 2024 20:40:41 GMT

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in Tennessee?

When facing financial challenges, understanding the options within bankruptcy can help you make informed decisions. In Tennessee, Chapter 7 and Chapter 13 are the two most common forms of bankruptcy, each offering distinct paths toward debt relief. At Kenneth C. Rannick P.C., we assist Chattanooga residents in choosing the right option for their financial situation.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often called "liquidation bankruptcy," is designed for individuals with limited income who cannot repay their debts. Here’s what you need to know:

Debt Discharge: Chapter 7 aims to discharge unsecured debts, such as credit card bills and medical expenses, offering a fresh start.
Asset Liquidation: Non-exempt assets may be sold to repay creditors, although many essential assets (like primary residences or vehicles) may be protected under Tennessee’s exemption laws.
Duration: Chapter 7 is generally faster, taking three to six months to complete.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often called a “wage earner’s plan” because it enables individuals with a steady income to reorganize their debts and pay them over time. Key aspects include:

Repayment Plan: Chapter 13 involves a structured repayment plan lasting three to five years, allowing filers to keep their assets while making manageable payments.
Debt Types Covered: While it focuses on secured debts like mortgages or car loans, Chapter 13 can also help with unsecured debt and delinquent payments.
Eligibility: Chapter 13 may be a good option if you have regular income and assets you wish to retain.

Choosing the Right Bankruptcy Option

Selecting between Chapter 7 and Chapter 13 depends on your income, assets, and financial goals. Kenneth C. Rannick P.C. can help you understand these options and choose the best path for lasting relief.

If you’re struggling with debt in Chattanooga, contact Kenneth C. Rannick P.C. today for guidance in achieving financial freedom and securing peace of mind.

Understanding Chapter 7 Bankruptcy Qualifications

Mon, 24 Jun 2024 15:34:01 GMT

Understanding Chapter 7 Bankruptcy Qualifications

Are you drowning in debt and unsure of how to find relief? Chapter 7 bankruptcy may be a viable option for those seeking a fresh start financially. But who exactly qualifies for Chapter 7 bankruptcy? At Kenneth C. Rannick P.C., we assist the Tennessee public with bankruptcy matters, including determining eligibility for Chapter 7. Let's dive into the qualifications and requirements for filing Chapter 7 bankruptcy.

To qualify for Chapter 7 bankruptcy, individuals must pass the means test, which compares their income to the median income in their state. If your income is below the median income level, you automatically qualify for Chapter 7. However, if your income is above the median level, additional calculations are performed to determine eligibility based on expenses and disposable income.

Another key qualification for Chapter 7 bankruptcy is that individuals must not have filed for bankruptcy under Chapter 7 or Chapter 13 within the past eight years. This restriction ensures that those who truly need debt relief are able to access it through Chapter 7. Additionally, individuals must not have had a previous bankruptcy case dismissed within the past 180 days due to willful failure to appear in court or comply with court orders.

It's important to note that certain types of debts cannot be discharged through Chapter 7 bankruptcy, such as student loans, child support, alimony, and most tax debts. However, credit card debt, medical bills, personal loans, and other unsecured debts can typically be discharged through Chapter 7. By working with an experienced attorney like Kenneth C. Rannick P.C., you can navigate the complexities of bankruptcy laws and ensure that you receive the maximum debt relief possible.

In addition to meeting specific qualifications and requirements, individuals considering filing for Chapter 7 bankruptcy must also complete credit counseling from an approved agency within six months before filing their petition. This counseling aims to educate individuals on budgeting, managing finances, and exploring alternatives to bankruptcy. Once all requirements are met and necessary paperwork is submitted, a trustee will be appointed to oversee the liquidation of non-exempt assets to repay creditors.

Chapter 7 bankruptcy can provide much-needed relief for individuals burdened by overwhelming debt. By understanding the qualifications and requirements for filing Chapter 7 bankruptcy, Chattanooga residents can make informed decisions about their financial future. At Kenneth C. Rannick P.C., we are dedicated to helping our clients navigate the complexities of bankruptcy law and achieve a fresh start free from crippling debt. Contact us today to learn more about how we can assist you with your bankruptcy needs.

Understanding the Role of the Trustee in Chapter 13 Bankruptcy

Fri, 05 Apr 2024 14:58:13 GMT

Understanding the Role of the Trustee in Chapter 13 Bankruptcy

Filing for bankruptcy can be a confusing and overwhelming process, especially when it comes to understanding the role of a trustee in Chapter 13 bankruptcy. If you are a Chattanooga resident considering filing for bankruptcy, it's important to have a clear understanding of what a trustee is and their responsibilities during the bankruptcy process. In this blog post, we will discuss what a trustee is, whether you get to choose your own trustee when filing for Chapter 13 bankruptcy, and how Kenneth C. Rannick P.C. can assist you with your bankruptcy matters.

What is a Trustee?

A trustee in Chapter 13 bankruptcy is an individual appointed by the court to oversee your case and ensure that all parties involved follow the rules and guidelines set forth by the Bankruptcy Code. The trustee's main responsibilities include reviewing your repayment plan, collecting payments from you, distributing those payments to creditors, and making sure that you are abiding by the terms of your plan. They act as a mediator between you and your creditors, working to facilitate a successful repayment process.

Do I Choose the Trustee When I File for Chapter 13 Bankruptcy?

No, you do not get to choose your own trustee when filing for Chapter 13 bankruptcy. The court appoints a trustee based on their availability and workload at the time of your filing. While you may not have control over who your trustee is, it's important to remember that they are there to help guide you through the bankruptcy process and ensure that everything runs smoothly.

How Can Kenneth C. Rannick P.C. Assist You?

If you are considering filing for Chapter 13 bankruptcy in Chattanooga, Kenneth C. Rannick P.C. can provide you with expert guidance and representation throughout the entire process. Our experienced team understands the complexities of bankruptcy law and will work tirelessly to help you achieve financial freedom. From helping you develop a repayment plan to representing you in court hearings, we will be by your side every step of the way.

Working with Your Trustee

Once your repayment plan has been approved by the court, it is crucial that you maintain open communication with your trustee throughout the duration of your case. Your trustee will need accurate financial information from you in order to properly distribute payments to creditors and ensure that everything stays on track. By cooperating with your trustee and following their instructions, you can increase the likelihood of successfully completing your Chapter 13 bankruptcy.

In conclusion, understanding the role of a trustee in Chapter 13 bankruptcy is essential for anyone considering filing for bankruptcy in Chattanooga. While you may not have control over who your trustee is, they are there to help facilitate a successful repayment plan and guide you through the process. With Kenneth C. Rannick P.C.'s expertise on your side, navigating Chapter 13 bankruptcy can be a smoother experience. Don't hesitate to reach out for assistance with any questions or concerns regarding bankruptcy matters – we are here to help!

Understanding which Debts can be Discharged in Chapter 7 Bankruptcy

Wed, 27 Mar 2024 15:28:27 GMT

Understanding which Debts can be Discharged in Chapter 7 Bankruptcy

Are you a Chattanooga resident struggling with overwhelming debt and considering filing for bankruptcy? If so, you may have questions about which debts can be discharged in Chapter 7 bankruptcy. One common concern is whether student loan debt can be eliminated through this process. At Kenneth C. Rannick P.C., we assist the Chattanooga public with bankruptcy matters and are here to provide you with the information you need to make informed decisions about your financial future.

Chapter 7 bankruptcy is a form of liquidation bankruptcy that allows individuals to eliminate most unsecured debts, such as credit card bills, medical expenses, and personal loans. However, there are certain types of debts that cannot be discharged through Chapter 7 bankruptcy. These include child support payments, alimony obligations, most tax debts, and student loan debt. While it is possible to have student loan debt discharged in certain circumstances, such as proving undue hardship, it is generally difficult to do so.

One important thing to note is that filing for Chapter 7 bankruptcy does not automatically discharge all of your debts. Some creditors may challenge the dischargeability of their debts or file objections with the court. It is crucial to work with an experienced bankruptcy attorney who can guide you through the process and ensure that your rights are protected.

At Kenneth C. Rannick P.C., our team has years of experience helping individuals in Chattanooga navigate the complexities of Chapter 7 bankruptcy. We understand that each case is unique and requires personalized attention. Whether you are struggling with credit card debt, medical bills, or other financial obligations, we are here to provide you with the guidance and support you need to achieve a fresh start.

When considering whether to file for Chapter 7 bankruptcy, it is important to weigh the pros and cons carefully. While this process can provide relief from overwhelming debt and harassment from creditors, it can also have long-term consequences on your credit score and financial future. Our team will work closely with you to assess your situation and determine if Chapter 7 bankruptcy is the right choice for you.

In conclusion, if you are a Chattanooga resident facing financial difficulties and considering filing for Chapter 7 bankruptcy, it is essential to understand which debts can be discharged through this process. While student loan debt is generally not dischargeable in Chapter 7 bankruptcy, there may be other options available to help alleviate your financial burden. At Kenneth C. Rannick P.C., we are committed to providing compassionate and knowledgeable legal representation to individuals seeking relief from overwhelming debt. Contact us today for a consultation to discuss your options and take the first step towards a brighter financial future.

Protecting Your Assets in Chapter 7 Bankruptcy

Mon, 19 Feb 2024 20:05:40 GMT

Protecting Your Assets in Chapter 7 Bankruptcy

Filing for bankruptcy can be a scary and overwhelming experience. You may be worried about losing all of your assets, including your home. But did you know that there are exemptions in Chapter 7 bankruptcy that can protect some of your assets? If you live in Chattanooga and are considering filing for Chapter 7 bankruptcy, it's important to understand what types of assets are exempt and how you can keep them. In this blog post, we'll explore the different bankruptcy exemptions available and how they can help you protect your property.

What Types of Assets Are Exempt in Chapter 7 Bankruptcy?

There are several types of assets that are exempt from liquidation in Chapter 7 bankruptcy. These include:

Homestead exemption: This allows you to keep a certain amount of equity in your primary residence.
Personal property exemption: This covers items such as clothing, appliances, furniture, and jewelry up to a certain value.
Vehicle exemption: This allows you to keep a certain amount of equity in one or more vehicles.
Retirement accounts: IRAs, 401(k)s, and other retirement accounts are generally exempt from liquidation.
Tools of the trade: Tools and equipment used for work or business purposes may be exempt up to a certain value.

It's important to note that each state has its own set of exemptions, so it's essential to consult with an experienced bankruptcy attorney who knows Tennessee law.

Can I Keep My Home After Filing for Chapter 7 Bankruptcy?

If you're worried about losing your home after filing for Chapter 7 bankruptcy, there is some good news. The homestead exemption mentioned above can help you protect some or all of the equity in your home. For example, if the equity in your home is $100,000 and the homestead exemption is $50,000, you can protect that $50,000 and may be able to keep your home. However, if the equity in your home is more than the homestead exemption, the bankruptcy trustee may sell your home to pay off creditors.

It's also important to note that if you're behind on mortgage payments, filing for Chapter 7 bankruptcy doesn't automatically stop foreclosure proceedings. You'll need to work with your lender or an experienced attorney to determine the best course of action.

How Can Kenneth C. Rannick P.C. Assist Chattanooga Residents with Bankruptcy Matters?

If you're considering filing for Chapter 7 bankruptcy in Chattanooga, it's essential to have an experienced attorney by your side who knows Tennessee bankruptcy law inside and out. At Kenneth C. Rannick P.C., we have a team of knowledgeable attorneys who can help guide you through the bankruptcy process and ensure that your assets are protected.

We understand that every bankruptcy case is unique, which is why we take a personalized approach to each case we handle. We'll work closely with you to understand your financial situation and help you make informed decisions about how to proceed.

What Are Some Other Benefits of Filing for Chapter 7 Bankruptcy?

In addition to protecting some of your assets from liquidation, there are several other benefits of filing for Chapter 7 bankruptcy:

It can provide relief from overwhelming debt and creditor harassment.
It can help you get a fresh start financially.
It can prevent wage garnishment and other collection actions.

Filing for Chapter 7 bankruptcy can be a difficult decision, but it can also provide much-needed relief from overwhelming debt and creditor harassment. By understanding the different types of exemptions available in Tennessee and working with an experienced attorney like Kenneth C. Rannick P.C., you can protect some or all of your assets while getting a fresh start financially. If you're considering filing for bankruptcy in Chattanooga, don't hesitate to contact us today for a consultation.

Subchapter 5 Bankruptcy: Unlocking New Possibilities for Tennessee Residents

Tue, 30 Jan 2024 21:45:46 GMT

Are you a Tennessee resident facing financial challenges and considering bankruptcy? If so, you may have heard about a relatively new option called Subchapter 5 bankruptcy. But what exactly is Subchapter 5 and how does it differ from traditional Chapter 11 bankruptcy? More importantly, what benefits does it offer to individuals and small businesses?

In this blog post, we will explore the world of Subchapter 5 bankruptcy and shed light on its advantages for Tennessee residents. Whether you're a struggling entrepreneur or an individual burdened by overwhelming debt, understanding the potential benefits of Subchapter 5 can help you make informed decisions about your financial future.

What is Subchapter 5 Bankruptcy?

Subchapter 5 is a relatively recent addition to the United States Bankruptcy Code, specifically designed to provide a streamlined and cost-effective bankruptcy process for small businesses and individuals. It was created as part of the Small Business Reorganization Act (SBRA) in 2019, with the aim of increasing accessibility to Chapter 11 bankruptcy relief.

The Benefits of Subchapter 5 Bankruptcy

Simplified Process: One of the key advantages of Subchapter 5 is its simplified and faster bankruptcy process. Unlike traditional Chapter 11 bankruptcy, which can be complex and costly, Subchapter 5 offers a more streamlined approach that is better suited for small businesses and individuals.
Retention of Ownership: Under Subchapter 5, business owners have the opportunity to retain ownership and control of their company while developing a repayment plan. This allows for greater flexibility and the ability to restructure debts without losing ownership interests.
Reduced Plan Requirements: Subchapter 5 eliminates certain stringent plan requirements that are typically associated with traditional Chapter 11 bankruptcy. This simplification of the plan process makes it more accessible to small businesses and individuals.
Debt Repayment Plan: Subchapter 5 allows for the development of a debt repayment plan based on the individual's or small business's disposable income. This plan spans over three to five years, making it more manageable and achievable for debtors.
Creditor-Friendly Approach: Subchapter 5 encourages creditor participation and collaboration, promoting consensual resolutions and a more amicable environment. This can lead to increased cooperation, reduced litigation costs, and ultimately, a more successful restructuring process.

Subchapter 5 vs. Chapter 11 Bankruptcy: Understanding the Difference

While both Subchapter 5 bankruptcy and traditional Chapter 11 bankruptcy share some similarities, there are significant differences between the two. The primary distinction lies in the complexity, cost, and requirements associated with each option. Subchapter 5 offers a more simplified and accessible bankruptcy process specifically tailored to the needs of small businesses and individuals, while Chapter 11 is better suited for larger businesses with more complex financial structures.

If you're a Tennessee resident grappling with financial difficulties, Subchapter 5 bankruptcy may provide a viable solution. Its streamlined process, reduced plan requirements, and debtor-friendly approach make it an attractive option for small businesses and individuals seeking relief from overwhelming debt.

Before making any decisions, it's essential to consult with a qualified bankruptcy attorney who can guide you through the process and help determine the best course of action for your specific situation.

Remember, bankruptcy is not a one-size-fits-all solution, and the outcome will depend on various factors. However, understanding the potential benefits of Subchapter 5 bankruptcy can empower you to make informed decisions about your financial future.

At Kenneth C. Rannick, P.C., we specialize in bankruptcy law and can provide the guidance and support you need during challenging times. Contact us today to schedule a consultation and explore your options for a fresh start.

Take control of your financial future with Subchapter 5 bankruptcy. Let us help you navigate the path to a brighter tomorrow.

A Comprehensive Guide to How Chapter 11 Bankruptcy Works in Minnesota

Thu, 21 Dec 2023 00:59:45 GMT

Filing for bankruptcy can be a scary and confusing decision, but it is a necessary step for individuals and businesses who are struggling with their finances. In Minnesota, one of the most common types of bankruptcy is Chapter 11 bankruptcy, which allows a business to reorganize its debts and continue operating while paying off its creditors. If you're considering Chapter 11 bankruptcy, it's important to understand how it works and what benefits it can offer. In this post, we'll delve into the process of filing for Chapter 11 bankruptcy, highlight its advantages, and discuss how you can get started.

1. Understanding Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a form of bankruptcy that allows businesses to reorganize their debts while continuing to operate. The goal of this process is to give businesses a chance to become profitable again by restructuring their debt payments. During Chapter 11 bankruptcy, a business is protected from creditors by an automatic stay that prevents them from pursuing collection activities. The debtor then works with a bankruptcy court and creditors to create a repayment plan that will allow them to pay off their debts over time.

2. Benefits of Chapter 11 Bankruptcy

There are several benefits to filing for Chapter 11 bankruptcy. One of the primary benefits is that it allows the debtor to maintain control of their business operations while repaying their debts. This means that the debtor can continue to generate revenue and will not be forced to liquidate their assets to pay off their creditors. Additionally, Chapter 11 bankruptcy can give the debtor more time to negotiate with their creditors and reach a repayment agreement that is more favorable to them.

3. How to File for Chapter 11 Bankruptcy

Filing for Chapter 11 bankruptcy can be a complex and time-consuming process, but it is possible with the help of a knowledgeable bankruptcy attorney. The first step is to file a petition with the bankruptcy court, which will initiate the automatic stay and prevent creditors from taking any further collection actions. Next, the debtor will need to provide the court with a comprehensive list of their assets, liabilities, and creditors. From there, the debtor will work with their attorney to create a repayment plan that is feasible and fair to all parties involved.

4. Working with a Bankruptcy Attorney

Filing for Chapter 11 bankruptcy can be an overwhelming process, and it is important to work with a qualified bankruptcy attorney who can guide you through the process. A bankruptcy attorney can help you prepare and file the necessary paperwork, negotiate with creditors on your behalf, and create a repayment plan that is tailored to your unique financial situation. Additionally, an attorney can give you advice on how to protect your assets and maintain control of your business operations during the bankruptcy process.

Filing for Chapter 11 bankruptcy can be a complicated and stressful process, but it can also be a valuable tool for businesses that are struggling with their finances. By reorganizing their debts and negotiating with creditors, businesses can get a fresh start and work towards profitability once again. If you're considering filing for Chapter 11 bankruptcy in Minnesota, it's important to work with a qualified attorney who can guide you through the process and help you achieve the best outcome.

Chapter 7 vs Chapter 13 Bankruptcy: Which is right for you?

Sat, 02 Dec 2023 22:38:54 GMT

Chapter 7 vs Chapter 13 Bankruptcy: Which is right for you?

Bankruptcy can be a scary and overwhelming experience for anyone, but it’s important to remember that it’s a tool for financial relief and a chance to restart your financial life. If you find yourself in a position where you can’t afford to pay your debts, there are different options available. Chapter 7 and Chapter 13 are two types of bankruptcy that individuals often file. In this blog post, we’ll be discussing the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy, who should file for Chapter 13 bankruptcy, and how we can assist Chattanooga residents with their bankruptcy matters at Kenneth C. Rannick P.C.

Chapter 7 bankruptcy:

Chapter 7 bankruptcy, also known as a “straight” bankruptcy, involves the liquidation of non-exempt assets to repay creditors. In most cases, a debtor is allowed to keep their primary residence, car, and other essential property. Chapter 7 bankruptcy is a good option for those who have little or no income and want to eliminate all debts.

To file for Chapter 7 bankruptcy, the debtor must pass the means test, which determines if the debtor’s income is below the median income level in their state. If the debtor’s income is above the median level, there may be restrictions placed on their eligibility to file for Chapter 7 bankruptcy. It’s important to note that certain debts, such as student loans and taxes, cannot be discharged through Chapter 7 bankruptcy.

Chapter 13 bankruptcy:

Chapter 13 bankruptcy, also known as a “reorganization” bankruptcy, allows debtors to create a repayment plan to pay off their debts over a period of three to five years. This type of bankruptcy is a good option for those who have a regular income, can afford to pay some of their debts, and want to keep their non-exempt assets.

To file for Chapter 13 bankruptcy, the debtor’s unsecured debts cannot exceed $394,725, and secured debts cannot exceed $1,184,200. The debtor must also have a reliable source of income to make the scheduled payments. It’s important to note that all debts must be paid off during the repayment period by the debtor, and any remaining debts will be discharged at the end.

Who should file for Chapter 13 bankruptcy:

Chapter 13 bankruptcy may be a good option for individuals who have a regular income but are struggling to pay their debts. This type of bankruptcy allows you to create a repayment plan without being forced to sell your assets. Additionally, Chapter 13 bankruptcy may be a good option for those who can’t qualify for Chapter 7 bankruptcy, as there are no income restrictions.

At Kenneth C. Rannick P.C. we can assist the Chattanooga residents with bankruptcy matters. We can advise you on which type of bankruptcy may be right for you. Our team will help you through every step of the process, from filing paperwork to establishing eligibility and completing repayment plans. Depending on your situation, we may also be able to negotiate with your creditors and settle debts outside of bankruptcy.

If you are considering bankruptcy, it’s important to understand that it’s not the end of the world. Bankruptcy is a tool that can help you escape overwhelming debt and start fresh. Both types of bankruptcy have their unique advantages, and the right choice for you will depend on your individual circumstances. At Kenneth C. Rannick P.C., we are committed to helping Chattanooga residents take control of their financial lives. Our team is ready to guide you through the process of filing for bankruptcy and ensure that your financial future is as bright as ever.

Understanding Subchapter 5 Bankruptcy

Fri, 20 Oct 2023 06:25:31 GMT

For many people in Tennessee, bankruptcy can be a daunting and overwhelming prospect. However, if you are struggling with unmanageable debt, it is important to know that there are options available to you. One such option is subchapter 5 bankruptcy, a relatively new form of bankruptcy designed specifically for small businesses and individuals with debts of less than $7.5 million. In this blog post, we will take a closer look at what subchapter 5 bankruptcy is, who might be eligible to file for it, and the benefits it can offer.

What is Subchapter 5 Bankruptcy?

Subchapter 5 bankruptcy was created as part of the Small Business Reorganization Act of 2019. Its purpose is to provide a streamlined and cost-effective process for small businesses and individuals to restructure and eliminate their debts. Some of the key features of subchapter 5 bankruptcy include:

- A simplified reorganization plan process

- No requirement for a committee of creditors

- No need to obtain approval from creditors for the reorganization plan

- Filing fees can be paid in installments

Who Should File for Subchapter 5 Bankruptcy?

Subchapter 5 bankruptcy is specifically designed for small businesses and individuals with debts of less than $7.5 million. To be eligible to file for subchapter 5 bankruptcy, you must meet certain criteria. These include:

- Being engaged in commercial or business activities

- Owning no more than $7.5 million in debt

- Earning at least half of your income from your business

- Being an individual or married couple, rather than a corporation or partnership

Benefits of Filing for Subchapter 5 Bankruptcy

There are several benefits to filing for subchapter 5 bankruptcy. These include:

- Cost-Effective: One of the primary benefits of filing for subchapter 5 bankruptcy is that it is often less expensive than other forms of bankruptcy. This is because it eliminates certain requirements, such as the need for a committee of creditors.

- Reduced Plan Length: In a typical chapter 11 bankruptcy, the debtor has up to 5 years to repay their debts. With subchapter 5 bankruptcy, the plan length is limited to 3 years, making it a quicker and more efficient process.

- Greater Control: Unlike other forms of bankruptcy, in subchapter 5, debtors retain greater control over the bankruptcy process. This includes being able to draft their own reorganization plans and being granted more leeway in determining treatment of unsecured creditors.

- Fewer Restructuring Hurdles: With subchapter 5 bankruptcy's simplified reorganization plan process, small businesses and individuals have more flexibility in restructuring their debts.

Overall, subchapter 5 bankruptcy is an attractive option for small businesses and individuals who are struggling with unmanageable debt. By offering a streamlined and cost-effective process, it provides an opportunity for these entities to effectively restructure and eliminate their debts. If you are considering subchapter 5 bankruptcy, it is important to consult with an experienced bankruptcy attorney who can guide you through the process and help you determine whether it is the right option for your specific situation.

All You Need To Know About Subchapter 5 Bankruptcy In Tennessee

Thu, 28 Sep 2023 19:21:36 GMT

The pandemic has caused immense financial distress for individuals and businesses alike. With businesses shutting down and millions losing jobs, many have turned to bankruptcy for relief. And this is where subchapter 5 bankruptcy comes in. If you're a resident of Tennessee and are looking to file for subchapter 5 bankruptcy, you've come to the right place. In this blog post, we'll explore what subchapter 5 bankruptcy is, who should file for it, and the benefits of doing so. We'll also discuss how Kenneth C. Rannick, P.C. can assist you with your subchapter 5 bankruptcy matters.

1. What is subchapter 5 bankruptcy?

Subchapter 5 bankruptcy, also known as small business reorganization, is a relatively new form of bankruptcy introduced by the Small Business Reorganization Act of 2019. It is designed specifically for small businesses and individuals with debts of less than $7.5 million, making it a simpler and more affordable form of bankruptcy compared to other chapters. The aim of subchapter 5 bankruptcy is to help small businesses restructure their debts and emerge from bankruptcy with a viable business.

2. Who should file for subchapter 5 bankruptcy?

Subchapter 5 bankruptcy is a great option for small businesses that are struggling with debt but have a viable business model. It can also be a good option for individuals who don't qualify for other chapters of bankruptcy, such as chapter 7 or chapter 13. To file for subchapter 5 bankruptcy, the debtor must have a regular income and be willing to work with creditors to come up with a repayment plan.

3. Benefits of filing for subchapter 5 bankruptcy

One of the biggest benefits of subchapter 5 bankruptcy is that it allows small businesses to restructure their debts and emerge from bankruptcy with a viable business. This means that creditors are more likely to be paid, and the business can continue to operate. Another benefit is that subchapter 5 bankruptcy is faster and less expensive than other chapters of bankruptcy, making it more accessible to small business owners. Additionally, subchapter 5 bankruptcy allows debtors to retain ownership of their business and reorganize their debts in a way that is manageable.

4. How Kenneth C. Rannick, P.C. can assist you with your subchapter 5 bankruptcy matters

If you're a resident of Tennessee and are considering filing for subchapter 5 bankruptcy, Kenneth C. Rannick, P.C. can help. We have extensive experience with bankruptcy matters, including subchapter 5 bankruptcy, and can guide you through the process from start to finish. We can help you determine whether subchapter 5 bankruptcy is the right option for your small business, and can help you come up with a repayment plan that works for you and your creditors.

Subchapter 5 bankruptcy can be a great option for small businesses and individuals who are struggling with debt but have a viable business model. It is a simpler and more affordable form of bankruptcy compared to other chapters, making it more accessible to those who need it. Kenneth C. Rannick, P.C. can help you with your subchapter 5 bankruptcy matters, and guide you through the process from start to finish. If you're a resident of Tennessee and are considering filing for subchapter 5 bankruptcy, don't hesitate to reach out to us for assistance.

IS IT A SIN TO FILE BANKRUPTCY?

Tue, 22 Aug 2023 17:17:52 GMT

IS IT A SIN TO FILE BANKRUPTCY?

I frequently have thoughtful clients express their feelings of shame and remorse because they feel guilty over their burdening debt load. They feel trapped because they are overwhelmed between the pincers of their moral crisis. On one hand they want to pay their obligations because they want to keep their word to their creditors; they feel that by considering a bankruptcy case they have betrayed the values instilled by their parents and grandparents. They have been taught that filing bankruptcy is a sin and God is displeased at them. On the other hand they have typically tried for years to work out their bills. They have called the credit card companies to negotiate lower interest and have been disregarded. They have borrowed from Peter to pay Paul. They have attempted to juggle debt and take on new, higher interest debt to pay delinquent debt to stay current. They find it ever harder to service the debt they have. They then find the bill collectors are mean and rude and there is not enough money to go around to work out settlements with creditors. In addition, many clients have been ripped off by internet debt settlement and bill consolidation firms or those TV 800 number agencies who have taken their money and have given no help. There are arguments over money problems and creditors are calling at work. The clients feel overwhelmed and trapped. They can’t sleep and their health is deteriorating. They are trapped between idealism and reality. They yearn to pay their bills but they know bankruptcy is inevitable and they feel sick about it.

Let’s be honest. Bankruptcy is controversial because it is the friction point between two important public policy clashes. On one hand all of us want each other to honor contracts and pay our creditors. When we work, we want to be paid. When we make a sale, we want to be paid. When we entrust our money we want it to be returned according to our agreement. Yet, life happens. Sometimes we bite off more than we can chew. We have death, job interruptions, divorce, illness, and poor choices. We have credit card companies hitting us with increased payments and interest rates. We find ourselves unable to pay according to our initial plans.

When we come to bankruptcy court we come where we have the clash. The gears in the economic machine get stopped. The creditors want to be paid, the debtors can’t afford to pay. What are we going to do? Are we going to kill the debtor? Cut off his hand? Sell him into slavery? Put him in jail? Bankruptcy attempts to find a balancing point between those two competing realities. Creditors deserve to be paid but the Debtor just does not have the money to do so. Not only is there the conflict between the debtor and the creditors, there is competition between creditors over how big a portion each creditor should get. Bankruptcy prioritizes who should get paid first, if there is any money available, and it insures that the pain is evenly shared. Bankruptcy court is the only court designed to modify or wipe out many contracts in a way that helps the honest but unfortunate debtor. As we will see below, it is ordained by God.

You may wonder what does this have to do with God? Let’s go back in time and look at that.

God once created a government based upon a theocracy. That is, God was the head of the Government. In the Bible, God set up some financial rules that are quite different from the way we do things today. For example, it was illegal for one Jew to charge another Jew interest (Leviticus 25:36-37, Deuteronomy 24:19). Long-term debt was illegal also (Deuteronomy 15:1-11). In fact, Leviticus Chapter 25, and restated in Deuteronomy Chapter 15, was a prototype of Bankruptcy law. Here is how it worked.

Unlike now days, in the Old Testament when a Jew was in debt, first there would be no interest accruing and the borrower would only pay on the debt for up to seven years because once every seven years the debt was canceled. After seven cycles of seven, on the 50th year there was the Year of Jubilee, slaves were set free and the farms that had been sold were returned to the original land holders’ families. Imagine if you incurred debt on the day after Jubilee, you would repay until the next year of cancellation seven years later. If you got in debt three years after the cancellation you would have to repay for four years, and so forth. The crucial point to understand is there were many ways one could become in debt. One could injure his neighbor’s property or animals and be indebted (Leviticus 24:21). One could have a fouled business transaction and be indebted (Leviticus 25:39). In any event, God himself created a law for debt cancelation! In addition to the cancelation of debt every seven years, following the seventh cycle of seven years, there was a year of Jubilee (Leviticus 25:54). During the year of Jubilee there was no planting or harvesting. It was a time of enjoying the Lord’s provision. One would harvest after the 6th year and the Lord would provide a bountiful harvest to support him for three years: the Sabbath 7th year; the year of Jubilee 8th year; plus the whole next crop planting 9th year (Leviticus 25:18-22). As stated above, on the Jubilee there was a reversion of land back to the original family. Imagine a grandchild would reclaim the farm his grandfather had sold up to fifty years ago! There were no corporations accumulating and hoarding wealth in perpetuity. Land was returned to the original family!

My how times have changed!

Centuries after Moses had received the Law from God on Mount Sinai, the Jews had grossly deviated from God’s divine plan. They had started charging interest to each other (Ezekiel 22:12). They had begun oppressing the poor by repossessing the clothes from each other in the event of loan defaults (Amos 2:8).

God saw this type of behavior and called it wicked. God sent prophets such as Isaiah, Jeremiah, Ezekiel, Amos, and Hosea and warned the northern Kingdom of Israel and the Southern Kingdom of Judah. In fact, at one point God said that Jerusalem was more wicked than Sodom and Gomorrah because, among other things, they had been oppressing the poor by their lending practices (Ezekiel 22:12).

Ultimately, God judged Israel and then Judah and allowed each kingdom to be punished and taken into captivity. First the Assyrians took the Northern Kingdom of Israel into captivity (2 Kings 17:5-7). Later Babylonia took the Southern Kingdom of Judah into exile in Mesopotamia (2 Kings 25:1-22). The conquering King Nebuchadnezzar of Babylonia did not take 100% of the people to exile. He destroyed the Temple in Jerusalem where the law had been kept, and he left some of the people, a remnant, behind in the land (2 Kings 25:22). I suppose he didn’t want to erode his tax base, so some people were left behind to tend fields and olive trees, and keep out the wild animals. The Assyrians who had taken Israel captive fell to Babylonia (Ezekiel 32:22-23). The Babylonians were later conquered by the Medes and Persians (Daniel 5:31).

Approximately 70 years after the fall of Jerusalem, the Jews were ruled by Artaxerxes, King of Persia (Nehemiah 2:1). He had been served by a good Jewish prophet named Nehemiah. Nehemiah had been reading some of the ancient scrolls of his Jewish ancestors and learned of the destruction of Jerusalem. Artaxerxes gave his permission and the money for Nehemiah to go with a contingent and rebuild Jerusalem (Nehemiah 2:4-10). When Nehemiah got there he found not only was the city in disarray with its fortified walls destroyed, but he also found a disfunctioning social structure of the Jewish remnant who had been left behind 70 years earlier by Nebuchadnezzar.

In Nehemiah, we see many ugly circumstances (Nehemiah 3:13; 5:1-13). The people were in dire straights and had borrowed heavily to get food during a famine and pay high taxes. We know from secular sources that there was a shortage of food, resulting in a 50% rise in prices.

In those tough economic times of famine, taxes, and inflation, families in Israel would borrow. Upon default, if the borrower could not repay the loan, foreclosures happened and the borrower’s children, wife, or the borrower himself, could go into slavery as a bondservant. Ironically, if those Israelites had been slaves in Mesopotamia, at least the families would have remained together, yet due to the oppression of the Jewish bill collectors in Jerusalem, the families could be torn apart at slave market sales.

Nehemiah saw this and was outraged. He arrived on the scene and heard the complaint of the people. The Scripture reads:

“Now there was a great outcry of the people and of their wives against their Jewish brothers. For there were those who said, “We, our sons and our daughters are many; therefore let us get grain that we may eat and live.” There were others who said, “We are mortgaging our fields, our vineyards and our houses that we might get grain because of the famine.” Also there were those who said, “We have borrowed money for the king’s tax on our fields and our vineyards. “Now our flesh is like the flesh of our brothers, our children like their children. Yet behold, we are forcing our sons and our daughters to be slaves, and some of our daughters are forced into bondage already, and we are helpless because our fields and vineyards belong to others.” Then I was very angry when I had heard their outcry and these words.” (Neh. 5:1-6)

These Jewish borrowers were enslaved by the other Jewish Noblemen and officials. Their fields and vineyards had been foreclosed. Their children were sold into slavery and were exploited. The safety valve God had given to Moses at Mt. Sinai, namely the Jubilee and cancellation of debt, had been abandoned. We read that Nehemiah became furious! He was not mad at the poor persons in debt. He was outraged towards the bankers who were heavy handed:

“Then I was very angry when I had heard their outcry and these words. I consulted with myself and contended with the nobles and the rulers and said to them, “You are exacting usury, each from his brother!” Therefore, I held a great assembly against them. I said to them, “We according to our ability have redeemed our Jewish brothers who were sold to the nations; now would you even sell your brothers that they may be sold to us?” Then they were silent and could not find a word to say. Again I said, “The thing which you are doing is not good; should you not walk in the fear of our God because of the reproach of the nations, our enemies? “And likewise I, my brothers and my servants are lending them money and grain. Please, let us leave off this usury. “Please, give back to them this very day their fields, their vineyards, their olive groves and their houses, also the hundredth part of the money and of the grain, the new wine and the oil that you are exacting from them.” (Neh. 5:6-11)

We see Nehemiah himself had gone to the slave market and with his own money bought those children to return them to the parents. He called a community-wide meeting and scolded the officials and publicly proclaimed the bankers were the sinners for oppressing the poor. He blasted them for their foreclosures and for charging interest. And what was the high rate of interest (usury) that was being charged? It was only ONE PERCENT interest, “the hundreth part of the money, grain, new wine, and oil” (Nehemiah 5:11).

Can you put that into perspective for today? The prophet Nehemiah was outraged at the lenders, not those in debt. He blistered the bankers for charging 1% interest and for conducting foreclosures! Today you are being hit with late charges, over the limit fees, default interest rate interest charges, electronic payment fees, collection fees, attorney fees, etc. and yet you are beating yourself up? Would Nehemiah have dressed you down or your creditors? Read these scriptures again and form your own conclusions.

Yeah, that was in the Bible, but today it’s different… or is it really different?

Someone may have a hard time with recognizing there are Biblical principles involved and then translating those concepts into modern American life. I’ve even heard respected Biblical teachers say “Yeah, you can bankrupt on the debt but you still owe it.” They try to say that in virtually all circumstances a debt cannot be discharged in bankruptcy by a Christian. These well-intentioned Biblical teachers will attempt to “prove” bankruptcy is always wrong by quoting a scripture such as Psalms 37:21:

“The wicked borrow and do not repay, but the righteous give generously.”

This scripture does contrast a wicked versus a righteous heart: contrasting exploitation versus generosity.

Let’s look closely at Psalms 37 to see if it supports the proposition that Bankruptcy is wrong. The pattern emerging from the analysis of the entire Psalm is not to condemn one who has the inability to repay; instead this Psalm looks to one who “schemes” (Ps. 37:7) or “plots against the righteous” (Ps. 37:12). In other words, the Psalmist looks at those who intentionally rip-off others. There is no indication that those who are ensnared by debt cannot obtain relief. The Psalmist contrasts evil plotters and schemers with the righteous. He does not contrast those who have the inability to pay with the righteous. Therefore the scripture often cited for the proposition that those who do not repay are wicked, should more accurately be understood to say that those who plot and scheme to defraud others are wicked.

We as Christians are the first to support the government:

“…render to Caesar the things that are Caesar’s; and to God the things that are God’s.” (Mt. 22:21) We stand for law and order. That being the case, some pastors will assert that it is sinful to modify a contract and leave a debt unpaid in Bankruptcy Court. Let’s look at that issue, by looking at the founding of our country.

We typically think of the beginning of our country as July 4, 1776, with the Declaration of Independence. It was on that date that thirteen colonies, from Maine to Georgia, banded together to revolt against a common Sovereign, Great Britain. There was, with the Declaration, the beginning of the beginning, but those colonies were not unified.

Let’s look at a timeline to put matters into perspective:

These several critical dates in the birth of the United States that are relevant to our consideration:

July 1, 1776 – Declaration of Independence

December 12, 1776 – Third Continental Congress convenes

November 11, 1777 – Articles of Confederation proposed

March 1, 1781 – Articles of Confederation – ratified

February 2, 1783 – English declare hostilities ended

April 11, 1783 – America declares hostilities ended

January 14, 1784 – Treaty of Paris, Revolutionary War officially ends

May 25, 1787 – Constitutional Convention opens in Philadelphia

September 17, 1787 – Final Draft of Constitution

June 21, 1788 – Constitution ratified

May 4, 1788 – The United States Constitution goes into effect.

At first the thirteen Colonies were independent from each other, but during the course of the Revolutionary War they joined together under the Articles of Confederation. As Colonies they each acted in their self-interest. Under the Articles there were aspects where each colony cooperated with each other but there was still self-interest that made it difficult for consolidated effort to be made.

For example, the Continental Congress depended on the Colonies to raise their respective militias to be brought forward for the Revolutionary War. Also, the Continental paper dollar was considered worthless when it was not backed by gold reserves.

After the war, trade was tough. Imagine if you were a tobacco farmer in North Carolina and you wanted to sell your crop and buy a plow. You might load your wagon, go into Virginia, and pay a toll and tariff as you went from colony to colony. You might pass from Virginia to Maryland, to Pennsylvania, New Jersey, then New York. In New York you could sell your crop but there was no simple national currency. You might go to New York to buy a bank bond, and travel to Philadelphia to cash the bond, and then double back to Valley Forge to buy a plow. Then you would be taxed and tarriffed all the way back to North Carolina. This example is a hypothetical, but it illustrates a type of problem that one might see under the Articles of Confederation. This was no way to form a Nation so the push was on to have a central Federal government that was controlled by the Constitution.

Under the terms of the Constitution, the states delegated some of their rights to the central federal government. From the time of the Declaration of Independence to 11 ½ years later when the Constitution went into effect, those 13 little independent British Colonies were transformed into group of states with a central government, the United States government.

By each state agreeing to be bound by the Constitution, each state agreed to yield rights from itself to the new federal government. So in other words, the states agreed, among other things, that their state contract law could be modified by federal Bankruptcy law. In the Constitution Article 1, Section 8 enumerates the Powers of Congress. Included in the enumerated powers of Congress was the power of Congress to create uniform Bankruptcy laws. This is crucial for the reader to comprehend. When the Constitution was ratified it transformed the nature of contracts. Before ratification a contract was a property right to be interpreted under each State’s law. However, after ratification the right of the holder of the contract had a contract that could be modified under Federal Bankruptcy Law (U.S. Constitution, Article I, Section 8, Clause 4). Following ratification of the Constitution, over 200 years now, each party of a contract understands that the terms of a contract may be modified if the bankruptcy conditions set by Congress in the bankruptcy code are satisfied. For example, for years Heilig-Meyers Furniture Company was a creditor in Bankruptcy Court. Eventually, Heilig-Meyers became a debtor. Each party to a contract might be a creditor in a case then a debtor in a later bankruptcy case. In either event, each party to the contract negotiates the contract with that understanding.

Imagine if a bank opened a credit card operation in South Dakota where it is a responsible corporate citizen. The legislature in South Dakota might pass favorable legislation for that bank which authorized it to issue very favorable credit card terms, but

those terms might not be well received in Tennessee. Under the state law of South Dakota, a lender might be allowed to raise a credit card interest rate so that the borrower might owe 30% interest. The borrower might struggle to pay off that card at 30% interest. He might find himself in my office saying he cannot afford the credit card. He might ask me whether there is there any law that would allow him to pay less than the full principal balance plus 30% interest. I then might say, yes. There is a special court set up that triggers special laws to modify interest rates and modify the amount of principal to be repaid. That is the United States Bankruptcy Court. That court allows federal law to modify state law contracts. That federal law is authorized by the U.S. Constitution.

You may be a bit bewildered at how this is possible. Let me give you an example. Let’s suppose that you and I met in the tallest building in your downtown area and we decided to leave and rendezvous 30 miles away. You agreed to drive on the surface streets and abide to the speed limits and traffic rules under State law. You might average 30 miles per hour and you would reach your destination in an hour. I, on the other hand, might choose to take advantage of Federal law and take the Interstate. I might average 60 miles per hour and get there in 30 minutes. You take twice as long as me. Have either one of us done anything wrong? You drive at 30; I drive at 60. You use State law; I use Federal law. Each law was available to each of us, yet we have entirely different outcomes. Neither has done anything wrong. We have simply made separate choices.

What is the difference between speed limits and contractual interest rates? In either circumstance, Federal law might dictate a more advantageous outcome.

You might respond there is a moral difference because in the interest rate example there is a “promise” to pay whatever the interest rate may be. I submit that is irrelevant.

I might “promise” the speed limit is 30 mph but yet under special circumstances it could be criminal for you to drive the speed limit. There can be a change of circumstances that arise that render you unable to drive the 30 mph speed limit. For example you would have to slow down or stop for: adverse weather; auto accidents; road construction; a parade; a funeral; natural disaster; police intervention and directions; active school zones; or a traffic snarl. Even though I “promised” you could drive the speed limit, you might encounter an extraordinary circumstance that mandated you do something else. In fact the State controlled surface streets might be so bogged down that you might change your mind and go onto the Federal interstate and breeze along to your destination. You may then marvel at yourself and ask what took you so long to get around to helping yourself!

In a similar fashion when circumstances arise in the course of human events, you may have encountered extraordinary circumstances that mandate you no longer use State law but you use Federal law instead. Circumstances might mandate you use Federal Bankruptcy law to modify your legal obligations initially defined under State law.

By the powers granted to Congress it has the authority to enact Bankruptcy law that supersedes State contract law. You have the right to apply to the Bankruptcy court to see if you qualify for Federal law relief under the Bankruptcy Code.

The Bible contemplates such an outcome. We are ordered to abide by the law:

“Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and he will commend you. For he is God's servant to do you good. But if you do wrong, be afraid, for he does not bear the sword for nothing. He is God's servant, an agent of wrath to bring punishment on the wrongdoer.” (Romans 13:1-4)

This passage is explicit. It is the Sovereign God himself who establishes the law making authorities. (Rom. 13:1). Anyone who resists those authorities resists God’s ordinances (Rom. 13:2). For that resistance they receive condemnation from God (Id). God has given those laws for your Good . (Rom. 13:4) Therefore when a Federal Bankruptcy Judge considers your petition for Bankruptcy relief and deems you worthy of that grace, the Court is God’s servant, “a minister of God”. (Rom 13:4) Your duty as a Christian is to accept God’s grace.

The Sovereign God has provided a way for you to cope with these bills in this place and time of history, by a legal means. It is up to you to accept this opportunity He has given to you. God has provided through the Bankruptcy court a balance point between the justice that creditors want and the mercy that debtors need. The balance between justice and mercy is what He requires of each of us:

“He has showed you, O man, what is good. And what does the Lord require of you? To act justly and love mercy and to walk humbly with your God.” (Micah 6:8)

In summary, it does not seem that it is accurate to assume that to file Bankruptcy is a sin. God created a government for the Jews in which financial oppression was disallowed. In the Bible, when His people violated those principles, He judged those people and allowed the Jews to be taken into slavery. Instead of trusting in God, the Jews trusted in their business model and turned away from His principles to their own.

The United States has a Constitution where each state has granted some of its rights to the Federal government. Among those rights is the power of the Federal government to create Bankruptcy law. Bankruptcy law is given by God for our good.

God gives us government to produce ordinances for our good. To resist those ordinances is to resist God. Our call is to simultaneously do justice, and show mercy, while walking humbly before God. Anything short of that is sin. Filing Bankruptcy is not sin. It is God’s mechanism to maintain civil order while balancing justice and mercy.

Ken Rannick

Chattanooga, Tennessee

Permission is granted by the Author to reprint this in its entirety or in part provided full attribution to the Author is given.

Who Benefits the Most from Chapter 13 Bankruptcy?

Wed, 19 Oct 2022 18:14:00 GMT

If bankruptcy is your only hope of getting out from under a mountain of debt that’s grown too large for you to pay, you have one more big question to ask yourself. Should you file for Chapter 7 or Chapter 13 bankruptcy? Most assume Chapter 7 is the appropriate choice for consumer bankruptcy, but some benefit more from filing for Chapter 13 bankruptcy.

What is Chapter 13 Bankruptcy?

According to Bankruptcy Code, Chapter 13 bankruptcy provides for the adjustment of debts for an individual with regular income. Chapter 13 (also called a wage earner’s plan) allows petitioners to keep their property and pay their debts over time (typically three to five years).

Who Should File Chapter 13 Bankruptcy:

Chapter 13 bankruptcy is designed for petitioners with a regular income to enable them to cope with overwhelming debts.

What Are the Advantages of Chapter 13 Bankruptcy?

Filing Chapter 13 to Stop Foreclosure Proceedings:

Chapter 13 offers individuals some advantages over Chapter 7’s liquidation process. For many, the most significant advantage of chapter 13 is that it offers an opportunity to save your home from foreclosure. By filing Chapter 13 bankruptcy , homeowners can stop foreclosure proceedings and use the three to five-year repayment period to cure their delinquent mortgage payments. Filing Chapter 13 doesn’t give homeowners a pass on paying what’s due; they still have to make all their mortgage payments due during the chapter 13 plan on time.

Filing Chapter 13 to Reschedule & Extend Other Secured Debts

Another advantage of filing Chapter 13 bankruptcy is that it offers the opportunity to reschedule other secured debts (similar to the mortgage on a primary residence), extending them across the Chapter 13 repayment play (three to five years). Rescheduling secured debts in this manner can sometimes mean a lower payment.

Filing Chapter 13 to Protect Cosigners:

Chapter 13 also has a special provision that can protect cosigners on consumer debts.

Filing Chapter 13 to Consolidate Payments:

The Chapter 13 repayment plan requires that the petitioner make plan payments to the bankruptcy trustee, acting as a consolidation loan, as the trustee then distributes the payments to the creditors. During the Chapter 13 bankruptcy, petitioners also enjoy distance from their creditors, as the bankruptcy trustee distributes all payments. The petitioners have no direct contact with their creditors while under Chapter 13 bankruptcy protection.

Determining how bankruptcy law applies to your case can be complex, and we want to help. If you have questions about bankruptcy and how filing bankruptcy could help your family, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C. Rannick P.C.

The post Who Benefits the Most from Chapter 13 Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

What You Need to Know About Credit Counseling for Your Tennessee Chapter 7 Bankruptcy

Wed, 12 Oct 2022 18:11:00 GMT

Tennessee or Georgia residents filing consumer bankruptcy must complete a consumer credit counseling course before their bankruptcy and a financial management course after their bankruptcy.

Why Am I Required to Take Courses For My Bankruptcy?

The course requirements for Georgia bankruptcy are based on the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which requires bankruptcy filers to get credit counseling from a government-approved organization within 180 days before filing. After filing for bankruptcy, Georgia petitioners must complete a financial management course. Failing to complete both courses as required can negatively affect your bankruptcy case.

Mandatory Pre-filing Credit Counseling

The pre-filing course is a general credit counseling course, and when filing Chapter 7 or Chapter 13 bankruptcy, petitioners must show their certificate as proof they completed it as required. The consumer credit counseling session is 60-90 minutes long and covers a general evaluation of your finances, options outside of bankruptcy, and your budget. The course cost is usually around $50, but the fee may be waived in cases of extreme hardship. The course is available in person, online, or by phone.

Mandatory Post-filing Course:

The post-filing (or pre-discharge) course is also mandatory. During the post-filing course, bankruptcy petitioners will go through information about budgeting, managing money, and using credit responsibly. The discharge of debt is not issued until the course is complete. Like the pre-filing credit counseling course, the post-filing course is available in person, online, or by phone and may cost anywhere from $50 to $ 100. Providers issue a certificate of completion that petitioners should hold on to in case it is needed to prove completion.

Who Provides the Credit Counseling?

Bankruptcy petitioners who must complete their mandatory courses should choose a provider from the approved debtor education list. Bankruptcy petitioners must take the courses from an approved provider in the judicial district handling their bankruptcy. If you aren’t sure which provider to use or how to schedule your mandatory pre-filing or post-filing credit counseling and financial management courses, discuss the options with an experienced local bankruptcy attorney.

If you need to discuss getting out of debt, or you need to talk about mandatory credit counseling for your bankruptcy, get in touch with Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney . You are in good hands with Kenneth C. Rannick P.C.

The post What You Need to Know About Credit Counseling for Your Tennessee Chapter 7 Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

How to Deal with Wage Garnishment in Georgia

Wed, 05 Oct 2022 18:08:00 GMT

Are you facing wage garnishment? If so, you likely feel overwhelmed and frustrated because you don’t think you have any good options. Thankfully, you do have legal options that can make a big difference.

What is Wage Garnishment?

Wage garnishment is a legal procedure in which court order can direct an individual’s earnings to be withheld by their employer to pay a debt.

Can You Stop Wage Garnishment in Georgia?

If your wages are about to be garnished, or you are afraid that someone may soon decide to garnish your wages, consider filing bankruptcy . Considered a last resort by some because it creates a record on your credit report, bankruptcy is often the most efficient response to wage garnishment.

How Does Bankruptcy Stop Georgia Wage Garnishment?

When a petitioner files bankruptcy, the automatic stay automatically goes into effect, prohibiting all creditors from taking action to collect on the debts included in the bankruptcy filing. More specifically, the automatic stay stops the wage garnishment in its tracks without any questions.

How Does the Automatic Stay Stop My Creditors?

Bankruptcy’s Automatic Stay prevents creditors from pursuing any collective action for debts you listed in the bankruptcy, including garnishing wages. Once the bankruptcy petition is filed, you receive a case number, and the automatic stay goes into effect. Creditors immediately lose the right to pursue payment, garnish wages, etc.

When is Bankruptcy the Best Option?

If you aren’t sure if bankruptcy would be a good decision for your situation, discuss your financial state, any wage garnishments, etc., with an experienced local bankruptcy attorney . With an advocate who understands bankruptcy law at your disposal, you can determine the best option for handling a wage garnishment.

If you have questions about wage garnishment or need to discuss filing bankruptcy in Tennessee or Georgia, don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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How Can Chapter 13 Bankruptcy Get You Out of Debt?

Wed, 28 Sep 2022 18:04:00 GMT

If you’re considering filing bankruptcy, don’t automatically assume that Chapter 7 bankruptcy is the only option. For some, Chapter 13 bankruptcy may be a better solution.

What is Chapter 13 Bankruptcy?

With Chapter 13 bankruptcy , you submit a repayment plan to the bankruptcy court. The plan outlines how you intend to repay your debts over the designated repayment period (from three to five years). Chapter 13 bankruptcy plans are based on the petitioner’s household income and expenses. Expenses considered during a Chapter 13 bankruptcy include standard costs like food, utilities, taxes, and medical care. Once the bankruptcy court approves the Chapter 13 repayment plan, the petitioner makes their payments as agreed for the whole three to five-year period. If they make all their regular payments according to the bankruptcy court-approved repayment plan, the court may discharge most or all of the remaining debt.

How Does Chapter 13 Bankruptcy Help with Debt?

For some, a Chapter 13 bankruptcy can be the legal tool that puts them on a clear path to debt-free. The bankruptcy court-approved repayment plan is like a customized road map to paying off debt. Chapter 13 helps petitioners restructure their debts with one bimonthly or monthly payment fulfilling their liability. The amount of the Chapter 13 payment is determined by considering numerous factors: any required tax payments, household income, cost of living expenses, and the total of all eligible debts.

Chapter 13 Bankruptcy: The Debts You Pay Off

During a Chapter 13 bankruptcy, all debts are not treated equally. Some debts may not receive full payment. Under Chapter 13 bankruptcy, debts are split into three categories: Priority, Secured, and Unsecured.

What is a Priority Debt?

Priority debts are paid off during the Chapter 13 repayment plan with some exceptions. Some examples include back taxes, past due child support, past due spousal support, etc.

What Are Secured Debts?

Secured debts are debts that are backed by collateral. For some secured loans, you may be required to pay back the value of the collateral (the item backing the loan) or the total value of the debt. An experienced attorney can help you determine how your secured debts could be treated.

What Are Unsecured Debts?

Unsecured debts are mainly credit card balances but also include personal loans and medical bills. Unsecured debts are last in line for payment during a Chapter 13 repayment plan. Many do not receive full payment under the terms of the bankruptcy. When an unsecured debt is not paid in full by the end of the agreed on Chapter 13 repayment plan, the remaining debt is discharged.

If you are filing bankruptcy in Georgia or Tennessee and have questions about how bankruptcy can help with tax debt, contact Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Bankruptcy FAQ: Why Did I Get a Letter for a Post-Petition Liability?

Wed, 21 Sep 2022 07:08:00 GMT

Did you receive a letter for a post-petition liability? What is a post-petition liability, and what should you do about it?

What is Post-Petition Debt or Post-Petition Liability?

Any debt acquired after you file your bankruptcy petition is post-petition debt or a post-petition liability. Post-petition debt is not included in the bankruptcy discharge.

Did I Forget to Include a Debt in My Bankruptcy Petition?

When filing bankruptcy, the Bankruptcy Court requires you to list all liabilities (and everyone you owe money to) in the petition. Sometimes a bankruptcy petitioner forgets a debt or creditor when they file, but this isn’t the same as a post-petition liability. When you forget to include a debt in your bankruptcy petition, you can amend the bankruptcy papers to add a creditor for a minimal fee while the bankruptcy is still in process. Sometimes, a bankruptcy petitioner may forget about the creditor entirely until after the discharge is received. If a general unsecured creditor comes forward after you receive your discharge (and that creditor would not have had a valid basis to object to bankruptcy discharge had it received notice of the filing), the discharge of debts you received from the court is generally good against that creditor as well.

A Post-Petition Liability or Debt is Different than a Forgotten Creditor

A Chapter 7 case starts when you file a “petition” at the Bankruptcy Court. Everything that happens before you file your case is called “pre-petition.” Everything that happens after that is “post-petition.” So debts you acquired before you filed are pre-petition debts, and debts you acquire after you file your petition are post-petition debts. Your bankruptcy does not deal with debts that become due after you file your bankruptcy petition (also known as post-petition debts). The debt you acquire after you file bankruptcy is not discharged in bankruptcy . For a debt to be included in a bankruptcy discharge, it must exist when the bankruptcy is filed.

The post Bankruptcy FAQ: Why Did I Get a Letter for a Post-Petition Liability? appeared first on Kenneth C. Rannick, P.C. .

Can I File Bankruptcy If My Spouse Refuses to File?

Wed, 14 Sep 2022 07:05:00 GMT

If your spouse refuses to file bankruptcy with you, you can still file. However, there are some factors you should consider first.

Married, But Filing Bankruptcy Without Your Spouse:

Can one partner in a marriage file bankruptcy? Should one spouse file, or should the couple file jointly? If only one spouse files are the benefits and protections of bankruptcy limited? The answers to these questions can vary depending on each unique scenario. Before filing bankruptcy without your spouse, consider the laws in your state and the state of your finances. Before proceeding, it would be wise to consult a local bankruptcy attorney to get their advice on the situation. However, the simple answer is yes; one spouse can file for bankruptcy.

Is One Spouse Filing Bankruptcy Advisable?

While one spouse can file bankruptcy alone – it’s not often advisable unless their partner has little or no debt. The law does not prevent one spouse from filing while the other spouse does not file, but whether it is a wise choice or not is debatable. When you are considering filing bankruptcy without your spouse, there are several factors you should consider, including state law, the status of your finances, and how these two will engage during your bankruptcy.

When Filing Bankruptcy Without Your Spouse Could be a Good Idea:

Filing bankruptcy without your spouse may be a good idea when all the debt for a married couple is in one spouse’s name. If all the debt is associated with just one partner in a marriage, the other spouse is debt free. In this particular scenario, it could make perfect sense for the one partner in the marriage with debt associated with their name to file bankruptcy.

Reasons it May Be a Good Idea for One Spouse in a Marriage to File Bankruptcy Alone:

Benefits of Filing Bankruptcy Without Your Spouse:

In cases where the debt is only in one spouse’s name, filing without the debt-free spouse will usually protect the debt-free spouse’s credit score. There could be some ripple effects from the spouse’s bankruptcy filing, particularly if there are joint assets and the filing makes it hard or impossible to stay current on the associated debts. However, when one spouse files bankruptcy, the non-filing spouse remains liable for debts discharged in bankruptcy for the filing spouse.

If you need to discuss getting out of debt, or you need to talk about filing bankruptcy without your spouse, get in touch with Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. You are in good hands with Kenneth C. Rannick P.C.

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Do I Have to Appear in Court to File for Bankruptcy?

Wed, 07 Sep 2022 07:01:00 GMT

Most bankruptcy petitioners do not attend a formal court proceeding before a judge during the bankruptcy process. In rare cases, this may be necessary, but for most, the only visit to the court is when filing the bankruptcy paperwork with the court clerk. And if you work with an experienced bankruptcy attorney, your attorney files the bankruptcy petition for you.

But What About the Meeting of Creditors?

All bankruptcy filers must attend a 341 hearing, also called a meeting of creditors, but this is not a formal proceeding and is not held in a courtroom before a bankruptcy judge. Some meetings of the creditors are held outside the courthouse or even virtually.

What Happens at the Meeting of the Creditors?

Don’t assume that the same things you associate with attending a formal federal court proceeding apply to the creditors’ meeting. The meeting of the creditors (or 341 hearing) is mandatory for all bankruptcy filers. However, it does not occur in a courtroom and is not as scary as the name may indicate. In most bankruptcy cases, no creditors even show up for the meeting of the creditors.

Don’t Avoid Bankruptcy to Avoid Going to Court

If concerns about being required to go to court are preventing you from filing bankruptcy, reach out to an experienced Tennessee and Georgia bankruptcy attorney to discuss the situation. In some cases, you could be required to go to court, but a vast majority of filers never see the inside of a courtroom. Please don’t let worries about having to go to federal court keep you from filing for the protections of bankruptcy and getting the debt relief that you need. Reach out to an experienced bankruptcy attorney in your local area to learn more about the process.

What Rare Situations Will Result in a Court Appearance During Bankruptcy?

In a rare situation, a bankruptcy petitioner could be required to attend a courtroom proceeding. A courtroom appearance during a bankruptcy filing only becomes necessary if specific issues arise during the case (but even when these issues do arise, they can usually be addressed and resolved outside of the courtroom). The bankruptcy process can be complex, but it is not generally as adversarial as lawsuits in other practice areas or cases in criminal court. The bankruptcy process is a legal process designed to protect individuals and families who cannot meet their financial obligations, and seeking the relief it provides is not seen as an act against the court. The court is there to oversee the legal process and identify any problems.

If you have questions about court appearances during bankruptcy or need to discuss the details about filing bankruptcy in Tennessee or Georgia, don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Bankruptcy FAQ: Will Bankruptcy Get Rid of Tax Debt?

Wed, 31 Aug 2022 06:58:00 GMT

When you have a past due balance with the IRS that you cannot pay, bankruptcy may be the only option.

When You Don’t Have the Money to Cover Past Due Federal Taxes:

When you don’t have enough readily available cash to pay your past due federal taxes, you may feel like you are in an impossible spot; left with no options. However, there you aren’t left to your own devices. When you need to pay a past due balance to the IRS, you may benefit from an IRS payment plan or an offer in compromise negotiated directly with the IRS. If neither option is viable, you may want to discuss the possible benefits of bankruptcy with an experienced attorney.

Bankruptcy and Getting Rid of Tax Debt:

Most taxes cannot b eliminated through bankruptcy, but some can. Reach out to an experienced local bankruptcy attorney to review your case and see if your tax debt may be eligible. In some cases, filing Chapter 7 bankruptcy could include qualifying past due balances with the IRS if your tax debt is eligible for discharge.

Can Your Tax Debt be Eliminated through Chapter 7 Bankruptcy?

Your tax debt may be eligible for Chapter 7 bankruptcy discharge if all the following conditions are met:

How Does Bankruptcy Discharge Affect Tax Debt?

If you meet all of the listed requirements, your tax debt may qualify for inclusion in a Chapter 7 bankruptcy filing. When a tax debt is included in a Chapter 7 discharge, the obligation to pay the debt is discharged, but it is not eliminated. When the obligation to pay the tax debt is eliminated, the IRS can no longer seek payment by going after the taxpayer’s income or bank account. However, it is essential to note that tax debt and liens are separate things. Tax debt is money owed to the state or federal government for past returns. A tax lien is a legal judgment against your property to satisfy a tax debt or obligation. Bankruptcy does not eliminate prior tax liens.

If you are filing bankruptcy in Georgia or Tennessee and have questions about how bankruptcy can help with tax debt, contact Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Can I Still File Bankruptcy If I Moved Recently?

Wed, 24 Aug 2022 04:44:00 GMT

If you have recently moved and you need to file bankruptcy , you may worry that there are no bankruptcy protection laws that apply to you as a new resident. Learn when and where you can file for the protection of bankruptcy after a move out of state and which exemptions you can legally use to protect your property during bankruptcy.

Can I File for Bankruptcy If I Moved Recently?

In most cases, bankruptcy is filed in the closest bankruptcy court. And the filer uses their home state’s exemption laws to determine which property is protected during bankruptcy. However, the rules are a bit more complex if you recently moved out of state. The federal court location at which a petitioner files is determined by venue rules. However, the state exemptions that apply are determined by exemption domicile rules.

Where Do You File Bankruptcy If You Recently Moved?

Filers are required to reside in the jurisdiction they file for the majority of the past 180 days. So, before filing in any specific location, a petitioner must live in that location for at least 91 days. After residing in a place for 91 days, a resident is eligible to file bankruptcy in their new area. After using the general jurisdiction rule to determine where to file your bankruptcy, you still need to determine which state’s laws will be used to determine your bankruptcy exemptions, which protect your property.

Which Exemptions Apply to Your Bankruptcy Case After a Recent Move?

During bankruptcy, you don’t lose everything you own. Bankruptcy exemption laws are in place to create protections for specific types and amounts of property. If you recently moved before filing bankruptcy, the court will consider where you “domiciled” before filing to determine which state’s exemptions laws apply to the bankruptcy case.

Determining Your Domicile for Bankruptcy Exemptions:

A filer’s domicile is the place they consider their permanent residence. For example, where you are registered to vote, where you pay taxes, and where you intend to set down roots to create a permanent home. In most cases, an individual’s domicile is where they currently live, but this isn’t always the case. For instance, if you live in California but are temporarily relocated to Tennessee for a work project, your domicile is still California for the purposes of determining bankruptcy exemptions.

The 730-Day and 180-Day Rules:

The 730-Day Rule: If you have been domiciled in the current state for a 730-day (two-year) period before filing bankruptcy, you can use that state’s exemption system. If you file bankruptcy and haven’t lived in the same state for 730 days, the 180-Day Rule applies.
The 180-Day Rule: If you didn’t “domicile” in the same state for the 730 days preceding bankruptcy, you must use the bankruptcy exemptions for the state you lived in for the better part of the 180 days prior preceding the 720 days before you filed bankruptcy.

The 730-Day and 180-Day rules are intended to keep people from moving to a particular state to access advantageous bankruptcy exemptions. The bankruptcy code offers a solution if the rules result in a bankruptcy petitioner not being eligible for any state’s exemptions. Petitioners ineligible for any state’s bankruptcy exemptions based on the 730-Day and 180-Day rules can elect to file using federal exemptions.

Determining how bankruptcy law will apply to your case can be complex, and we want to help. If you have questions about bankruptcy and how filing bankruptcy could help your family, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C. Rannick P.C.

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Many Expect More Bankruptcies than Normal in 2022

Wed, 17 Aug 2022 04:42:00 GMT

Did you know that in the U.S., the number of bankruptcies is rising at an alarming rate? In the last two decades, we’ve seen a shocking increase in Americans who cannot manage their debt without help from bankruptcy law. As public platforms increase awareness of bankruptcy statistics, more people are aware of their options.

Shocking Bankruptcy Statistics Paint a Picture of a Nation Struggling with Debt:

What is Leaving So Many Americans Struggling with Debt?

In the United States, general bankruptcy statistics indicate that 62% of personal bankruptcies are filed due to medical expenses, close to ⅔ of all bankruptcies. Interestingly enough, the same study revealed that 72% of bankruptcy filings were for people who held some health insurance coverage. According to the reports, people suffering from a rare disease or serious illness are often left with hundreds of thousands of dollars in medical bills – the type of medical bills that wipe out savings, college funds, and modest family inheritances and leave people with little to no options outside of declaring bankruptcy. Additionally, as technological advances continue to grow exponentially, healthcare costs also increase, leaving medical expenses at an all-time high.

Reckless Spending Accounts for Only 5% of Bankruptcy Filings:

While 26% of Americans between 18 and 64 struggle to pay some form of medical bill, the high percentage of bankruptcies due to medical bills isn’t surprising. However, the low rate of bankruptcies due to reckless spending is astonishing at only 5%. While reckless spending may not be the leading cause of bankruptcy, it is still notable that 5% of bankruptcies are avoidable, mainly because some Americans spend beyond their means intending to file for a discharge of debt. However, it’s important to note that this situation applies to a minimal number of bankruptcy petitioners. The majority of petitioners are seeking assistance for legitimate reasons.

If you need to discuss getting out of debt , or you need to talk about obtaining a discharge of debt through bankruptcy, get in touch with Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. You are in good hands with Kenneth C. Rannick P.C.

The post Many Expect More Bankruptcies than Normal in 2022 appeared first on Kenneth C. Rannick, P.C. .

Can I Be Discriminated Against for Filing Bankruptcy?

Wed, 10 Aug 2022 04:38:00 GMT

Federal laws against bankruptcy discrimination were introduced in 1971 when the U.S. Supreme Court decided the Perez v. Campbell case.

Details of the Case: Perez v. Campbell

In Perez v. Campbell, the plaintiff argued that the state could not deny a person a driver’s license based on an unpaid court judgment included in a bankruptcy discharge. Perez won the case. The Perez v. Campbell ruling prompted the U.S. Congress to make federal law 11 U.S.C. section 525, a more general ban prohibiting the government (and private employers) from discriminating based on bankruptcy .

Protection from Government Bankruptcy Discrimination:

Federal bankruptcy nondiscrimination laws protect filers from discrimination based on their filing. The law prohibits various forms of government discrimination against bankruptcy petitioners:

The courts have shown a history of interpreting this ban broadly. The same U.S. Code provision prohibits the government from discriminating against anyone for associating with a bankruptcy petitioner. The protection offered to associates of bankruptcy petitioners potentially protects family members, business partners, etc.

Protection from Job Loss Due to Bankruptcy Discrimination:

Can your employer fire you for filing bankruptcy? No, employers are prohibited from discriminating against bankruptcy filers by the same federal statute that bans the government from actively discriminating based on bankruptcy. The law prohibits various types of bankruptcy-based discrimination in the workplace:

If you have experienced discrimination based on your bankruptcy or need to discuss the details about filing bankruptcy in Tennessee or Georgia, don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee and Georgia bankruptcy attorney . We help good people through bad times.

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3 Tips for a Successful Bankruptcy

Wed, 03 Aug 2022 04:34:00 GMT

Filing bankruptcy is not a joke, and it’s not a decision you make in passing. The benefits of bankruptcy are long-lasting and essential to many consumers stuck in impossible financial situations. However, the consequences of bankruptcy are also not easily dismissed. If you are in an impossible financial crisis and can’t see a way out other than bankruptcy, make sure you get the most out of the situation with these tips for a successful bankruptcy case.

3 Tips for a Successful Bankruptcy Filing:

The Importance of Being Honest During Bankruptcy:

During a bankruptcy filing, it’s essential to be honest with yourself. It’s equally important that you’re also honest with your attorney, the bankruptcy court, and others involved in the bankruptcy. Full disclosure of your assets and liabilities in the statement of financial affairs you provide your attorney is an essential first step in any successful bankruptcy case. With a clear (and honest) picture of your financial situation, your experienced bankruptcy attorney can provide you with the best-recommended course of action, help you understand your rights and obligations, and how the bankruptcy law applies in your specific situation. Honesty continues to be essential throughout the entire bankruptcy case, not only to help the case proceed smoothly but to avoid the consequences of dishonesty during bankruptcy. Hiding assets, “forgetting to include assets” in bankruptcy, lying to the bankruptcy judge, etc., can all have serious consequences. No one wants to see their bankruptcy case dismissed, and no one wants to face the penalties for perjury.

The Importance of Being Informed During Bankruptcy:

Before diving into a bankruptcy filing, do your research. Know the differences between Chapter 7 and Chapter 13 bankruptcy . Consider how each would affect your life and suit your lifestyle. If you’d like to learn more about bankruptcy and aren’t sure where to start, consider seeking info from the American Bankruptcy Institute (ABI) or the National Association of Consumer Bankruptcy Attorneys (NACBA). Both are reputable resources for general information. Follow up the general info by seeking the opinion of an experienced local attorney. While bankruptcy law is federal, each jurisdiction is different, so judges may have local rules, and the trustees may use different procedures in cases under their jurisdiction.

Why Is it So Important to Listen to Your Attorney’s Advice During Bankruptcy?

Being honest and staying informed contribute significantly to a successful bankruptcy case, but the final element is a local bankruptcy attorney. However, working with an attorney isn’t very helpful unless you follow your attorney’s counsel. Bankruptcy law is very specific. The bankruptcy process includes obstacles and sticky spots that must be avoided or efficiently managed. Timing is often essential, and seemingly pointless paperwork or actions may be mandatory requirements that mean the difference between a discharge of debt and a dismissal of the bankruptcy case. If you aren’t sure about something, don’t just assume it’s not essential. Just ask your attorney for clarification. If your bankruptcy attorney requested it, it’s safer to assume they did so for a reason.

If you are filing bankruptcy in Georgia or Tennessee and have questions about the bankruptcy process, contact Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Can a High Income-Earner Qualify for Chapter 7 Bankruptcy in Georgia?

Wed, 27 Jul 2022 16:34:00 GMT

If you are a high-income earner in Georgia or Tennessee facing financial hardship, you may feel like you have no options, but it’s not true. Many high-income earners face financial hardship, more than ever following the pandemic. If you are struggling to meet your financial responsibilities, you may qualify for Chapter 7 bankruptcy.

What Does Chapter 7 Bankruptcy Include?

When filing Chapter 7 bankruptcy in Georgia or Tennessee, you can expect to discharge most unsecured debts . Discharging an unsecured debt means you are no longer liable for repaying the creditor. Various “debts” fall into the unsecured debt category, including:

Other types of debts may not be dischargeable in bankruptcy. A few examples of nondischargeable debt include:

While filing Chapter 7 bankruptcy does not guarantee that all your unsecured debts will be discharged, it has the potential to offer a massive amount of relief. However, as a higher-income earner, you could have difficulty qualifying to file.

How to Qualify to File Chapter 7 Bankruptcy:

To qualify to file for Chapter 7 bankruptcy , you must pass the means test. The means test calculates your average income (using the past six months). The average income must be lower than the state’s median income for a matching household size to qualify to file Chapter 7. High-income earners may exceed the average income, but expenses are also considered. Deducting expenses can demonstrate that there is insufficient disposable income to repay your creditors. Allowable deductions include healthcare, mortgages, taxes, childcare, car payments, nonexempt property, mandatory retirement contributions, charitable contributions, and education costs for dependents.

Qualifying for Chapter 7 Bankruptcy Based on No Discretionary Income:

High-income earners in Tennessee and Georgia may find that they qualify for Chapter 7 bankruptcy once their expenses are taken into consideration alongside their income. If you seek to qualify for Chapter 7 bankruptcy as a high-income earner, avoid purchasing any luxury items or unnecessary services to demonstrate to the court that you are filing bankruptcy in good faith.

We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and how filing bankruptcy could help your family, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C. Rannick P.C.

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Can a Bankruptcy Attorney Stop My Car From Getting Repossessed?

Wed, 20 Jul 2022 16:32:00 GMT

Are you behind on your car payments? Are you afraid your lender will repossess your vehicle? If so, you may be seriously considering reaching out to a bankruptcy attorney to stop your car from being repossessed.

Chapter 7 Can Temporarily Delay a Lender from Repossessing Your Car

If you are behind on your car payments, filing Chapter 7 bankruptcy cannot prevent a vehicle repossession permanently. However, Chapter 7 can create a temporary delay to create a chance to take action for a more permanent solution.

Chapter 7 & the Automatic Stay:

The automatic stay is issued immediately upon filing Chapter 7 bankruptcy. The automatic stay is essential for those facing a car repossession because the automatic stay prevents creditors from continuing their collection activities. Lenders are prohibited from taking any action seeking payment of the debts associated with the bankruptcy, including repossession. To continue with the repossession process, the auto lender must get the court’s approval first. However, the Chapter bankruptcy process is generally quick (most Chapter 7 bankruptcies take only months). Once the bankruptcy case is closed, the automatic stay is no longer in effect, and the lender would be free to take action.

Why Would the Court Give the Lender Permission to Repossess During Chapter 7 Bankruptcy?

In some cases, Chapter 7 bankruptcy’s automatic stay won’t be able to prevent a car repossession throughout the entirety of the bankruptcy case. The lender may decide to seek court permission to repossess the vehicle during the bankruptcy with a motion to lift the automatic stay. In most cases, the judge will grant this request unless the filer can show they are making payments and attempting to catch up on past due payments.

What to Do to Avoid Car Repossession After Your Chapter 7 Bankruptcy Case is Closed:

Filing Chapter 7 bankruptcy can give you the time to negotiate new loan terms with the lender. Doing so could allow you to avoid repossession and keep your car. When a borrower is in the midst of bankruptcy, the lender knows that a bankruptcy discharge wipes out the personal liability for the loan. While it does not negate the lien held by the lender, it does limit their options. After a bankruptcy discharge is received, repossession is the only option left to a lender. Knowing this usually gives lenders an incentive to renegotiate new loan terms (especially if you owe more on the vehicle than it is worth). Consider negotiating for a reduced balance or lower interest rate. You may need to reaffirm the loan if you are successful in the negotiations.

Chapter 7’s automatic stay allows you to bring your loan current or “cure the default.” If you can bring the loan current, the lender no longer has cause to repossess; they would prefer you keep it and continue making payments as they make more money that way.

Filing Chapter 7 bankruptcy allows you to wipe out the lien by redeeming the vehicle. Buying back the car at its fair market value from the lender can wipe out the lender’s lien. Redeeming a car can mean saving significant money if the vehicle is worth less than the loan balance. However, redemption is only possible if the bankruptcy filer can make a lump sum payment to the lender, and a motion must be filed to obtain the bankruptcy court’s permission.

If you are afraid your lender will soon repossess your car, or you need to talk about obtaining a discharge of debt through bankruptcy , get in touch with Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney . You are in good hands with Kenneth C. Rannick P.C.

The post Can a Bankruptcy Attorney Stop My Car From Getting Repossessed? appeared first on Kenneth C. Rannick, P.C. .

Why Would I Want to File a Chapter 13 Bankruptcy?

Wed, 13 Jul 2022 16:29:00 GMT

Chapter 13 bankruptcy offers filers a chance to restructure their debt into a repayment plan (lasting up to five years). There are income and debt requirements to qualify, and filing a Chapter 13 bankruptcy will negatively affect your credit. So, why should you want to file a Chapter 13 bankruptcy ?

What’s So Good About a Chapter 13 Bankruptcy?

The most apparent benefits of filing for Chapter 13 bankruptcy are that the income maximum is higher than Chapter 7 bankruptcy. So, some consumers whose income exceeds the maximum for filing Chapter 7 bankruptcy can still access bankruptcy protections by filing Chapter 13 bankruptcy. The other big draw for individuals and families struggling with debt is that Chapter 13 bankruptcy allows filers to keep essential assets – like your home.

What is Chapter 13 Bankruptcy:

Often referred to as the wage earner’s bankruptcy, Chapter 13 filers need regular income to qualify. When filing Chapter 13, the debt is restructured instead of receiving a discharge of debt, and a three to five-year repayment plan is put in place through the bankruptcy court.

A Major Benefit of Filing Chapter 13 Bankruptcy: Flexibility

One of the most valuable benefits of the Chapter 13 bankruptcy repayment plan is flexibility. The options offered by this type of bankruptcy are often appreciated by steady income earners overwhelmed by debt who don’t want to lose their property during bankruptcy.

Who is Eligible to File Chapter 13 Bankruptcy?

Any Georgia or Tennessee resident interested in filing Chapter 13 bankruptcy is eligible if their total debt falls within the designated threshold and they receive a regular income. When filing for Chapter 13 bankruptcy, the individual’s income level helps determine the length of the repayment plan. If the Chapter 13 bankruptcy filer’s income exceeds the state median, debts are repaid over five years.

However, if their income falls below the state median, the Chapter 13 bankruptcy filer will repay their debt over three years.

If you have questions about filing Tennessee or Georgia Chapter 13 bankruptcy , or you need to know which type of bankruptcy is best for you, don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post Why Would I Want to File a Chapter 13 Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Does Business Bankruptcy Affect Personal Credit?

Thu, 07 Jul 2022 16:20:00 GMT

Business owners considering bankruptcy often wonder how a business bankruptcy would affect their personal credit. When business owners file a business bankruptcy, it only affects their personal credit if they are personally liable for business debts.

Are You Personally Liable for Your Business’s Debts?

Whether or not you are personally liable for your business’s debts depends on the tax liability determined by the business’s structure combined with whether you have ever signed a personal guarantee agreeing to accept responsibility for business debts. Before filing, it’s best to meet with an experienced bankruptcy attorney to make sure you understand the available options and the consequences associated with each one.

When a Sole Proprietor Files a Business Bankruptcy:

If you are a sole proprietor and file a business bankruptcy, your bankruptcy filing will appear on your credit file. Filing business bankruptcy as a sole proprietor could harm your personal credit score. When set up as a sole proprietor, bankruptcy law and tax law both consider you and your business as the same entity, so attempting to eliminate or pay off your business debts through Chapter 7 or Chapter 13 bankruptcy will leave a record of the bankruptcy on your personal credit report for up to 10 years.

When a General Partnership Business Files a Business Bankruptcy:

If your business is set up as a general partnership, the ramifications of a business bankruptcy get a bit more interesting. When there is a general partnership in place, each partner is personally responsible for paying back business debts. If one (or both) partner/s fails to pay back business debts, the creditor can choose to report the accounts as past due on the personal credit reports of both partners. If one partner in the business decides to file a personal bankruptcy and the other chooses to file, the non-filing partner remains legally responsible for the business debts. Additionally, if personal property is liquidated to pay off business debt, the partners remain liable for debts not fully paid by the generated funds.

Some Business Structures Don’t Typically Impact Personal Credit:

Some business structures don’t generally affect the personal credit of business owners. Businesses structured as a corporation, limited liability corporation, or limited partnership separate company finances from the finances of their owners. This separation benefits those seeking to avoid feeling the consequences on their personal credit, but there are disadvantages, as well. For example, these business structures do not receive a bankruptcy discharge, and companies with this type of business structure also allow creditors to file lawsuits against the business’s owners.

Exceptions that Leave Business Owners’ Credit Feeling the Consequences:

A couple of exceptions could mean a business bankruptcy affects a business owner’s personal credit even when there is a corporation, limited liability corporation, or limited partnership in place.

If you are a small business owner in Georgia or Tennessee and are nervous about how filing bankruptcy could affect your personal credit, reach out to Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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5 Reasons Filing Bankruptcy May be the Best Idea for Your Family

Wed, 15 Jun 2022 04:53:00 GMT

Most often when people think of bankruptcy, they consider the discharge of debt – they focus on the money. However, while the purpose of filing bankruptcy is to provide a fresh financial start, provide the protections of bankruptcy to those in need, and issue a discharge of debt, there are other benefits that should probably receive more attention. Filing bankruptcy can have significant positive effects on families – and most of the benefits aren’t financial.

5 Reasons Bankruptcy Benefits Families:

1. Drastic Decrease in Stress Levels: When a family is stuck in an inescapable cycle of debt, overdraft fees, late fees, high-interest rates, and legal fees, the financial distress leads to elevated cortisol levels (which means increased stress), and in some cases, can even result in a chain reaction of health issues.

2. Positive Change: Crippling debt doesn’t just weigh a person down in one area of their life, it weighs you down in every aspect of life. The reverse is true for financial freedom. Obtaining financial freedom by getting out of debt can have significant and far-reaching positive effects on the entire family. But more than that, it creates the opportunity for positive change.

3. Better Use of Time & Money: Significantly reducing debt through Chapter 13 bankruptcy or eliminating debt altogether through Chapter 7 bankruptcy is a major positive force for a family that frees up their budget, and releases time spent struggling and worrying to dedicate to the more important things in life.

4. Improved Sleep and Improved Health: Many bankruptcy petitioners experience a positive change in their life immediately upon filing. As a result of the automatic stay of bankruptcy that goes into effect when a bankruptcy petition is filed, collectors are prohibited from contacting the debtor for payment. That means no more harassing calls, no more worrying someone filed a lawsuit every time you open the mail, no more dreading that you’ll be served if you open your front door, and no more watching for the repo-man. Basically – no more constant fear of your own debt keeping you up at night. The sudden removal of this constant stress often results in improved sleep and improved health, which is a significant benefit for the entire family.

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Which Generation has the Most Debt?

Wed, 08 Jun 2022 04:49:00 GMT

Most Americans have some type of debt – an auto loan, a mortgage, student loans, credit card balances, unpaid medical bills, etc. According to an Experian consumer debt study in which the group analyzed credit report information for a statistically relevant sampling from their database, outstanding consumer debt in the U.S. reached $14.88 trillion in 2020. That shows an increase of more than $3 trillion from the $11.32 trillion average in 2010. In 2020, the average individual debt was around $92,727. But even more interesting is that the debt burden was not spread evenly over generations.

Gen Z, Millennials, Gen X, and Baby Boomers: Who Carries the Most Debt?

Of the four “generations” that make up the current population, Gen X carries the highest average debt.

1. Gen Z (who range from ages 18 to 23): Average debt: $16,043

2. Millennials (age 24 to 40) Average debt: $87,448

3. Gen X (age 41 to 56)— Average debt: $140,643

4. Baby Boomers (age 57 to 75)— Average debt: $97,290

Problem Areas for Each Generation to Avoid:

For the Gen Z group, the average individual holds $16,043 in debt, but an eighth of that is credit card debt (the most dangerous kind of debt). The Gen Z generation should be particularly cautious carrying a balance on a credit card as they have the highest interest rates out there and create a slippery slope that can quickly lead to financial trouble. Many Millennials are purchasing their first home and having their first baby within a few years of each other – it’s important to consider the combined financial implications of these two life changes and prepare. Millennials have the least amount of give when it comes to their financial planning and debt management. Many Gen Xers are sending their kids to college and should remember that they should focus on paying off their own debt before taking out more debt to provide for their kids’ education (the kids can get financial aid for school, but Gen Xers won’t be able to apply for financial aid to fund their retirement when the day arrives). Baby Boomers tend to have a significant amount left on their mortgage, but instead of focusing on paying off the mortgage, Baby Boomers should focus on saving.

Regardless of which generational group you fall into, if you are struggling to control your debt or you need to talk about obtaining a discharge of debt through bankruptcy, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . You are in good hands with Kenneth C. Rannick P.C

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Can You Improve Your Credit Score with Rent Payments?

Wed, 01 Jun 2022 04:46:00 GMT

After filing bankruptcy and receiving your discharge of debt, it’s easy to put it behind you and enjoy a fresh start without collectors emailing and calling and texting constantly looking for payment towards old debts. However, it’s smart to take a moment and make a plan to repair your credit, so you aren’t impeded by a low credit score later. One question many ask is whether on-time rent payments will be enough to repair their credit.

Can On-Time Rent Payments Improve Your Credit Score?

If you are making on-time rent payments, it’s possible they could have a positive effect on your credit score, but it’s also possible that they will not be considered at all. Here’s a breakdown of how and why. The three major credit bureaus (Equifax, Experian, and TransUnion) include rent payment info in credit reports if they receive the data. Those credit reports created by the three major credit bureaus provide the data that goes into credit scores. There are two major credit scoring companies (FICO and VantageScore). These two vary in their handling of rent payment info. The most widely used FICO score doesn’t use rental payment information in calculating scores. Newer versions (FICO 9 and FICO 10) do consider rental payment information if it is included in a credit report. VantageScore also considers rental payment information.

Why Isn’t Your On-Time Rental History Being Reported?

While the credit reporting agencies include rental payment info in the data used by FICO and VantageScore to create credit scores – they only do so if they receive a report of the payment history. You can’t report rental payments to the credit bureaus yourself. So, who does report it?

How to Get Your On-Time Rental History Reported to the Credit Bureaus:

For some, reporting on tie rent payments is taken care of because the landlord has a rent-reporting service. If your landlord doesn’t use a rent-reporting service, you can work one yourself, but you’ll be charged a fee (often over $100 per year). If you choose to go down this road, determine which credit bureaus the rent-reporting service will report to, and which credit scores will take that info into account.

While working with a rent-reporting service is an option, it may not be the most cost-effective method of rebuilding credit after bankruptcy.

Rebuilding Your Credit Post-Bankruptcy:

Other strategies to build credit may be a more efficient choice than rent reporting because they are more all-inclusive: they influence all types of credit scores and usually report to all three of the major credit bureaus. When rebuilding your credit after a Tennessee or Georgia bankruptcy, we suggest considering becoming an authorized user on someone’s else credit card and benefiting from their good credit history, obtaining a secured credit card (which requires a deposit that serves as your credit limit), or seeking a credit-builder loan (sometimes available through local credit unions or community banks – loan payments are reported to the credit bureaus, but you only get access to the funds after you pay the loan off). You can also try to get your utility payments reported to your credit report (consider services like Experian Boost or eCredable).

If you have questions about filing Tennessee or Georgia bankruptcy , or you need to know how to rebuild your credit after filing bankruptcy, contact an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

The post Can You Improve Your Credit Score with Rent Payments? appeared first on Kenneth C. Rannick, P.C. .

Best Budgeting Apps of 2022 to Help You Get Control of Your Finances

Thu, 26 May 2022 04:45:00 GMT

When you’re hoping to get control of your finances before they are completely out of control, it’s a good idea to consider all the tools at your disposal. For many, the most efficient (and affordable) option is a good budgeting app. However, before we can identify the best budgeting apps of 2022 to help you get control of your finances , it’s best we discuss what a budgeting app is for those who don’t have any experience with them.

What is a Budgeting App?

A budgeting app is a software application used on a computer, tablet, or smartphone to track your finances. Different budgeting apps have different features, but generally speaking, a budgeting app tracks your income, expenses, savings, debt, investments, etc. Budgeting apps are typically designed for individual users to track personal finances (in comparison to business finances), and the overall goal is to improve your financial health.

What to Look for in a Budgeting App:

A good budgeting app will help you develop a better understanding of your income and your spending. With that improved understanding, you’ll develop maximum control over your finances. Many budgeting apps connect to your bank account, credit cards, etc. to automatically download transactions and separate income and expenses into categories. In doing so, the app can easily match your spending to the budget you implement in the app. Look for a budgeting app that is either free or comes at an affordable price point, and make sure integrating your accounts is simple. A good budgeting app should be easy to use and have features that suit your life and your budgeting style.

Benefits of Budgeting Apps:

Many people aren’t quite sure how much money they spend each month – and what they’re spending their money on regularly. By syncing your checking account and credit cards with a reputable budgeting app, spending history is easily organized into categories. These categories make identifying spending trends much easier so you can be aware of your own spending habits.

Best Budgeting Apps of 2022:

Mint: This very well-known budgeting app is generally recognized as the best free budgeting app currently available. For a free app, Mint offers some impressive bonus features including bill payment reminders, investment tracking, and access to your TransUnion credit score, which explains why this app is so widely used (over 25 million users).

YNAB (You Need a Budget): One of the overall best budgeting apps on the market, this app is not free, and it’s not even very affordable in comparison to some of the other options. But it still makes the list because it has such a stellar reputation for getting results for first-time budgeters. Plus, they offer a 34-day free trial.

Simplifi: Simplifi is a budgeting app made by Quicken. This app offers personalized spending plans with real-time updates advising you how much you have remaining to spend for the month. Simplifi by Quicken also tracks monthly bills and subscriptions (including the ones you don’t use or don’t know exist).

PocketGuard: PocketGuard is a budgeting app designed specifically to help control overspending. Using an algorithm, the app tracks income, expenses, and savings goals to determine how much money the user can spend in a day. With a daily spending limit, it’s easy for users that struggle with overspending to control their expenditures.

If you are overwhelmed by debt and need to discuss your options, or you need help filing bankruptcy , call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times.

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Redemption in Chapter 7 Bankruptcy: Keep Your Car But Lower the Payment

Wed, 18 May 2022 15:15:00 GMT

Chapter 7 bankruptcy is known as the liquidation bankruptcy because the bankruptcy court liquidates the petitioner’s assets to pay their creditors (with exemptions, of course). However, did you know that you can decide whether to keep or surrender your car or truck during a Chapter 7 bankruptcy?

What Happens to Your Car During a Chapter 7 Bankruptcy?

There is no motor vehicle exemption in Tennessee, but petitioners may choose to use their $10,000 wildcard exemption to exempt car equity. If you can’t protect the equity in your car with an exemption, the trustee will sell the vehicle. Suppose you aren’t current on your car loan payments when you file. In that case, the auto loan lender will likely use its lien rights to get the vehicle back by either requesting that the court lift the automatic stay to repossess the vehicle or waiting until the bankruptcy is final to repossess the vehicle. However, a couple of other options could allow you to keep your vehicle when filing for Chapter 7 bankruptcy.

What is Redemption During a Chapter 7 Bankruptcy?

If your car is valued at less than the amount you still owe on the loan, Chapter 7 bankruptcy allows you to redeem the loan by paying the vehicle’s value. You keep the vehicle free and clear when you redeem your vehicle in a Chapter 7 bankruptcy. However, to redeem a vehicle, the petitioner must provide the car’s current value in full in a single payment, which would require using money protected with a bankruptcy exemption or money earned, borrowed, or received as a gift after filing.

What is a Reaffirmation Agreement?

In some cases, Chapter 7 bankruptcy petitioners that want to keep their vehicle can do so using a reaffirmation agreement. The reaffirmation agreement allows you to keep your car during a Chapter 7 bankruptcy without doing anything outside what you already agreed to do. The Chapter 7 bankruptcy petitioner agrees that the specified auto loan is excluded from the bankruptcy by signing a reaffirmation agreement. The petitioner remains liable for the balance and payment at the same terms of the original loan agreement. The lender transfers the vehicle title when the loan is paid off. The reaffirmation agreement is a new contract that allows Chapter 7 bankruptcy petitioners to keep their car under the same terms as the original loan agreement or promissory note.

We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and what happens to your car during a Chapter 7 bankruptcy, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C. Rannick P.C.

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Is Your Debt Rising Right Alongside Gas and Housing Prices?

Wed, 11 May 2022 15:12:00 GMT

Gas prices and housing costs are rising across the nation. With the increased prices for housing and gas (as well as food, transportation, and even medical care), American families are just spending more. However, for many, the increased expenditure isn’t just a change to their bottom line; it wasn’t in the budget. So, where are they finding the additional funds?

Increased Pricing Means Higher Demands on Americans’ Incomes:

Consumers are paying more for what they are used to buying, from filling up their vehicles with gas to groceries to used vehicles. The overall higher cost of living is putting heavy demands on household incomes. In most cases, household income fails to keep up with the increasing prices.

When Income Fails to Keep Up with Increasing Prices:

For a notable portion of U.S. households, increased spending due to higher prices on necessities means increased debt; from credit card balances to auto loans, the average American household now owes approximately $155,622. Moreover, median American income dropped 3% in the last two years. In comparison, the cost of living during that same period rose almost 7% (with a significant portion of the increase due to higher housing and medical costs).

Financial Relief from the Strains of Higher Costs of Living:

About 78% of Americans have received pandemic relief in some form since March 2020. In popular polls, numbers indicate that the financial stimulus payments issued as pandemic relief went towards paying down debt, savings, or buying necessities. But despite the poll results, over ⅓ of consumers also claimed their financial situation deteriorated during the past year. After paying off $83 billion in credit card debt (a record-breaking number), American credit balances are rising again. And even more significant, student loan debt, mortgage, and auto loan balances are all on the rise. In addition, during the past year and a half, many Americans faced job loss or drastic changes to their workplace situation (decreased hours, pay cuts, loss of benefits, increased work duties, etc.) The combination of factors has left many American households struggling to stay on top of the cost of living and facing mounting credit card debt despite financial relief provided by stimulus checks and other assistance programs like expanded unemployment benefits.

Covering the Higher Costs of Living with Debt:

Some expect wage increases in 2022. In addition, the government still offers assistance in the form of increased Supplemental Nutrition Assistance Program benefits, federal assistance for renters behind on their rent, and an extended payment pause for federal student loan borrowers through May 2022. However, many are still facing a financial crunch. The average American household carrying debt is now holding a balance of $155,622 (a total of $15 trillion across the nation), which is up 6.2% compared to last year.

If the higher living costs have left you facing an impossible financial situation, and you need to discuss the benefits of filing bankruptcy , get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. You are in good hands with Kenneth C. Rannick P.C.

The post Is Your Debt Rising Right Alongside Gas and Housing Prices? appeared first on Kenneth C. Rannick, P.C. .

Can You Be Evicted During a Georgia Bankruptcy?

Wed, 04 May 2022 15:08:00 GMT

When filing bankruptcy, state and federal bankruptcy laws determine who qualifies, which debts are eligible for discharge, what counts as income, etc. For renters, one of the main concerns pertains to their living situation. For example, can a Georgia landlord evict you during a Georgia bankruptcy?

Rental Eviction and Georgia Bankruptcy:

When discussing the possibility of rental eviction during a Georgia state bankruptcy , it’s important to consider the timing of the bankruptcy filing and any eviction proceedings already in motion. When a bankruptcy is filed, an automatic stay immediately goes into effect. The automatic stay stops an eviction; a landlord cannot take eviction action when an automatic stay is in effect, preventing them from changing the locks on the property or removing the bankruptcy petitioner’s belongings from the rental property. However, there are some differences in how Georgia bankruptcy impacts a rental conviction depending on the timing.

When Can a Landlord Evict a Tenant Who Filed for Georgia Bankruptcy?

There are some instances in which a landlord may evict a tenant who is filing bankruptcy, including when a court-ordered judgment was issued before the tenant filed bankruptcy. Additionally, under Georgia law, the automatic stay does not apply to eviction proceedings if the tenant is capable of paying rent due to “cure” the eviction.

When Does Bankruptcy Protect Against Eviction in Georgia?

If the tenant files bankruptcy before the eviction judgment is issued, the landlord is prevented from proceeding with the eviction process. The landlord must go through federal bankruptcy court to attempt to have the automatic stay lifted before moving forward with the eviction. In most cases, the judge will agree to lift the automatic stay since a lease agreement does not usually impact the value of the tenant’s estate.

Also of Note: Georgia law allows landlords to refuse to accept late payments to cure evictions if the tenant already received an eviction notice within the past year.

Will Filing Georgia Bankruptcy Affect My Lease Agreement If There’s No Looming Eviction?

If a tenant who is not past due or facing eviction files for Georgia bankruptcy, the filing does not affect their tenancy.

If you have questions about filing Tennessee or Georgia bankruptcy, or you need to know how filing bankruptcy will impact your rental eviction, contact an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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How Are Public Benefits Considered When Declaring Bankruptcy?

Fri, 29 Apr 2022 15:08:00 GMT

Considering that American families depend on bankruptcy when they don’t have the financial means to cover their expenses, it’s not surprising that many potential bankruptcy filers worry about what will happen to their public benefits when they declare bankruptcy.

What is the Purpose of Bankruptcy?

When individuals file a Tennessee bankruptcy, they generally turn to one of two types of bankruptcy protection available: Chapter 7 and Chapter 13 bankruptcy. In both types of bankruptcy, the goal is to remove the burden of debt from the consumer.

How Does Chapter 7 Help Consumers Overwhelmed by Debt?

Chapter 7 bankruptcy does so by liquidating the petitioner’s assets to pay their creditors. However, some assets are exempt or protected from becoming part of the bankruptcy estate used to pay creditors.

Do Exemptions Apply When Filing Chapter 13 Bankruptcy?

Exemptions also apply to Chapter 13 bankruptcy, but they’re approached differently. Known as the reorganization bankruptcy, Chapter 13 allows petitioners to retain their assets while agreeing to repay their debts over three to five years. At the end of the payment plan period, the petitioner’s remaining debts included in the bankruptcy are discharged.

What Happens to My Public Benefits When I File for Tennessee Bankruptcy?

Tennessee does not allow the use of federal exemptions. Instead, you will have to use the state exemption scheme. When filing for bankruptcy, Tennessee has a set of exemptions that define various

eligible types of property or income that you can exempt from the bankruptcy, such as a home, a car, or a retirement account. But how does filing Tennessee bankruptcy affect common forms of public benefits in Tennessee?

FAQ: Does Tennessee bankruptcy affect my social security income?

Social security, social security disability, and supplemental security income are almost always protected during a bankruptcy filing. Under Tennessee bankruptcy exemptions , most people use Tenn. Code Ann. § 26-2-111 (1)(a) to exempt social security, public assistance, unemployment compensation, and disability benefits. For single debtors filing, it has no coverage limit. The bankruptcy filer’s social security funds are protected by an exemption as long as they’re not commingled.

If you have questions about how filing bankruptcy affects your public benefits, or you need help filing bankruptcy today, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times

The post How Are Public Benefits Considered When Declaring Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

How Much Debt is Required to File Bankruptcy?

Fri, 15 Apr 2022 09:11:00 GMT

Many different financial backgrounds and circumstances can lead to bankruptcy. No one’s situation is exactly the same. However, many bankruptcy filers do head to court for similar reasons: job loss, medical debt, and divorce being three of the most common.

How Much Debt is Too Much Debt?

Many potential bankruptcy filers ask the same questions in their initial consultation. One question many ask is how much debt is too much debt? The simple answer is if you’re questioning whether or not you have too much debt, assume you do. And take action to decrease your spending or increase your earnings, and pay off the debt. If the question is more specifically aimed at bankruptcy, it’s time to consider bankruptcy law.

How Much Debt Qualifies You to File for Bankruptcy?

Americans seeking debt relief typically turn to one of two types of bankruptcy: Chapter 7 or Chapter 13. The income and debt requirements vary between the two.

What Are the Income and Debt Requirements to File Chapter 7 Bankruptcy?

In order to qualify to file Chapter 7 bankruptcy, a petitioner’s average monthly income over the previous six months must be lower than the median income for the same-sized household in their state of residence or the petitioner can pass a “means test.” The means test considers income, debt, and expenses to determine whether the disposable income available to a petitioner is high enough to make partial payments to their unsecured creditors. If a petitioner fails the means test, they may still qualify to file Chapter 13 bankruptcy.

What Are the Income and Debt Requirements to File Chapter 13 Bankruptcy?

In order to qualify to file Chapter 13 bankruptcy, your unsecured debts (like credit cards and medical bills) must be less than $419,275, and all secured debts (like a mortgage or a car payment) must be less than $1,257,850. These limits are in effect through April 2022. (Debt limits change every three years). In addition to meeting the debt requirements, the petitioner must have sufficient income to make the monthly debt payments set out in their Chapter 13 bankruptcy plan.

If you have questions about filing Tennessee or Georgia bankruptcy and you aren’t sure if you meet the debt or income requirements, contact an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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How is Bankruptcy Reported to the Credit Agencies?

Tue, 12 Apr 2022 23:14:00 GMT

If you’re considering filing bankruptcy, you are likely already aware that the bankruptcy filing ends up on your credit report, but do you know how it gets there?

Does the Bankruptcy Court Report My Information to the Credit Bureaus?

Many assume that the three major credit bureaus (Equifax, TransUnion, and Experian) receive information from the Bankruptcy Court. However, the Bankruptcy Court has no interaction with the credit bureaus. The Bankruptcy Court does not report information on cases to the bureaus and they do not verify the accuracy of the information in connection to their cases listed with the credit bureaus.

Who Does Report Bankruptcy Information to the Credit Bureaus?

While the Bankruptcy Court does not report information to the credit bureaus, the Clerk of the Bankruptcy Court is legally required to maintain an accurate record of all filings. When a bankruptcy case is filed, the case is recorded by the Clerk and becomes part of the Court’s permanent records. With very few exceptions, Bankruptcy Court filings are public records. Any individual or organization can access public records of the Bankruptcy Court in person at the courthouse or digitally through the Public Access to Court Electronic Records (PACER). Credit bureaus generally access bankruptcy case info through PACER.

What If the Credit Bureaus Get the Bankruptcy Information Wrong?

The Bankruptcy Court does not control what the credit bureaus view on the PACER system, and doesn’t control what the credit bureaus do with the information they pull from public record. If there is an inaccuracy regarding your bankruptcy listed on your credit report, you should seek resolution directly with the credit bureau reporting the inaccurate information.

How Long Does the Bankruptcy Show Up On My Credit Report?

One of the most common questions regarding bankruptcy and post-bankruptcy credit is how long the credit bureaus will include the bankruptcy as a listing on the petitioner’s credit report. It’s not random – the Fair Credit Reporting Act actually controls the credit reporting companies. According to the law, the agencies may not report a Chapter 7 bankruptcy case after 10 years from the date the bankruptcy is filed or discharged (reference 15 U.S.C. § 1681(c)). For Chapter 13 bankruptcy, the term is limited to 7 years. No matter the status of your bankruptcy case (open, closed, discharged, or dismissed), the credit bureaus can continue to report it on your credit report for up to ten years.

If you need to file bankruptcy , and you have questions about how it will affect your credit, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . You are in good hands with Kenneth C. Rannick P.C.

The post How is Bankruptcy Reported to the Credit Agencies? appeared first on Kenneth C. Rannick, P.C. .

What to Do When Collectors Contact You After Bankruptcy

Tue, 05 Apr 2022 23:17:00 GMT

When you file bankruptcy, one of the most advantageous and quick-acting benefits is the automatic stay. The automatic stay of bankruptcy legally requires collectors to stop actions seeking payment on debts included in the bankruptcy. Once the bankruptcy discharge is issued, you are no longer liable for debts included in the bankruptcy. So, you could say that the automatic stay is simply a preview of what comes at the end of a successful bankruptcy. However, sometimes creditors don’t abide by the rules.

What To Do If You Just Filed Bankruptcy, and Creditors are Still Contacting You:

If you filed your case recently, your creditors may not have received the notice yet. The quickest way to address the situation is to answer the call, advise them that you filed bankruptcy, and give them your bankruptcy case number and the date you filed your petition. Make a note after the call, detailing the date, which creditor was calling, the name of the person you spoke to and that you provided them with your bankruptcy information.

What To Do If You Gave the Bankruptcy Court the Wrong Address for a Creditor:

If you discover that you provided the bankruptcy court with an inaccurate address for one of your creditors, you can update the address with the court. There is no filing fee to correct an address for a creditor already listed in the bankruptcy. Once you update the address, make sure to send a copy of the bankruptcy notice to the creditor at their correct address, as they likely did not receive the initial notice sent by the court. You’ll probably get the original notice returned to you as undeliverable, and you can just resend the same notice out to the creditor’s correct mailing address.

What To Do If a Creditor Keeps Contacting You Even After You Give Them Your Case Number:

Creditors should be completely aware that they are not allowed to contact you after you have provided them with your bankruptcy case number. Almost all creditors will stop collection attempts as soon as they get a bankruptcy case number. If this isn’t the case, and a creditor continues to contact you for payment even after you have provided your bankruptcy case number and information, bring the situation to the bankruptcy court’s attention. If the court discovers that the collector intentionally ignored your bankruptcy filing and keeps harassing you, they can sanction the creditor for violating bankruptcy law.

What To Do If You Realize You Forgot to List a Creditor in Your Bankruptcy Petition:

If you forgot to list a creditor completely, they won’t receive notice of your bankruptcy. If you realize you have a creditor that was not included as a creditor on your schedules, you should file an amendment adding the missing creditor. Once they are added, they will receive a copy of any future notices related to the bankruptcy. If you realize you did not include a creditor in your bankruptcy petition, and you intentionally do not add them once you discover the oversight, the balance owed to them may not be discharged. While it is important that you add any missing creditors you may discover, a creditor is still required to stop contacting you once you advise them of your bankruptcy (even if you forgot to include them on your schedules).

We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and how to get collectors to stop calling, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C. Rannick P.C.

The post What to Do When Collectors Contact You After Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

What is Wage Garnishment and How Do You Stop It?

Wed, 30 Mar 2022 09:04:00 GMT

If you are nervous that your wages are going to be garnished or if you have received a notice of wage garnishment, you know that it’s a very unsettling possibility. But do you know what wage garnishment is and did you know there are ways to stop it?

What is Wage Garnishment?

Wage garnishment is a court order requiring an individual’s employer to withhold a specific amount from an employee’s pay and instead send it directly to one of that employee’s creditors. In the majority of cases, before garnishing wages, a creditor is required to get a judgment from the court.

How Does Wage Garnishment Happen?

If a creditor (like a bank or credit card company) sues one of their debtors for nonpayment, and they win, they receive a judgment against that debtor. The judgment gives the creditor the power to request a court order for wage garnishment. If the court grants the request, that wage garnishment order is sent to the debtor’s employer.

Can You Stop Wage Garnishment?

If you receive a notice of wage garnishment, you have a few options: 1) file an exemption claim with the court, 2) attempt to negotiate a payment plan with the creditor directly, 3) challenge the wage garnishment, or 4) file bankruptcy . If the wage garnishment has already started, you can attempt to talk to your creditor and request an altered payment plan, try to challenge the judgment, etc. but you’re not in the driver’s seat. The creditor seeking a judgment is in the driver’s seat in these scenarios. If they don’t allow you to make voluntary payments in exchange for stopping the garnishment, you can’t force them. However, you do have the option to file bankruptcy to stop the garnishment.

Filing Bankruptcy to Stop Wage Garnishment:

Bankruptcy is not the right choice universally, but when your wages are being garnished, it is often the best path back toward financial health and stability. While the automatic stay that goes into effect immediately upon filing bankruptcy stops almost all wage garnishments, there are a few exceptions. Domestic support obligations are one example. Domestic support obligation wage garnishments will survive a bankruptcy filing .

If you need help filing bankruptcy, or you have questions about wage garnishment, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times.

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Bankruptcy Happens to Good People, Too

Wed, 23 Mar 2022 18:24:00 GMT

Did you know that Tennessee has more than double the national bankruptcy rate? According to Memphis Business Journal, Tennessee sees 5.17 filings for every 1,000 residents each year. The prevalence of Tennessee bankruptcy filings is likely because state laws are quite friendly toward creditors and lenders, so consumers seek the protections of bankruptcy more often.

Bankruptcy Is for Good People, Too:

Any bankruptcy attorney with a significant amount of time practicing will agree that bad things happen to good people. Many people still attach a negative tone or perception to the bankruptcy process or someone who files bankruptcy. It can be difficult to understand what it feels like to be buried in debt with no means to reverse the situation until you’ve been in that scenario or until you’ve worked with those looking for a solution.

Filing Bankruptcy Doesn’t Mean You Did Something Wrong

Sometimes it’s tempting to assume that the only reason someone would ever need to file for bankruptcy is if they did something wrong, but that’s not the truth of the matter. Many bankruptcy filers come to their first consultation still a little shell shocked because they thought they were doing everything right…until something unexpected happened or in some cases, until a series of unfortunate events occur. No one can plan for every eventuality or every combination of possible factors. In some cases, doing everything right can still end in a tough spot for no good reason at all.

Common Reasons People End Up Filing Bankruptcy:

People seeking the protection of bankruptcy do so for countless reasons, but there are some that you can call “common” reasons simply because they come up so frequently even though they have nothing to do with making a poor choice, being a bad person or failing to plan appropriately.

This partial list is just an example of the many situations that bring good people to the office of a bankruptcy attorney seeking help. Whether you’re looking to file bankruptcy yourself, or you are helping a friend or loved one seek out possible answers to their difficult situation, always remember that bankruptcy is for good people, too.

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Is It More Difficult to File Bankruptcy If You’re Self Employed?

Thu, 17 Mar 2022 18:22:00 GMT

Sometimes being self-employed can seem like a huge hassle. The number of basic situations that seem unnecessarily tedious or difficult can start to stack up – taxes, insurance, business expenses, and business accounts. Some eventually find themselves wondering if bankruptcy is on the list of items made more difficult due to self-employment.

Is Filing More Difficult for the Self-Employed?

Every bankruptcy is different because everyone’s situation varies, but most self-employed people are eligible to file bankruptcy. The process may be simpler for those who are not self-employed, but with a little additional documentation the self-employed can just as effectively seek out the protections of bankruptcy.

Filing Bankruptcy When You Are Self-Employed:

A self-employed employment status can complicate the bankruptcy process, but an experienced attorney will have no trouble guiding you through the steps involved. One of the potential complications for self-employed bankruptcy filers is that the line between what is personal property and what is business property can be confused. When filing Chapter 7 bankruptcy, non-exempt assets are liquidated to pay creditors. With a self-employed filer, the bankruptcy court may experience some confusion about which assets are personal assets and which are business assets, which can be problematic for the filer’s business. For example, an asset necessary to the running of a business may not be exempt for the full value according to bankruptcy law and could be seized by the trustee overseeing the bankruptcy case.

Another Potential Complication: Proof of Income

Another potential complication self-employed bankruptcy filers could face is the possible difficulty of showing valid proof of income. While this is typically easy for filers employed by a separate company or entity, the self-employed filer will usually find that it requires gathering bank statements, and profit and loss documents (for a minimum of 6 months prior to filing). The bankruptcy court uses these documents to review the situation and create a financial overview of the situation. It’s also important to be able to show which portion of the business revenue was designated as salary and which portion was invested back into the business.

The Value of Your Business and the Bankruptcy Means Test:

The means test determines eligibility to file Chapter 7 bankruptcy. The value of a bankruptcy filer’s business could affect whether they qualify to file. The value of the business could put a filer’s income above the median even if their take-home pay is low enough for them to qualify according to the standards set by the means test. On the other hand, in some cases, being self-employed can be beneficial when attempting to qualify for Chapter 7 bankruptcy because it decreases the disposable income.

If you are self-employed, and you’re struggling with debt, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . You are in good hands with Kenneth C. Rannick P.C.

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Can You Save Your Home from Foreclosure During Bankruptcy?

Thu, 10 Mar 2022 18:20:00 GMT

The possibility of foreclosure can be one of the scariest situations any homeowner can face. When faced with foreclosure, most homeowners immediately start looking for anything that could help them save their homes. For people in overwhelming debt, bankruptcy is often seen as a last resort, but bankruptcy is designed to be of assistance to those in massive debt beyond their means.

Stopping Foreclosure in Georgia or Tennessee:

People facing foreclosure on their homes can turn to Chapter 13 bankruptcy for help. However, it is a complicated process, and it does have consequences for the filer’s credit report. Georgia and Tennessee residents considering filing Chapter 13 bankruptcy to save their home from foreclosure should be aware of the various restrictions involved.

Bankruptcy as a Protection Against Foreclosure:

Bankruptcy law can look like a lifeline to homeowners facing the stressful and life-altering process of foreclosure. While Chapter 7 bankruptcy is designed to create a way for people to sell their assets to get out from under overwhelming debt, Chapter 13 bankruptcy is different. Chapter 13 bankruptcy is intended as a means of keeping property for the long-term using a bankruptcy court-managed repayment plan.

Bankruptcy: Not a Quick Fix

Bankruptcy is a serious process and shouldn’t be considered a quick fix. The bankruptcy process is full of complicated legal requirements, and eligibility standards, and receiving a bankruptcy discharge has lasting consequences for the filer’s credit profile. However, working with an experienced bankruptcy attorney can ensure that you accurately determine whether filing bankruptcy is a good idea in your situation – or not.

Filing Chapter 13 to Keep Your Home and Avoid Foreclosure

Chapter 13 bankruptcy is often referred to as the wage earner’s plan, and it can be a good solution for those who are buried in debt but still have a steady income. Chapter 13 bankruptcy does not hinge on eligible assets being sold off to pay the debt. Instead, Chapter 13 bankruptcy allows petitioners to agree to a three-to-five-year repayment plan (depending on their level of income). By following the repayment plan and all the predetermined conditions of the Chapter 13 bankruptcy, the filer can receive a discharge of the remaining debts included in the plan. Most importantly for those facing foreclosure, the Chapter 13 bankruptcy can end with the filer’s homeownership intact since the repayment plan can incorporate missed mortgage payments. By incorporating the missed mortgage payments into the repayment plan, the Chapter 13 bankruptcy gives homeowners the chance to bring their mortgage current with the lender.

If you have questions about filing Tennessee or Georgia bankruptcy to help stop a foreclosure on your home, contact an experienced bankruptcy attorney . Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Does Filing Bankruptcy Affect My Inheritance?

Thu, 03 Mar 2022 18:13:00 GMT

If you need the protections offered by bankruptcy law, but you’re worried about your inheritance and how it could be affected, this article is for you.

How Does Filing Bankruptcy Affect My Inheritance?

When filing Chapter 7 or Chapter 13 bankruptcy , how an inheritance will be affected is determined by state bankruptcy law and the predetermined state bankruptcy exemptions.

Is There an Exemption that Applies to My Inheritance?

A bankruptcy exemption is a type (and specific allowable amount or value) of property a bankruptcy petitioner can keep. Some states allow the use of federal exemptions, but Tennessee does not. Petitioners seeking to exempt an inheritance need to use the state bankruptcy exemptions. Most bankruptcy petitioners in this situation turn to the “wildcard exemption”, Tenn. Code Ann. § 26-2-103 to exempt an inheritance. (The wildcard exemption can be used to cover a wide range of assets). For a single petitioner, the wildcard exemption covers up to $10,000.

If an Inheritance is Not Covered by Tennessee Bankruptcy Exemptions:

If a bankruptcy petitioner’s inheritance is not covered by a state bankruptcy exemption, the asset becomes part of the estate available for the bankruptcy trustee to liquidate to pay creditors (or to use for payment plan calculations if filing Chapter 13 bankruptcy ).

What Happens If a Petitioner Receives an Inheritance After Receiving their Discharge of Debt?

If a Chapter 7 bankruptcy filer’s loved one passes away over 180 days after they filed for bankruptcy, the inheritance is not affected by the bankruptcy. The entire inheritance is theirs to keep. The petitioner is not required to notify the court, the trustee, or past creditors of the inheritance if 180 days have passed since filing bankruptcy. In Chapter 13 bankruptcy, the inheritance can still be used to calculate the three to five-year payment plan amount regardless of the timing.

If you need help filing bankruptcy, but you have questions about your inheritance, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times.

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Is Chapter 7 Bankruptcy the Right Bankruptcy for You?

Thu, 24 Feb 2022 22:55:00 GMT

If you are in debt, you should know all the options. Knowing all the options is the first step in determining which option is the best solution for you and your family. Today we’ll run through the basics to discuss when Chapter 7 bankruptcy is the best option.

Is Chapter 7 Bankruptcy the Best Option for You?

During a Chapter 7 bankruptcy filing, most assets are liquidated to help pay down the filer’s debts. If you are worried about filing bankruptcy because you hold a significant amount in assets, you may want to consider other avenues of debt relief, such as Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, liquidation of assets is not part of the process. However, if you have a lot of consumer or medical debt and not a lot of valuable assets, Chapter 7 bankruptcy could be exactly what you need. If you aren’t sure, discuss how bankruptcy exemptions would help you with an experienced bankruptcy attorney.

Certain Purchasing or Spending Behaviors Make Chapter 7 a Bad Idea:

There are certain situations that make filing Chapter 7 bankruptcy a bad idea because the bankruptcy court could interpret them as fraud. For example:

Other Reasons to Avoid Filing Chapter 7 Bankruptcy:

Recent, Previous Bankruptcy Discharge: You are ineligible to file for Chapter 7 bankruptcy if you received a Chapter 7 bankruptcy discharge within the past 8 years or a Chapter 13 bankruptcy discharge within the past 6 years. There are situational exceptions that could make filing a second bankruptcy petition a good idea, but they are rare. Discuss the situation with a bankruptcy attorney if you feel a second bankruptcy filing is a good idea.

Your Previous Bankruptcy was Dismissed: You are ineligible to file Chapter 7 bankruptcy if you had a previous bankruptcy case dismissed within the last 180 days, had a case dismissed due to a violation of a court order, or if you requested a bankruptcy case dismissal after a creditor requested the court lift an automatic stay.

The Majority of Your Debts are Not Eligible for Discharge: Some debts are not eligible for discharge. If the majority of your debts are not eligible, filing Chapter 7 bankruptcy is probably not your best solution. Common types of debts that will survive a Chapter 7 bankruptcy include child support or spousal support payments, back taxes (less than 3 years past due), student loans, criminal fines or restitution, trust fund taxes, judgments for vehicular accidents related to drunk driving, etc. Other debts may be determined as ineligible if a creditor challenges that discharge due to malicious injury, breach of fiduciary duty, embezzlement, luxury item purchases, fraud, etc.

You Hold Valuable Property: Under Chapter 7 bankruptcy law, the court-appointed trustee will sell any non-exempt property to pay the creditors. If you hold a significant amount of valuable assets, Chapter 7 may not be a good idea. To avoid losing the property you would like to keep, consider filing for Chapter 13 bankruptcy instead. However, certain properties are exempt such as a certain amount of equity in a home or motor vehicle, jewelry (valued below a certain amount), life insurance up to a specified value, tools used for your profession or trade, public benefits, retirement accounts, etc. In some cases, a potential Chapter 7 filer will turn to Chapter 13 instead because the current equity they hold in their home exceeds the homestead exemption. If you have questions about bankruptcy exemptions or which assets you could lose during Chapter 7 bankruptcy, get in touch with a bankruptcy attorney as soon as possible.

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Bankruptcy Can Help Georgia Families Wipe Out Credit Card Debt

Thu, 17 Feb 2022 22:52:00 GMT

Did you know that credit card debt is one of the most common problems for Georgia families? If you are suffering from financial difficulty, you are nowhere near the only one struggling with the problem. In many cases, Georgia families facing overwhelming credit card debt find that bankruptcy can help wipe out the debt entirely.

Bankruptcy Can Give Georgia Families a Fresh Start

Bankruptcy isn’t the only solution Georgia families can turn to when overwhelmed by credit card debt, but it is the only repair solution that eliminates debts and gives you a fresh start to rebuild a healthy financial future. Georgia families hoping to end the financial struggle created by overwhelming credit card debt can file Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Filing Bankruptcy in Georgia:

Filing a Georgia Chapter 7 bankruptcy eliminates most consumer debts , and leaves filers with a fresh start. Georgia bankruptcy law does give the court-appointed bankruptcy trustee the power to well any “non-exempt” assets to pay back creditors, but many Chapter 7 bankruptcy filers don’t that doesn’t mean that the court will wreak havoc on your life. Many filers find that the court doesn’t sell anything they own when they go through Chapter 7 bankruptcy. To determine if you need to worry about the bankruptcy court selling your assets to pay your debts, discuss the details of your situation with an experienced bankruptcy attorney. Chapter 13 bankruptcy doesn’t work towards an immediate discharge like Chapter 7, but instead reduces and restructures debts and creates a more approachable method of getting out of debt with a monthly payment to a court-appointed bankruptcy trustee throughout a 3 to 5 year repayment plan.

Doesn’t Bankruptcy Hurt My Credit?

If you aren’t declaring bankruptcy because it “hurts” your credit, you should discuss the details with an experienced attorney. In truth, that’s not always the case. For some, filing bankruptcy can actually repair their credit report since it wipes out the debts that brought the credit score down in the first place and provides the chance to start over creating positive marks on the credit report. Any damage to the credit report that does occur is temporary, and the benefits far outweigh the consequences for those who are in need of the protections of bankruptcy .

If you are struggling with debt and aren’t sure you can deal with all the collection calls, emails, and letters much longer, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . You are in good hands with Kenneth C. Rannick P.C.

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What Is the Maximum Income for Filing Chapter 7 in Tennessee?

Thu, 10 Feb 2022 22:50:00 GMT

One of the eligibility requirements to file a Tennessee Chapter 7 bankruptcy is to fall beneath the “maximum income” allowed. The Chapter 7 Means Test is used to determine whether or not a potential bankruptcy filer’s income is low enough to qualify.

What is the Chapter 7 Means Test?

The Chapter 7 Means Test is a standard used to determine eligibility to file Chapter 7 bankruptcy . Since Chapter 7 bankruptcy discharges all debts without requiring the debtor to pay them back, the eligibility requirements are more stringent in comparison to other types of bankruptcy. For many potential filers, the determining factor is income.

Do You Make Too Much Money to File Chapter 7 Bankruptcy?

In general, if you make less money than the median household income in the state in which you file bankruptcy, you pass the means test. The median household income in your state varies year to year and may also vary depending on certain factors such as the size of your household. If you fall below the median household income, you are automatically allowed to file Chapter 7 bankruptcy.

What If I Make More than the Median Household Income?

If your income exceeds the median household income in your state, you may still qualify to file Chapter 7, but you have to pass the means test. The Means Test will consider additional factors including the household’s monthly expenses. The purpose of the Means Test is to prevent people from filing for a Chapter 7 discharge when it is not necessary. The test works by considering the applicant’s income against their expenses to determine the disposable income. The higher a filer’s disposable income is, the less likely it is that they will pass the Means Test and qualify to file Chapter 7 bankruptcy.

Chapter 7 Means Test: Disposable Income Compared to Debt

Once the test determines the filer’s disposable income, it compares it to the total amount of unsecured debt. If there is enough disposable income available to pay the debts, the court will determine the filer ineligible for Chapter 7 bankruptcy. When a filer is ineligible for Chapter 7 bankruptcy , they often benefit from filing Chapter 13 bankruptcy instead.

If you have questions about filing Tennessee or Georgia bankruptcy and want to discuss how bankruptcy can offer a more permanent solution to getting out of debt, contact an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Can I Discharge Backrent in Georgia Bankruptcy?

Thu, 03 Feb 2022 22:49:00 GMT

When the rent is late, the landlord doesn’t typically offer a lot of time to figure out a solution. So it’s not surprising that many Georgia renters behind on their rent wonder if they can discharge back rent when they file bankruptcy.

Many Debts (But Not All Debts) Can be Discharged by Bankruptcy:

There are many debts that can be discharged through bankruptcy, but not all debts are eligible for discharge. Some debts simply are not discharged even if they are causing a significant portion of the financial stress leading to a bankruptcy filing.

Bankruptcy and Back Rent in Georgia:

If you’re wondering if back rent is eligible for discharge in a Georgia bankruptcy, there’s one other factor that must be part of the question. Are you filing Chapter 7 or Chapter 13 bankruptcy? Rental debt is handled differently depending on which type of bankruptcy you file.

Chapter 7 Bankruptcy and Back Rent or Rental Debt:

When filing Chapter 7 bankruptcy , Georgia renters may receive a discharge of rental debt for houses, apartments, cars, etc. However, under Chapter 7 bankruptcy, renters are not offered the opportunity to repay their past-due rent. The renter filing bankruptcy can choose to assume the lease which gives them 30 days after filing to repay their back rent balance. If they are able to cover the back rent, they can stay in their rental. If the Chapter 7 filer cannot come up with the cash to cover the past due amount and bring their lease current, they can choose to reject the lease. In this scenario, the renter is not obligated to continue paying rent, and the past due rental amount would be discharged at the end of the Chapter 7 bankruptcy, but the renter is not protected from eviction. The landlord may, in fact, seek authority from the court to quickly get the eviction proceedings started.

Chapter 13 Bankruptcy and Back Rent or Rental Debt:

If a Georgia renter files Chapter 13 bankruptcy and they have back rent they are worried about, they can either assume the lease and stay or reject the lease and leave the property. If they decide to stay, they will need to pay all their past rent. They will also simultaneously make regular monthly payments moving forward. If they do not, the landlord of the property may reach out to the court to request they lift the automatic stay to allow them to evict the renter.

If you are behind on your rent, in debt, and you need help filing bankruptcy , call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times.

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Is it Possible to Buy a Car During a Bankruptcy?

Wed, 26 Jan 2022 17:37:00 GMT

One of the frequently asked questions consumers ask when considering filing bankruptcy is, “Can I buy a car during bankruptcy?”

Is Bankruptcy the Perfect Time to Buy a Car?

When asking if it is possible to buy a car during bankruptcy, the most straightforward answer is yes. It is possible. Is bankruptcy the perfect time to purchase a new car? No, it is not. However, when the situation demands it, it is possible to buy a car during a bankruptcy case. Immediately upon hearing this question, some dismiss it as a low priority, but this is a big assumption. In some cases, purchasing a vehicle during a bankruptcy case could be essential to the individual or family’s ability to function.

Buying a Car After a Discharge vs. During a Bankruptcy Case:

If possible, bankruptcy petitioners should wait until the discharge is received before buying a car. However, if the situation demands immediate attention, you can purchase a car while your Chapter 7 bankruptcy case is pending. Waiting until you receive your debt discharge means you have more negotiating power with the lender since the bank knows the discharge clears your debt. Additionally, after receiving a discharge, any lender will also know that you receive another Chapter 7 bankruptcy discharge for at least eight years (from the recent Chapter 7 petition filing date). With no debt and no risk (at least for several years) of the bankruptcy discharging the debt, lenders may see an opportunity. It also helps that most petitioners who recently received a discharge of debt seek to rebuild their credit, so they pay even more attention to making on-time payments and fulfilling the terms and conditions of any new credit received post-bankruptcy. In comparison, purchasing a car while a bankruptcy case is pending means significantly less negotiating power.

When purchasing a car during bankruptcy, it’s important to remember that the debt is a post-petition debt and will not be discharged. Therefore, carefully consider the terms and conditions of any offers made by lenders to ensure the monthly payment amount is affordable and suits your budget. For instance, you will likely be offered a high-interest rate when you purchase a vehicle amid a pending bankruptcy case. Use caution to avoid damaging the fresh financial start offered by your Chapter 7 bankruptcy discharge and leading you to the same complex financial situation you faced before filing.

Cars & Bankruptcy: Refinancing, Reaffirming, or Redemption

There are a few other common scenarios related to bankruptcy and vehicles. In today’s world, having a car is a necessity in most cases, and the bankruptcy court is aware of this need. As such, there are options to ensure that bankruptcy petitioners are not left without a vehicle when one is necessary. In some cases, it’s possible to “refinance” by doing either a reaffirmation agreement or redeeming the car with a new loan. If reaffirming the loan is possible (discuss the possibility with an experienced bankruptcy attorney), the petitioner can ask the lender for a lower interest rate or reduce the balance owed. When a lender agrees to this type of concession, the bankruptcy court is more likely to approve the reaffirmation agreement. When a petitioner redeems their car in bankruptcy, they essentially purchase it for current market value instead of the remaining balance owed on the loan. In this scenario, a new loan may be necessary as a form of refinancing, but the new loan amount would no longer exceed the vehicle’s value.

Working With an Experienced Bankruptcy Attorney Can Help

Our office has relationships with lenders who make car loans to debtors even when they are still in their bankruptcy. Every deal stands on its own facts, and some folks won’t qualify, but on the other hand, many are surprised by how many people qualify for car purchases even before they receive their discharge. In this scenario, the debtor files the case, buys a car, then gives the old car to the Chapter 7 trustee (or the secured lender) afterward. The debtor never has a day without a car in such an instance. Make an appointment and ask how it works!

We understand that financial struggle is difficult, and we want to help. If you have questions about buying a car during bankruptcy, reaffirming a car loan, or redeeming a vehicle, please don’t hesitate to contact Ken Rannick. You are in good hands with Kenneth C.Rannick, PC. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law by the American Board of Certification. In addition, he is recognized and inducted as a “Superlawyer” by his fellow lawyers, which is awarded to less than 2% of all lawyers in his field. Rannick P.C. Make an appointment today.

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Major Causes of Overwhelming Debt: Generation X Struggles with Medical Bills

Wed, 19 Jan 2022 17:32:00 GMT

Many people assume that the baby boomer generation and the “silent generation” (currently 60+) are the most likely to have excessive or past-due medical debt. However, this is not the case. Recent studies have indicated that while approximately 1 in 5 adult Americans have past-due medical bills, the number increases to 1 in 4 if the pool of adult Americans is limited to those under age 65.

Which Generation Is Most Likely to Have Past-Due Medical Debt?

Experts suspect health insurance coverage is a crucial driving factor in these telling numbers. The elderly generation is more likely to have more protection against medical debt due partly to the broad reach of Medicare as currently designed. In a similar scenario, baby boomers enjoy lower insurance rates than young adults, which likely contributes to their lower rates of past-due medical debt.

Potential Consequences of Past Due Medical Debt:

Is Past-Due Medical Debt Harmful to Young Adults?

While some dismiss the “consequences” as more beneficial than harmful, they limit a person’s ability to create the potential for improved financial stability and increased wealth by putting significant obstacles in the way of mortgages, loans for small business startups or operations, etc. Additionally, credit scores and credit report information may be used by employers determining job eligibility, insurance companies calculating premiums, and landlords considering rental applications.

Discharging Past-Due Medical Debt Through Bankruptcy:

Bankruptcy is designed to offer relief from many types of debt , but medical debt is one of the most common types of significant debt consumers seek to discharge. Past-due medical debt is one of the most common reasons Americans fall significantly behind on their bills, end up buried in debt, and face chronic financial struggle.

If you struggle financially and don’t know how to pay your past-due medical debt, consider speaking with Ken Rannick, bankruptcy attorney . Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law by the American Board of Certification. In addition, he is recognized and inducted as a “Superlawyer” by his fellow lawyers, which is awarded to less than 2% of all lawyers in his field. You are in good hands with Kenneth C. Rannick P.C. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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What To Do If Your Wages Are Being Garnished

Wed, 12 Jan 2022 17:25:00 GMT

Did you know there may be action you can take to prevent, reverse or decrease the amount of a wage garnishment?

What To Do If Your Wages Are Being Garnished:

Contact the Creditor Directly: In some scenarios, individuals facing a wage garnishment never actually spoke with their creditor about the situation. The first proactive step to take when trying to avoid or reverse wage garnishment is to contact the creditor directly to negotiate a smaller monthly payment amount or a debt settlement.

A Claim of Exemption: In some cases, it could be appropriate to file a claim of exemption. A claim of exemption could stop or decrease a wage garnishment based on the personal and financial situation at hand. Certain types of income are considered generally exempt (with some exceptions, contact an experienced bankruptcy attorney for more details). For example, in Georgia, the following types of income cannot be taken to pay off most types of debt: social security disability or retirement benefits, SSI benefits, TANF benefits, unemployment compensation, VA benefits, student loans, and child support received.

Challenge the Garnishment: For some, it could be appropriate to challenge the wage garnishment. For example, you may be able to challenge a wage garnishment if the creditor didn’t follow the required proceedings or if the amount garnished is excessive. It’s also important to note that sometimes wage garnishment may be based on an inaccurate record. Suppose a creditor garnishes wages to collect a debt you don’t owe (a debt already discharged in bankruptcy or a debt previously paid). In that case, you could have grounds for stopping the wage garnishment and clearing the associated debt.

Consolidation or Refinancing : In some cases, it may be possible to obtain a new loan to pay off the debt associated with the wage garnishment through consolidation or refinancing. However, this may not be an option. Many in this situation are behind on their bills, making obtaining new credit challenging. Seeking a secured loan could be an option. (For example, a home equity loan, but doing so means risking the loss of your home if you can’t repay the debt).

Bankruptcy: Filing bankruptcy can seem like an extreme option, but in some cases, bankruptcy is the best simple (and relatively inexpensive) answer to wage garnishment or the threat of wage garnishment. When buried in debt, filing bankruptcy puts an immediate stop to any active or planned wage garnishment.

If you have questions about filing Tennessee or Georgia bankruptcy and want to discuss how bankruptcy can help you stop wage garnishment , get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law by the American Board of Certification. In addition, he is recognized and inducted as a “Superlawyer” by his fellow lawyers, which is awarded to less than 2% of all lawyers in his field.

We help good people through bad times.

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FAQ: Will Filing Bankruptcy Wipe Out All My Debt?

Wed, 05 Jan 2022 16:54:00 GMT

Many people in today’s political and financial climate seek relief from overwhelming debt and financial difficulties. For some, this means an overhaul of their spending habits. For others, it could mean reconsidering lifestyle or career choices. And for others, bankruptcy offers the fresh start they seek, but will filing bankruptcy wipe out all your debt?

What is Bankruptcy?

Bankruptcy is a federal legal proceeding. Bankruptcy proceedings help debtors overwhelmed by financial difficulties. Bankruptcy starts when a bankruptcy petitioner files a petition. Any debts incurred before filing a petition are prepetition debts included in the bankruptcy filing.

Immediately After Filing Bankruptcy:

Typically, the automatic stay goes into effect upon filing a bankruptcy petition. The automatic stay prevents creditors from taking action to collect on a debt owed by the bankruptcy petitioner. The stay is to give a debtor a pause to catch his breath and give him a time of no harassment. He is then able to address his debt under court supervision. The automatic stay applies to all debt with few exceptions.

What Are Dischargeable Debts and Non-dischargeable Debts?

Differentiating between dischargeable and non-dischargeable debts is a very confusing issue. This field is too complicated for most laypersons and many lawyers to figure out. We frequently give second opinions and are hired to assist where a case has gotten off on the wrong foot due to the complicated area of dischargeability. It takes a lawyer with lots of experience to discern the range of available options.

The simple part is understanding that while some debt can be wiped out, other debts can not. A discharge means that the debt is no longer collectable. Dischargeable debt is a category of debt that may be eligible for a bankruptcy discharge. Think of a discharge like a court order forgiving the debt. You are no longer legally required to pay that debt! However, the confusing issue is identifying non-dischargeable debts and knowing how to maneuver within a case to obtain a discharge. There is:

The reader should be thoroughly confused by now. This material has volumes of litigation. Only a very well-read attorney should be addressing these issues when they arise.

Considering an Example of Non-Dischargeable Debt:

Different types of debt are typically non-dischargeable. Even after receiving a bankruptcy discharge, a debtor will still owe a nondischargeable debt. One example of a nondischargeable debt is back child support. Although a child support debt arrearage debt may not be discharged, it may still be able to become much more manageable in a bankruptcy. For example, a Chapter 13 plan might enable a debtor to catch up on the child support arrearages while getting back on his feet. When filing bankruptcy, it’s also important to know that bankruptcy does not relieve a petitioner of the need to pay the future ongoing child support that comes due while the bankruptcy is in process. Failure to pay the continuing obligation may result in case dismissal. The dismissal lifts the debtor’s protection under the automatic stay, and creditors may resume their collection activities.

If you need help filing bankruptcy, or if you have questions about which debts are dischargeable and nondischargeable, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney , and ask about getting a fresh financial start. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law by the American Board of Certification. In addition, he is recognized and inducted as a “Superlawyer” by his fellow lawyers, which is awarded to less than 2% of all lawyers in his field.

We help good people through bad times.

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Can a Court Take Back a Chapter 7 Bankruptcy Discharge?

Wed, 29 Dec 2021 16:37:00 GMT

Many American consumers have previously filed for bankruptcy. For most, the most stress-relieving part of the process is when they receive their discharge of debt. The discharge order relieves the debtor of all liability to repay the debts included in the bankruptcy, offering them a fresh start financially. However, some have heard “horror” stories about the bankruptcy court revoking a discharge of debt.

Can the Bankruptcy Court Revoke a Chapter 7 Discharge?

The court may indeed revoke a Chapter 7 discharge (11 U.S.C. § 727(d)). The trustee, a creditor, or the U.S. trustee may request that the discharge be revoked if:

•the petitioner engaged in fraudulent behavior to obtain the discharge,

•the petitioner knowingly (and fraudulently) failed to report the acquisition of property or surrender estate property to the trustee,

•or the petitioner makes a material misstatement or fails to provide documentation or info in connection to an audit of the case.

What Happens If the Chapter 7 Bankruptcy Discharge is Revoked?

If the court revokes your bankruptcy discharge, you are no longer released from the responsibility to pay debts listed in your bankruptcy. Instead, you remain liable for your previously discharged debts. Your creditors are then able to resume collection efforts. They may garnish your wages, levy on your car or house, and record liens. Additionally, if you committed bankruptcy fraud or abused the bankruptcy system somehow, you could be assessed fines, be required to forfeit assets, or even face federal criminal charges.

What Happens If I Lose My Discharge Order?

While having your discharge revoked comes with potentially severe consequences, losing your discharge order does not have to cause much trouble at all. If you lose your discharge order, your discharge is not affected. You can simply obtain another copy of the order by contacting the clerk at the bankruptcy court where you received the original order. The court will charge a fee for searching the records to find the information, and there is also a fee for making additional copies. If the case is officially closed, there could also be an additional “retrieval” fee to obtain the record from archived files. In some cases, you may be able to use self-service access to public records to obtain a new copy of your order.

We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and how to obtain a Chapter 7 discharge , please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law by the American Board of Certification. In addition, he is recognized and inducted as a “Superlawyer” by his fellow lawyers, which is awarded to less than 2% of all lawyers in his field. You are in good hands with Kenneth C. Rannick P.C.

The post Can a Court Take Back a Chapter 7 Bankruptcy Discharge? appeared first on Kenneth C. Rannick, P.C. .

What Happens If I Just Ignore My Collection Notices?

Wed, 22 Dec 2021 16:30:00 GMT

Talking to debt collectors and creditors seeking payment on past due balances is not fun. Nobody likes to do it, but most will do almost anything to avoid it. When faced with endless emails, phone calls, texts, and letters from debt collectors, many are tempted just to ignore it entirely, but what happens when collection notices are set aside and ignored?

What Happens If I Just Ignore My Collection Notices?

Have you ever heard the old saying, “You can run, but you can’t hide?” The very first debt collector may have inspired that saying. In our virtual world, it’s difficult to ignore a debt collector completely. Even if every call is sent to voicemail, they are incredibly persistent and have many other contact options from text to email to social media. If you are equally persistent and ignore or block creditors in online arenas, the situation could escalate to a lawsuit.

What Else Will Creditors Do If I Ignore Them?

Creditors don’t like being ignored when they are owed money. In addition to filing a lawsuit, they can also cause other problems for consumers who are hard to reach. Ignoring creditors and collection notices usually means your credit will take a hit. When a debt goes into collections, the delinquency usually appears on their credit report, so the account holder’s credit score typically suffers. In addition, the total debt or amount owed could grow if you ignore creditors reaching out for payment. When you set aside collection notices, not only does the principal balance still exist out there, but the total balance owed may increase due to interest that continues to accrue on top of penalties and late fees. In some cases, collection agencies may add charges to the balance to cover expenses related to their attempts to collect on the debt.

If I Ignore Creditors, Will They Reach Out to My Family & Friends?

When a debt collector is ignored, their entire job is to keep reaching out. If they can’t get you to answer your phone, they’ll try someone else. An aggressive debt collector will call anyone who may know you – your family, friends, neighbors, etc. In some states, creditors and debt collectors can contact third parties to track the account holder down. However, they are never legally allowed to disclose that you owe a debt to a third party or discuss your financial information with them.

Avoid the Stress & Anxiety that Comes with Ignoring Collection Notices:

Talking to creditors is stressful and may trigger anxiety, but your stress and anxiety levels will most likely increase when you ignore your collection notices. Instead of creating a stress-filled situation in an attempt to avoid the stress of talking to your creditors, consider talking to an experienced bankruptcy attorney about the protections of bankruptcy.

If you are struggling with debt and aren’t sure you can deal with all the collection calls, emails, and letters much longer, consider speaking with Ken Rannick, bankruptcy attorney. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law, by the American Board of Certification. In addition he is recognized and inducted as a “Superlawyer” by his fellow lawyers which is awarded to less than 2% of all lawyers in his field. You are in good hands with Kenneth C. Rannick P.C. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Most At-Risk Group for High Credit Card Debt

Wed, 15 Dec 2021 16:23:00 GMT

Are you in the most at-risk group for high credit card debt ? According to data released from the Federal Reserve bank of New York in February 2021, younger Americans appear to be the most at risk for high delinquency rates.

Recent Data Shows Credit Card Debt in the U.S. is Out of Control:

Younger American Consumers Face an Increased Risk of Debt:

It’s easy to see the problem the younger demographic is facing when the delinquency rates are broken down by age:

Why Are America’s Young Adults Drowning in Debt?

There are many reasons debt can snowball towards unmanageable levels. Regardless of your age, you can be affected by these factors, but many of today’s younger adults are more likely to both face these issues, face more of these issues simultaneously and respond to the issues in a way that leads to debt.

Seeking Solutions to Overwhelming Debt:

Young adults seeking solutions to overwhelming debt tend to assume their financial struggles are temporary. They’ll get a better job soon. Their promised raise is going to come through any day. They can’t get hit with “unexpected expenses” every month. When the problem is considered temporary, most will turn to a temporary solution. However, in many instances, overwhelming debt is not a temporary situation, so temporary solutions like borrowing money to cover shortages, paying bills on credit, etc., are not the most effective means of addressing the problem.

If you have questions about filing Tennessee or Georgia bankruptcy and want to discuss how bankruptcy can offer a more permanent solution to getting out of debt , contact an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick, P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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6 Signs of Out of Control Debt

Wed, 08 Dec 2021 16:23:00 GMT

If you’ve ever wondered if your debt is out of control, you are one of many. You might even call this particular question an FAQ of modern society. Credit is an undeniable part of life in America, and at a social and cultural level, it’s simple to see its purpose and the positive potential it provides families. However, when you drill down to individuals and families, it’s just as easy to see how debt can spiral out of control . So, if you want to know if your debt is out of control, watch for the common warning signs.

6 Signs of Out of Control Debt:

1. Your “Debt” Grows Each Month: If your balances are growing month by month, despite on-time, regular, or even substantial payments, you may have a spending problem. Increasing your credit balance month to month is never a good sign, and you should pinpoint the problem before it escalates.

2. You Applied for New Credit & Denied: Lenders make money by lending money, but they aren’t in the business of giving money away. When they receive an application, they approve or deny it based on the borrower’s likelihood to repay the loan. A denied credit application is a strong indication that you are considered high risk. Being considered high risk is usually due to excessive debt or negative marks on your credit report.

3. You Depend on Credit to Pay Bills: If you borrow money from family/friends or pull a cash advance to pay bills, it means there is a problem. Especially since a cash advance is the very worst possible use of a credit card (almost universally receiving an exceptionally high-interest rate and additional fees).

4. Your Credit Score is Dropping: There are many reasons that a credit score can drop. However, two of the most common are: a balance carried a long time and a high credit utilization ratio. If you see your credit score dropping, it’s often an indication that you are either filling up your available credit or carrying balances without decreasing them month-to-month (or both), which is not a healthy sign for your finances.

5. You Transfer Balances Frequently: If you transfer your debt to new cards (with low introductory rates) regularly, you may be in a cycle of transferring debt instead of paying off debt. It seems helpful, but introductory periods end, and if the debt is continuously being transferred and never being paid off, you aren’t doing yourself any favors.

6. You’re Making Minimum Payments or Late Payments: Credit cards have multiple benefits, but they’re only beneficial if you pay them off each month. And when you only pay the minimum payment, you end up paying a lot more than you may expect, especially if you add late payments on top of standard fees and interest.

If you are in debt and you need help filing bankruptcy , call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney to ask about getting a fresh financial start. We help good people through bad times.

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How to Prepare for Your 1st Consultation with a Bankruptcy Attorney

Fri, 29 Oct 2021 04:08:00 GMT

Once you’ve scheduled an appointment with a bankruptcy attorney, many find that the debilitating stress associated with the financial trouble lightens immediately. This is particularly true if you feel prepared for your first consultation.

What to Do Before Your First Consultation with a Bankruptcy Attorney:

Determine Household Expenses: Make sure you know your household expenses. Make a detailed list to take with you to your consultation including: mortgage or rent, all utility services (electric, gas, propane, water, sewage, garbage, etc.), telephone service, internet service, cable or TV service, home maintenance costs, average food and clothing expenses, laundry and dry cleaning expenses, medical, dental, transportation, entertainment, membership fees, charitable contributions, homeowners insurance, renters insurance, health insurance, auto insurance, property taxes, spousal support, child support, pet care, tuition, etc.

Debt Statements: Just as you gathered statements for the financial accounts you hold at different financial institutions, you need to gather statements for all your credit accounts including credit cards, medical debt, auto loans, mortgages, personal loans, jewelry loans, furniture loans, judgments, etc.

Gather Other Property Documents: If you have any other property, you’ll need to bring documentation of that, as well. For example, stocks, mutual funds, 401k’s, IRAs, other retirement assets, etc.

We understand that financial struggle is difficult, and we want to help. Please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our bankruptcy law office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Lost Your Job? An Experienced Bankruptcy Attorney Can Help

Mon, 25 Oct 2021 04:05:00 GMT

If you’ve lost your job, and you are unsure how you’ll successfully manage your finances in the months or years to come; you are not alone. In fact, as of May 2020, the unemployment rate was the worst it’s been since the Great Depression. If you find that you are out of work and struggling with debt, you may want to consider filing bankruptcy.

Chapter 7 vs. Chapter 13 Bankruptcy

There are two main types of individual bankruptcy (not business bankruptcy), Chapter 7 and Chapter 13.

Chapter 7 bankruptcy is fast – particularly in comparison to Chapter 13 bankruptcy. Many Chapter 7 bankruptcies are complete within months, while the Chapter 13 bankruptcy requires a minimum of 3 years, and could require up to 5.

Chapter 7 is generally the best option for people with high debt compared to low income and little to no assets. Generally Chapter 7 is not as well advised for individuals who don’t qualify for Chapter 7 due to their income; have excessive non-dischargeable debts like child support; have fallen behind on their house or car payments; or would benefit by using the power of chapter 13 to lower their interest rates on a car. If the filer has the income to cover the payments, but just needs to catch up, Chapter 13 makes this possible.

Chapter 7 is referred to as the liquidation bankruptcy because non-exempt assets are liquidated with proceeds distributed to creditors. Individuals with substantial resources/assets may prefer Chapter 13 as no assets are sold to pay creditors in a Chapter 13 bankruptcy.

Filing Chapter 7 bankruptcy r equires passing the means test; a standard test that determines whether or not a filer’s income qualifies them for Chapter 7 bankruptcy protection. Those who do not qualify for Chapter 7 bankruptcy may qualify under an exception (called ‘a Lanning deviation’) and also can often benefit from filing Chapter 13 bankruptcy.

Once a Chapter 7 bankruptcy is filed, and the court liquidates any non-exempt assets to distribute funds to creditors. The court issues a discharge of debt that essentially removes the filer’s liability to pay any and all dischargeable debts included in the bankruptcy. In comparison in Chapter 13, the debtor is protected, you are left alone to pay creditors what the Judge agrees you can afford. The Chapter 13 used to be referred to as a “wage earner” bankruptcy because it was designed for employeeswith a regular paycheck. Now its opened up for folks with other types of income including roommate contributions; side hustles; disabilities; odd jobs; self employment; and internet income. In effect, all persons with reliable income should consider the hope provided in a carefully crafted and individualized Chapter 13 plan as this type of bankruptcy reorganizes the filer’s debts and finances into a plan allowing them to pay back their creditors over the course of three to five years while retaining their assets.

What About Non-Dischargeable Debts?

If you’ve lost your job, and you’re considering filing bankruptcy, you probably have concerns about what debt is dischargeable and what debt is nondischargeable. Dischargeable debt refers to consumer debts like credit cards, other revolving debt, personal loans, etc. After filing bankruptcy and receiving your discharge, the filer is no longer responsible for paying discharged debts, but they will still be responsible for paying any non-dischargeable debt. Non-dischargeable debt includes:

If you’ve recently lost your job and you aren’t sure how you’ll pay your debts, consider speaking with a bankruptcy attorney. Financial struggle is always difficult, but it is particularly stressful and unnerving during uncertain times. Please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. You are in good hands with Kenneth C. Rannick P.C. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Managing Debt Following Covid-19 Pandemic & How Bankruptcy May Help

Tue, 19 Oct 2021 04:01:00 GMT

The recent pandemic, quarantines, and shutdowns have resulted in a wage of job loss, pay cuts, lost hours, and numerous other adverse financial repercussions for Americans; leaving many with debt following Covid-19. If you are struggling with debt in the aftermath of the pandemic, bankruptcy may help.

Is Bankruptcy the Right Move for You and Your Family?

If you are trying to manage debt following Covid-19 and struggling to make ends meet, filing bankruptcy may be a good idea. However, it is an extreme step and it isn’t the best step for everyone. Before you decide to file bankruptcy, consider other options available to you. Are you eligible for unemployment benefits? Have you looked into unemployment assistance in your area for those struggling financially as a direct result of the Covid-19 outbreak? Did you know the federal government has deferred student loan payments? If you have a private student loan provider, reach out to them to see if they offer any similar assistance. The federal government froze foreclosures and evictions involving certain properties for a limited time, and some state and local governments have their own protections in place assisting those in fear of evictions, utility shut offs, or foreclosures due to the financial difficulties originating from the pandemic. In fact, mortgage servicers and institutions holding credit card accounts, car loans, etc. may be willing to make adjustments to the terms of your agreement. Keep in mind that most of the assistance offered provides assistance through payment deferment rather than the elimination of debt.

When Bankruptcy Becomes the Best Option:

If you’ve already looked into all the options available to you and you cannot make your regular payments, then bankruptcy may be the best option. Bankruptcy does not eliminate all types of debt, but it does eliminate most types of debt. In particular, bankruptcy frequently eliminates the types of debt many consumers have accumulated due to the Covid-19 pandemic: credit card debt, missed rent, medical debt, etc. In addition, Chapter 13 frequently cuts thousands of dollars off your car loan and you still keep your car!

The Next Decision: Chapter 7 or Chapter 13

Once you determine that filing for bankruptcy is your best option, you need to consider which type of bankruptcy to file. Most individuals file either Chapter 7 or Chapter 13. Chapter 7, or liquidation bankruptcy, means that the trustee will sell any non-exempt assets and distribute the proceeds to creditors. Dischargeable debts are immediately discharged at the end of the bankruptcy process even if the creditor did not receive full (or any) payment. Before filing Chapter 7 bankruptcy, consumers must pass the means test to determine if they are eligible. If your job loss is recent, you may not be readily eligible to file Chapter 7 immediately as the means test takes the last 6 months of income into consideration.that said, if your lob loss is permanent, the Supreme Court has ruled we may be able to deviate from a means test (which presumes that filing a Chapter 7 would be abusive abusive) and as a result you could file a Chapter 7 anyway.

In contrast, Chapter 13 bankruptcy provides relief to individuals who can afford to pay back some of their debt within a three to five year time period. When filing Chapter 13, no assets must be sold to pay creditors, but all discretionary income is channeled toward a monthly payment to the bankruptcy court that is then distributed to creditors. Chapter 13 bankruptcy is typically a good option for filers with more financial resources. Chapter 13 takes significantly longer than Chapter 7 bankruptcy, but it avoids the loss of assets like a home or a vehicle.

If you have questions about filing Tennessee or Georgia bankruptcy and you want to discuss how bankruptcy can help you get out of debt following Covid-19, get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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4 Things You Absolutely Should Not Do When Filing Bankruptcy

Mon, 11 Oct 2021 04:00:00 GMT

Are you having financial problems? If you are considering bankruptcy as an option, make sure you are aware of what NOT to do when filing bankruptcy. Certain actions (or inaction) could limit your options, or put you at risk of having your bankruptcy case dismissed, so consider this list of what not to do when filing bankruptcy.

4 Things You Absolutely Should NOT Do When Filing Bankruptcy:

If you need help filing bankruptcy , or if you have questions about how filing bankruptcy can help you and your family get a fresh financial start, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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How the Covid-19 Pandemic is Affecting Tennessee Families, Debt & Bankruptcy

Wed, 22 Sep 2021 10:02:00 GMT

Throughout the course of 2020 and 2021, the Covid-19 pandemic affected nearly everyone in the nation. Many have lost their jobs or settled for work that provides them with a significantly lower income to pre-pandemic positions. Others saw their education or career training progression come to a screeching halt due to rapid changes in the education. Many Americans find themselves behind on their basic bills. Some are turning to credit to cover their basic needs. A significant number have depleted their savings accounts. To alleviate the pressure, many Tennessee families are considering the benefits of bankruptcy .

Covid-19’s Effect on Tennessee Families and Personal Finances:

Many Tennessee residents are worried about their jobs; unexpected changes have become the norm, and families fear having to make ends meet with a suddenly lower income. Around 25% of Americans have struggled to make their payments at some point during the pandemic, and a large percentage of these likely used up most or all of their savings before finding themselves at a loss.

When Savings Are Depleted Tennessee Families Turn to Loved Ones for Help

When Tennessee families have depleted their savings, they generally turn to their loved ones for help. Up to 1 in every 6 Americans have borrowed money from family or friends once they’ve run out of options to make it work financially. Some families have turned to nearby food banks for help for the 1st time.

How Can Tennessee Families Recover from Negative Financial Impacts of the Pandemic?

Tennessee families who are in a tight or impossible financial situation due to unprecedented circumstances during the pandemic or following the pandemic, should remember to have hope. In addition to the government providing assistance as a result of the CARES Act, Tennessee residents should be proactive in seeking relief from lenders and financial institutions. Many have special options or programs available for those affected by the pandemic. Contact creditors or lenders and ask for alternatives. Prioritizing expenses, cutting out expenses that aren’t essential, and tracking/budgeting carefully can also be extremely helpful in gaining control of a difficult financial situation. If you lost your job and are unable to find another job to replace the lost income, consider seeking out accessible unemployment programs.

Considering All the Options: Tennessee Bankruptcy

Financial struggle is always difficult, but it is particularly stressful and unnerving during uncertain times. If you are struggling to recover from the pandemic financially, and need to talk about filing bankruptcy, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Bankruptcy 101: Common Bad Financial Habits Hurting Georgia Families

Wed, 15 Sep 2021 09:59:00 GMT

Being overwhelmed by debt can be extremely damaging for families. The tension and stress associated with debt and being in collections can lead to long term hurt and anguish. That’s why it’s so important that Georgia families know how to identify bad financial habits. Bad financial habits don’t just hurt a family’s finances, they hurt Georgia families, too.

Does Your Family Have Bad Financial Habits?

When it comes right down to it, everyone has habits or indulgences that could fall into the category of a “bad” financial habit. For some it’s a daily latte first thing in the morning. For others it’s a new pair of shoes every month or week, etc. It seems harmless, but it’s not harmless when the spending is unplanned and its effect on the bottom line isn’t taken into consideration. Individuals and families experiencing chronic debt often exhibit similar behaviors or “habits.”

Bad Financial Habits Hurting Georgia Families:

Debt is a huge problem that holds Georgia families back from success and happiness. Identifying bad financial habits and making the appropriate adjustments can help you get back where you need to be to operate in the black. The New York Federal Reserve Quarterly Report on Household Debt and Credit indicated that Americans held $14.64 trillion in household debt in the 1st quarter of 2021. In contrast, that same report showed that overall credit card debt in the nation dropped about $157 billion since the end of 2019, but according to Experian credit bureau, the average household still had $5,315 in credit card debt in 2020.

Certain Habits Increase the Chances of Debt

People prone to debt typically have one or more consistent habits from the list above that generally lead toward financial struggle. Consider your own day to day activity, expenditures, and money management to identify any of the above habits and patterns. Doing so will help you reassess the way you think about debt and approach money management.

Do You Need a Financial Makeover?

If you need a financial makeover, start by reassessing your financial habits. Habits are formed over the course of years; years spent doing the same thing repeatedly. Bad financial habits can obliterate healthy attempts to stay debt free. Don’t adopt a negative mindset that getting debt free or staying debt free is impossible. Break negative spending patterns, adopt new healthy financial habits, and do what you need to do to get out of debt and stay there.

If you have questions about how to get a fresh financial start by filing bankruptcy or if you’d like to know about the bankruptcy process in Georgia , we can help. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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How to Pay Off Student Loans as Quickly as Possible

Wed, 08 Sep 2021 09:55:00 GMT

Approximately 1 in every 8 Americans carry student loan debt around with them. that’s 42.9 million Americans hanging on to student loan balances for dear life (according to data from the U.S. Department of Education). If you are one of the many who feel like your student loan debt is holding you back from approaching your financial life in a healthy way, consider a few recommended methods for paying off student loan debt as quickly as possible.

Make Extra Payments, But Give Instructions

You may feel it’s obvious that if you want to pay off your student loan debt faster, you pay more than the minimum each month. You wouldn’t be wrong, but when paying extra toward your student loan balance, it’s best to do so with some extra instruction. While there are no penalties for paying student loans off early or making payments larger than the minimum, loan servicers generally apply any extra payment toward the next month’s payment. Doing so advances your due date, but does not pay the debt off faster. To pay your student loan debt off faster, reach out to your loan servicer (by phone, email or mail) and ask that they apply any overpayments to the current balance, and keep the next month’s due date in place according to schedule.

Consider Refinancing Options

Refinancing your student loans can be a big help in paying them off fast without extra payments. By refinancing you can replace multiple student loans with one single private loan (hopefully at a lower interest rate). When refinancing, you can choose a new loan term that is less than what’s left on your current loans to speed up repayment even more (this could increase your monthly payment, but it will help pay the debt off quicker and decrease the amount of interest you pay). However, refinancing isn’t an option in every situation since you do need to have good credit and a steady job to get approved.

Consider the Benefits of Enrolling in Autopay

Federal student loan servicers offer a quarter-point interest rate discount if you enroll in autopay; which allows them to automatically deduct your payments from your bank account on the due date. If you work with a private lender, check to see if they offer a similar interest rate deduction – many of them do.

Think About Making Biweekly Payments

This method is a bit tricky, since it actually tricks you into making more than your minimum payment each month. Instead of paying your amount due on the due date each month, pay half of the monthly minimum payment every two weeks. By doing so, you end up making one extra payment each year, which decreases the time necessary to repay the debt as well as the amount you end up paying in interest.

Find Out About Any Beneficial Employee Benefits

Some companies offer to pay off student loans to their employees as part of their benefits package. If you aren’t sure if your company offers anything similar, find out. Ask if the company offers an employer student loan repayment program. If they do, take advantage of it and enroll immediately.

Student loan debt can be debilitating – particularly when it is only a portion of a larger mountain of debt. Consider how to address the situation and make a concentrated effort leading straight to your financial goals. If you need help addressing a larger debt situation, bankruptcy could help.

If you have questions about filing Tennessee or Georgia bankruptcy and you want to discuss how bankruptcy can help you stay on top of your student loan payments, get in touch with an experienced bankruptcy attorney . Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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The Benefit of Having a Clear Budget When Trying to Deal with Debt

Mon, 30 Aug 2021 17:55:00 GMT

If you are overwhelmed by debt or can’t seem to stay on top of your bills, and you aren’t sure where to start, you can trust a budget to lead you in the right direction. Having a clear budget when trying to deal with debt is essential.

A Budget Can Help You Change the Way You Handle Money:

If you are overwhelmed by debt, chances are you need to change the way you handle your money. A budget is the tool most will need to use to do just that. When budgeting, you can understand where money is coming from and you can see where you spend it. Having a budget in place allows you to make your available money do what you want it to do – rather than moving forward without a plan and very little control over the end result.

A Budget Can Help You Set & Track Financial Goals

One of the benefits of a clear budget is that it allows you to set a goal. For most, the overall goal is to make more money than they spend. Other common goals a budget can help with include:

A Budget Can Help You Feel In Control of Your Finances Again

For many, instituting a budget can help them feel in control of their finances again – and when you’re drowning in debt or struggling to cover your monthly expenses, feeling in control of your finances again is a significant benefit.

A Budget Can Help You Get Out of Debt:

When you’re in debt, you pay more for your original purchases. Interest payments cut into your income. Your money is no longer working for you – it’s going towards interest and fees. The financial burden this creates can limit your family’s choices. Using a budget to help pay off debt allows you to take your money and redirect it toward those items and goals that are a priority in your life.

Budgeting & Bankruptcy: Getting Out of Debt

In some cases, creating a clear budget can make it perfectly obvious that you don’t have sufficient income to cover your bills or your basic needs. If this is the case, reevaluate your numbers to ensure that you can’t eliminate any expenditures. If it’s not possible, you may need to consider alternate solutions. One solution for families who are buried in debt without the means to pay it off is bankruptcy.

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5 Things To Avoid Before Filing Bankruptcy

Mon, 16 Aug 2021 20:33:00 GMT

If you are thinking about filing bankruptcy, there are a lot of things you are probably trying to remember to do, but you may not be paying attention to the things you should not do.

5 Things You Should Not Do Before Filing Bankruptcy:

Don’t Use Credit Cards or Luxury Items:

If you are planning to file bankruptcy and you are thinking about purchasing something using a credit card, and you aren’t sure if you should, the answer is probably no. If you aren’t sure if an item qualifies as a “luxury” item or not, it’s safe to assume it does qualify. Unless it’s an essential or an emergency, do not consider using a credit card to make it happen.

Don’t Take Out Cash Advances:

Taking out a cash advance is an even worse decision than making a charge card purchase before filing bankruptcy . Do not take out a cash advance, do not tap into a home equity line, and do not raid your 401(k).

Don’t Pick & Choose Loans to Pay:

Bankruptcy law determines which creditors receive priority for repayment purposes. Do not attempt to pick and choose certain loans to repay prior to filing bankruptcy. Picking and choosing some loans to repay in the months leading up to bankruptcy is a major red flag.

Don’t Forget to File Income Taxes:

Do not assume that you don’t need to file your income taxes because you are filing bankruptcy. The bankruptcy court will expect to see your income tax returns during the course of the bankruptcy process.

Don’t Hide Money or Other Assets:

There are too many consumers that try to get around bankruptcy laws by attempting to hide or “gift” assets that should be included in their bankruptcy filing. Don’t give away your stuff (including jewelry, property, electronics, vehicles, etc.) to friends or relatives before filing bankruptcy. The court will likely assume you did so with the agreement that they will give it back to you later; and they will not be quick to let it go.

If you are filing bankruptcy and you have questions about bankruptcy and the bankruptcy process, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Why Are There So Many Bankruptcies Filed in Georgia?

Thu, 12 Aug 2021 20:30:00 GMT

Did you know that Georgia ranks 3rd in the nation for bankruptcy filings?

Georgia Remains Among the Top 3 States in the Nation for Bankruptcy Filings

When it comes to bankruptcy, you might say Georgia has more than its fair share. Georgia remains among the top three states in the US for personal bankruptcy filings. And these numbers are coming in alongside numbers indicating all-time unemployment rate lows.

The Number of Bankruptcy Filings in Georgia:

The state of Georgia’s overall bankruptcy filing numbers are down, but personal or consumer bankruptcies are still significantly more widespread in Georgia in comparison to the rest of the nation. In October, Georgia saw 4.43 bankruptcy filings for every 1,000 people. These numbers put Georgia near the top with only Alabama and Tennessee showing higher numbers. The national rate is around 2.51. (American Bankruptcy Institute data from Epiq Systems).

Why Does Georgia Have So Many Bankruptcy Filings?

Considering stats and studies about the number of bankruptcy filings in various states throughout the nation shows us that Georgia has a high number of bankruptcies, but why are there so many bankruptcy filings in Georgia ? The state’s rank is due to a number of different factors:

Wage Growth & Cost of Living:

While Georgia is experiencing low unemployment rates, the state’s overall wage growth is nowhere near in line with the area’s cost of living increases. Consumers aren’t able to find employment equal to their education or capable of supporting an average lifestyle. Possibly in response to this escalating situation, Georgia’s federal bankruptcy courts have been enacting rules that make it easier for the typical consumer to seek relief from overwhelming debt. When handling legitimate bankruptcy filings, Georgia bankruptcy courts generally move quickly.

If you have questions about filing bankruptcy or the bankruptcy process in Georgia , we can help. Find out more about getting a fresh financial start through bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

The post Why Are There So Many Bankruptcies Filed in Georgia? appeared first on Kenneth C. Rannick, P.C. .

Is Filing Bankruptcy Different If You’re a Single Parent?

Tue, 10 Aug 2021 20:27:00 GMT

After divorce, single parents face new challenges that come with co-parenting, but they also have to face the struggle of handling things on their own. Many of the struggles single parents face often circle around money and finances. Financial struggles are one of the most common issues the average single parent faces.

Most Common Financial Struggles Single Parents Face:

Single parents must quickly learn to manage all their expenses on their own, and in many cases, they must abruptly learn to juggle expenses with one income instead of two. Managing household expenses means mortgage payments or rent, car payments, credit card debt, childcare expenses, and much more. Even if there is a child support order or spousal support order in place, it can be difficult to put in place and manage a feasible budget without the help of a second person. Being on your own comes with a lot of additional responsibility; and a large portion of the weight comes from financial issues.

Financial Difficulties Tend to Be Heavier When You’re a Single Parent

Some studies indicate that single moms are about twice as likely to file bankruptcy in comparison to single women without kids. Financial difficulties just tend to be heavier when you’re a single parent. For example, when you’re a single parent, the loss of a job could mean the loss of health insurance for your entire family and there’s no “second” parent with health benefits to provide a safety net. Considering that many bankruptcies are a result of medical debt, it’s less surprising that the likelihood of filing bankruptcy increases significantly for a single parent.

Is Bankruptcy a Good Option for Single Parents?

If you’re a single parent, you are probably always considering different options that could make your child’s life even better. When you’re a single parent facing financial struggles, this can be a tall order. When bankruptcy becomes a serious consideration, how do you know if it is your best option? The best thing to do if you are a single parent drowning in debt and worried it is negatively affecting your child’s life and your home life in general, is to be proactive. Take action. Don’t ignore the problem until it escalates. Seriously consider the protections of bankruptcy before the problem is unbearable.

When a Single Parent Should Consider Bankruptcy:

Bankruptcy is an effective tool for single parents drowning in debt. When facing financial issues, filing bankruptcy can mean a reset or a “fresh” financial start. Many bankruptcy filers find that the bankruptcy process effectively relieves a large portion of their daily stress related to out of control debt. With a fresh financial start, the future suddenly looks brighter and today feels lighter.

If you have questions about filing Tennessee or Georgia bankruptcy and you want to discuss how bankruptcy can help single parents, get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

The post Is Filing Bankruptcy Different If You’re a Single Parent? appeared first on Kenneth C. Rannick, P.C. .

How Does Filing Bankruptcy Affect Child Support?

Fri, 06 Aug 2021 20:22:00 GMT

If you are divorced, and have a custody agreement with a child support order, a bankruptcy filing can bring up a lot of questions. The most important question is how does filing bankruptcy affect child support?

Does Bankruptcy Clear Out Child Support Arrearages?

If you are divorced and you are obligated to pay child support, bankruptcy does not wipe out what you owe or modify future child support obligations. If you are behind on your child support payments and considering filing bankruptcy, there are a few things you should consider. The automatic stay of bankruptcy that puts a stop to all collection activity does not stop child support from accruing. It also does not delay most family law proceedings, and bankruptcy trustees must fulfill child support reporting requirements.

Does Filing Bankruptcy Help If I’m Behind on Child Support?

However, that doesn’t mean that bankruptcy doesn’t help if you’re struggling to pay your child support. The relief bankruptcy can provide from other debts, can significantly reduce the financial pressure and leave funds available to cover the required child support payments. When filing bankruptcy with child support arrearages, the bankruptcy trustee will pay any past due child support first. Once the Chapter 7 bankruptcy is closed, the child support obligation remains in place along with any property division balances. If you filed a Chapter 13 bankruptcy, past due child support is paid off over three to five years. However, in a Chapter 13 bankruptcy, it may be possible to wipe out a property division balance.

If you need help filing bankruptcy, or if you have questions about how filing bankruptcy could affect your child support order, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Understanding Bankruptcy: A Glossary of Common Bankruptcy Terms

Wed, 04 Aug 2021 16:59:00 GMT

When you’re faced with a financial crisis, you’re under an extreme amount of stress. One of the main benefits of turning to the protections of bankruptcy is alleviating this extreme stress. However, many bankruptcy petitioners find themselves regularly lost and confused about what’s going on or what documents mean because they simply aren’t familiar with bankruptcy terminology. If you are filing bankruptcy or considering filing bankruptcy, minimize the possible confusion by familiarizing yourself with common bankruptcy terms.

Glossary of Common Consumer Bankruptcy Terms:

341 Meeting (or the Meeting of the Creditors): A meeting at which the debtor is questioned under oath by the trustee, examiner, or the US trustee about financial affairs. Creditors are invited to attend the meeting and ask the petitioner questions, but most do not attend.

Assume: An agreement to continue performing duties under a lease or contract.

Automatic Stay: An injunction that automatically stops collection activity against the petitioner like lawsuits, foreclosure, garnishments, etc. the automatic stay goes into effect as soon as a bankruptcy petition is filed.

Bankruptcy: A legal procedure for dealing with debt problems through a case filed under one of the chapters of title 11 of the United States Code (the Bankruptcy Code).

Bankruptcy Code: A common reference to federal bankruptcy law in title 11 of the United States Code (11 U.S.C. § 101-1330).

Bankruptcy Court: A unit of the district court with bankruptcy judges in regular active service.

Bankruptcy Estate: All legal or equitable interests belonging to the petitioner in property, both real and personal, at the date and time of the bankruptcy filing.

Bankruptcy Judge: A judicial officer of the United States Bankruptcy Court that has the decision-making power over federal bankruptcy cases.

Bankruptcy Petition: The formal request filed with the bankruptcy court seeking protection through the federal bankruptcy laws.

Bankruptcy Trustee: The individual or corporation appointed in a bankruptcy case to represent the interests of the bankruptcy estate and the petitioner’s creditors.

Chapter 7: A type of bankruptcy that provides “liquidation” including the sale of nonexempt property belonging to the bankruptcy estate with the proceeds distributed to the petitioner’s creditors.

Chapter 7 Trustee: The individual appointed in a chapter 7 bankruptcy case to represent the interests of the bankruptcy estate and the petitioner’s unsecured creditors. (The Chapter 7 bankruptcy trustee is responsible for reviewing the debtor’s petition and schedules, liquidating any property of the estate, and making distributions to creditors when proceeds are available. The Chapter 7 bankruptcy trustee may also bring actions against creditors or the petitioner to recover property of the bankruptcy estate.)

Chapter 13: A type of bankruptcy that provides adjustment of debts for an individual who has regular income. (In a Chapter 13 bankruptcy, debtors keep property and pay debts over time using a bankruptcy court approved payment plan that usually lasts from three to five years.)

Chapter 13 Trustee: The individual appointed to administer a chapter 13 bankruptcy case. (In addition to the responsibilities of a chapter 7 trustee, a chapter 13 trustee is also responsible for overseeing the debtor’s payment plan, receiving the monthly payments from the petitioner, and disbursing plan payments to the petitioner’s creditors.)

Claim: A creditor’s assertion of a right to receive payment from a debtor or from the bankruptcy estate.

Confirmation: The bankruptcy judge’s approval of a plan of reorganization in a Chapter 13 bankruptcy.

Consumer Bankruptcy: A bankruptcy case filed by a debtor who has mostly consumer debt.

Consumer Debt: Debts incurred for personal reasons (as opposed to business reasons).

Creditor: A person or business to which the petitioner owes money.

Credit Counseling: Usually a nonprofit budget and credit counseling agency offering individual or group counseling required for consumer bankruptcy petitioners prior to filing.

Current Monthly Income: The average monthly income the debtor receives over six calendar months prior to filing a bankruptcy case, including regular contributions to household expenses from non debtors and any income from the petitioner’s spouse if the bankruptcy petition is a joint petition, but not including SSI or payments received because the petitioner is the victim of certain crimes.

Debtor: A person who files a petition for relief under federal bankruptcy law.

Debtor Education: The required “instructional course” on personal financial management a debtor is required to complete before receiving a chapter 7 or chapter 13 bankruptcy discharge.

Discharge: A release from personal liability releasing a debtor from personal liability for certain debts known as dischargeable debts and preventing creditors owed the debts from taking any action against the debtor or the debtor’s property to collect on “discharged” debts.

Dischargeable Debt: Any debt for which the court can legally eliminate the debtor’s personal liability.

Equity: The value remaining in a petitioner’s property after liens and other creditors’ interests are considered.

Executory Contract or Lease: Usually references a contract or lease under which both parties involved agree to certain duties that remain to be performed. (If a contract or lease is executory, the petitioner may assume the lease or contract or reject it.)

Exempt: When a property belonging to the debtor is protected from creditors; exempt property cannot be sold by the bankruptcy trustee in order to pay creditors.

Exempt Property: Property or specified value in a property that is exempt from sale by the bankruptcy trustee. The debtor is allowed to retain exempt property, free from the claims of creditors who do not have liens.

Exemption: Property federal Bankruptcy Code or applicable state law allows a petitioner to keep without fear it will be sold in order to distribute the proceeds to pay creditors.

Fraudulent Transfer: Any transfer of a petitioner’s property made with intentions to defraud the bankruptcy court or for which the debtor receives less than the transferred property’s accurate value.

Insider (of individual debtor): A reference to any relative of the debtor, or a debtor’s general partner, partnership in which the debtor is a general partner, a general partner of a debtor, or a corporation for which the debtor is an officer or director or other person in control.

Joint Petition: One bankruptcy petition filed by a husband and wife jointly.

Lien: A charge upon specific property designed to secure payment of a debt.

Liquidation: The sale of a petitioner’s nonexempt property with the proceeds distributor amongst creditors to pay towards the petitioner’s debt.

Means Test: A standard calculation used to determine if a bankruptcy petitioner is eligible to file chapter 7 bankruptcy.

Motion To Lift Automatic Stay: A request filed by a creditor to allow them to take action against a bankruptcy petitioner or their property that is prohibited by the bankruptcy’s automatic stay.

No-Asset Case: A chapter 7 bankruptcy case with no associated assets available to satisfy any portion of the unsecured claims associated with the case.

Nondischargeable Debt: Any debt that cannot be eliminated in a bankruptcy discharge.

Objection to Discharge: An objection (on the part of the trustee or a creditor) to the debtor receiving a release from personal liability pertaining to certain discharged debts.

Objection to Exemptions: An objection (on the part of the trustee or a creditor) to a debtor’s claim that certain property is exempt.

Plaintiff: Any person or entity that files a formal complaint with the court.

Plan: In relation to a chapter 13 bankruptcy, a debtor’s detailed description of how they plan to pay creditors’ claims over a fixed period of time (typically 3 or 5 years).

Preferential Debt Payment: Any debt payment made to a creditor during the 90-day period prior to the bankruptcy filing (or within one year if the creditor was an insider) that totals more than the creditor would receive through the chapter 7 bankruptcy case.

Priority: If there is not enough money available in the bankruptcy estate to pay all unsecured claims, priority refers to the Bankruptcy Code’s statutory ranking of unsecured claims defining the order in which they are paid.

Priority Claim: Any unsecured claim entitled to payment ahead of other unsecured claims that are not entitled to priority status.

Proof of Claim: A written statement (official form required) including the reason a debtor owes a creditor money.

Property Of The Estate: All legal or equitable interests in property belonging to the debtor as of the commencement of the bankruptcy case.

Reaffirmation Agreement: An agreement by a chapter 7 debtor to continue paying a debt after the bankruptcy that would otherwise be included in the discharge of debt. The reaffirmation agreement is usually a means of retaining property that would otherwise be surrendered during the course of bankruptcy.

Schedules: A list submitted by the debtor along with the petition (or immediately following the petition) detailing all the debtor’s assets, liabilities, and financial info. (There are official forms debtor’s are required to use.)

Secured Creditor: An individual or business holding a claim against the debtor that is secured by a lien on property of the estate.

Secured Debt: Any debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific property upon default.

Statement of Financial Affairs: A series of questions debtors must answer in writing regarding different sources of income, transfers of property, creditor lawsuits, etc. (There is an official form required).

Statement of Intention: A declaration made by chapter 7 debtors regarding their plans to deal with consumer debts secured by property of the bankruptcy estate.

Substantial Abuse: A consumer bankruptcy case in which the court determines that granting relief under bankruptcy law would be an abuse of chapter 7 because, for instance, the debtor is able to pay their debt.

Undersecured Claim: Any secured debt that is secured by property valued at less than the amount of the debt.

United States Trustee: A Justice Department Officer that supervises the administration of bankruptcy cases, estates, and trustees by monitoring plans and disclosure statements, monitoring creditors’ committees, monitoring fee application, and performing other statutory duties.

Unliquidated Claim: Any claim that has no specific value determined.

Unscheduled Debt: A debt that should have been included in the debtor’s schedule filed with the court, but was not included.

Unsecured Claim: Any claim or debt that is not secured by property; credit was extended based solely on a creditor’s assessment of the debtor’s future ability to repay the debt.

If you are filing bankruptcy and you have questions about bankruptcy and the bankruptcy process , please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

The post Understanding Bankruptcy: A Glossary of Common Bankruptcy Terms appeared first on Kenneth C. Rannick, P.C. .

How to Avoid Common Scams Targeting Bankruptcy Petitioners

Wed, 28 Jul 2021 16:56:00 GMT

Many individuals and families facing bankruptcy are also experiencing one of the most vulnerable time periods of their life. Sadly, this may make bankruptcy petitioners a target for scams.

Avoid Common Bankruptcy Scams:

When facing a financial crisis (like the type of financial crisis that leads many consumers to bankruptcy), it’s common to seek any possible solution. Unscrupulous individuals often try to capitalize on the situation by taking advantage of individuals undergoing hardship and facing bankruptcy. If you are considering bankruptcy, filing bankruptcy, or recently filed bankruptcy, stay aware of common bankruptcy scams so you can avoid them.

Different Types of Bankruptcy Scams

How Do You Recognize a Credit Counseling Scam?

There are legitimate credit counseling services available out there. In fact, some of them could be a good option for some individuals facing a crisis of debt. When dealing with a legitimate credit counseling service, they are very clear about fees for their services, and they do not make outlandish promises that working with them will completely turn your credit and financial life around. So how do you recognize a credit counseling scam if there are legitimate companies that actually do offer effective credit counseling services? If a credit counseling service is consistently offering to sell you products instead of providing actual advice or counsel, you may be working with a scammer. If you aren’t sure if the credit counseling service you are talking to is legitimate or not, compare their fees with other credit counseling services.

How Is Offering to Make Bankruptcy Easier a Scam?

Some scammers reach out to people in financial crisis who are likely to be considering bankruptcy, and they will offer to help make the bankruptcy easier. They claim they can help you get your credit reports, and find a bankruptcy attorney , and file paperwork necessary for your bankruptcy. It sounds good, but in reality, credit reports are available free of charge in most cases, it’s not difficult to find a bankruptcy attorney, and if someone is filing paperwork for your bankruptcy, you want it to be an experienced bankruptcy attorney. Otherwise, you run the risk of paying the sketchy company large fees, so they can make mistakes in your paperwork that could cause real damage to your bankruptcy case.

Scamming Companies that Offer to Stop Foreclosure:

Too often, scammers approach bankruptcy petitioners knowing the amount of emotional upheaval they are going through due to a home foreclosure. These scammers talk the petitioner into rerouting their mortgage payments to the scamming company instead of their lender or even urge the homeowner to sign the deed to their home over to the scamming company. In many cases, these companies take the homeowner’s money without ever contacting their lender about the foreclosure. Never make your mortgage payment to anyone or anything other than the bank that holds the note. If anyone tells you otherwise, consider it an immediate red flag.

If you have questions about filing bankruptcy or how to avoid common bankruptcy scams, we can help. Find out more about getting a fresh financial start through bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Does the Bankruptcy Trustee Sell Everything the Petitioner Owns?

Wed, 21 Jul 2021 16:54:00 GMT

Did you know that the bankruptcy trustee is in charge of all assets in your bankruptcy case? But that doesn’t mean he sells everything the bankruptcy petitioner owns.

What Property is the Bankruptcy Trustee Actually In Charge Of?

“All assets” refers to the estate or all legal or equitable interests of the petitioner in property as of the commencement of the bankruptcy case as well as any community property of the petitioner or the petitioner’s spouse (of the petitioner’s ex-spouse if there is not division of community assets available).

Does the Bankruptcy Trustee Sell All the Petitioner’s Assets During Bankruptcy?

A Chapter 7 trustee can sell assets if there is value in doing so that would benefit the petitioner’s creditors. Doing so is, in fact, the trustee’s duty. The trustee is in place to “collect and reduce to money the property of the estate for which such trustee serves…..” 11 U.S.C. § 704(a)(1). The trustee accomplishes this by selling property under 11 U.S.C. § 363(b). However, bankruptcy code also defines certain exemptions. If property qualifies as one of the designated bankruptcy exemptions (up to a certain value), it is exempt from sale by the trustee during the bankruptcy.

When Does the Bankruptcy Trustee Choose to Sell the Petitioner’s Property?

Not all assets are sold by the bankruptcy trustee. Exemptions, as discussed previously, are not eligible for sale. Additionally, before the trustee decides to sell property, they consider the property’s value less the costs of selling the property, and less any encumbrances (judgment liens, mortgages, etc.) less any exemptions. If the bankruptcy trustee determines that the nonexempt equity in a certain property is significant enough to warrant a sale, they will start the process of selling. For example, when in reference to the petitioner’s house, the trustee will generally begin the sale process by filing an application to employ a real estate broker.

If you have questions about filing Tennessee or Georgia bankruptcy and you want to discuss debt reaffirmation, get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post Does the Bankruptcy Trustee Sell Everything the Petitioner Owns? appeared first on Kenneth C. Rannick, P.C. .

Understanding Debt Reaffirmation in Georgia Bankruptcy

Wed, 14 Jul 2021 16:51:00 GMT

Did you recently file a Chapter 7 bankruptcy petition ? Are you considering filing a Chapter 7 bankruptcy petition? If so, there’s an important aspect of bankruptcy you should be aware of – debt reaffirmation.

What Is Debt Reaffirmation?

Debt reaffirmation is a legally enforceable written contract in which a Chapter 7 debtor agrees to repay all or a portion of debt that may otherwise have been discharged by the bankruptcy court.

How Assets Are Handled During Bankruptcy:

In Chapter 7 bankruptcy , the trustee is responsible for administering your bankruptcy estate. (Your bankruptcy estate consists of almost all of your property as of the date of the bankruptcy filing). The bankruptcy trustee identifies, collects, and sells all of the petitioner’s assets owned at the time the petition is filed, except any that fall in what is referred to as bankruptcy “exemptions.” (Items commonly considered exempt include: some personal items, maybe a vehicle (depending on value, etc.) and possibly some real estate). The money generated by the sale of the assets is distributed among the petitioner’s creditors.

The Debt Reaffirmation Process:

After filing a bankruptcy petition, a petitioner might want to repay a specific debt. For example, the petitioner may want to pay the debt associated with the vehicle they rely on to get to their place of employment. If you decide to pay a debt that would otherwise be included in the Chapter 7 bankruptcy’s discharge of debt, you are required to sign a reaffirmation agreement. The reaffirmation agreement is a document in which you promise to pay all or a portion of the debt. The document is filed with the court. While reaffirmation agreements are strictly voluntary, they are legally enforceable once they are completed, and filed. In addition to being voluntary, reaffirmation agreements must not place an undue burden on the petitioner or the petitioner’s family, and they must be in the best interest of the petitioner. Do not reaffirm a debt simply because a debtor asks you to; you are under no obligation to reaffirm any debts during your bankruptcy case.

Can a Reaffirmation Agreement Be Cancelled?

The reaffirmation agreement is legally enforceable, but it can be cancelled under certain circumstances:

If you need debt reaffirmation agreements or if you need to file a bankruptcy petition , call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Healthy Money Management After Bankruptcy

Wed, 07 Jul 2021 21:03:00 GMT

No one would deny that bankruptcy is stressful. Bankruptcy petitioners must sit as every source of income, each and every asset, and every dollar attached to their name is examined by the bankruptcy court. Once the process is over, and the discharge of debt is issued, you should enjoy the relief that washes over you. However, don’t sit back and enjoy it too long without making a few decisions about your financial future. Bankruptcy offers you a fresh financial start, but it’s up to you to make the most of it by developing healthy money management skills.

Healthy Money Management Skills After Bankruptcy: Recreate a Budget

You may already have a budget, but that old budget may very well be one of the things that led you down the path to bankruptcy in the first place. Examine your old budget, and identify any problem areas. It’s hard to fix a problem unless you know what the problem is, and you might be able to identify a few problem areas by looking at the budget you had in place in the months or years leading up to your bankruptcy filing. Once you’ve identified any problem areas, rewrite your budget. Make sure to include fixed expenses (rent or mortgage, car payment, etc.), variable expenses (food, entertainment, clothing, etc.), and irregular expenses (medical costs, some insurance payments, holiday gifts, travel, annual membership fees, etc.). Include your target savings rate (many choose to aim for 10% of their income). Go through your list of expenses, and attempt to lower or eliminate expenses.

Healthy Money Management Skills After Bankruptcy: Set Up Savings

See if your bank offers automatic transfers for savings. Setting up automated savings significantly increases successful savings rates. Many find that it’s a good idea to set up a savings account at a different bank, so their savings are not as accessible. It’s also a good idea to ask your employer if there is an option to “split” the direct deposit of your paycheck to allow you to immediately deposit a designated portion to savings each pay day. Immediately following bankruptcy, it’s a good idea to first focus on saving up an Emergency Fund to cover those random expenses that pop up and send your finances reeling (random car repairs, or surprise medical bills, etc.) How much money you need in your emergency fund depends on you, and your lifestyle. It’s a personal decision. But start with a simple goal of $1,000, and then move toward one full month’s worth of expenses.

Healthy Money Management Skills After Bankruptcy: Start Rebuilding Your Credit

There are no quick fixes to credit post-bankruptcy, but it’s best to get started fairly quickly after receiving your discharge. We suggest giving creditors a few months to update the listings, and then pull your credit report. Find any errors. Most (or possibly all) debts should show a $0 balance. If there are any inaccuracies, or suspicious listings, contact the credit bureau to have it fixed. Obtain a secured credit card – it’s a good start to rebuilding your credit after filing bankruptcy. However, if you know credit cards are your kryptonite, avoid them. Don’t fall back into the same habits that led you to bankruptcy. If you do decide to open a secured card, make sure they report to all three credit bureaus before you decide to go with their company. Start by setting up one recurring bill to bill to the new secured card. You can even set up an automatic payment from your checking account to pay off the “balance” each month.

If you are filing bankruptcy and you are worried about staying clear of debt once you receive your bankruptcy discharge, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

The post Healthy Money Management After Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Who is a Good Candidate for a Chapter 13 Bankruptcy?

Wed, 30 Jun 2021 20:59:00 GMT

Filing Chapter 13 bankruptcy allows a petitioner to restructure and reduce debt through a repayment plan. The goal is to pay off debt through a manageable monthly payment. The most advantageous aspect of the Chapter 13 bankruptcy is that a petitioner doesn’t surrender any property to the bankruptcy court to pay creditors.

Do You Need More Time to Pay Off Your Debt?

If you just need more time to pay off your debt, you may be a good candidate for Chapter 13 bankruptcy. Sometimes petitioners just need a little more time to pay their bills. Instead of facing large sum demands for full payment, the Chapter 13 payment plan allows petitioners to approach their debt through small, monthly installments that are based on the amount the petitioner can actually afford to pay. The payment plan splits up unmanageable debt into smaller, approachable payments.

Do You Make Too Much Money to File Chapter 7 Bankruptcy?

In order to file Chapter 7 bankruptcy you must pass the Means Test. The Means Test is basically a mathematical equation to determine if you make enough money to pay your bills. If you do not pass the Means Test, you are not eligible to file Chapter 7 bankruptcy, and you could be a good candidate for Chapter 13 bankruptcy.

Are You Facing a Home Foreclosure or Vehicle Repossession?

If you are facing a foreclosure on your home, you may be a good candidate for Chapter 13 bankruptcy. Most consider Chapter 13 to be the best way to prevent mortgage lenders from foreclosing on a home or repossessing a vehicle (or other secured property). Since you are not discharging your debt in Chapter 13 bankruptcy, you keep all your possessions, including your car and your home. However, the Chapter 13 bankruptcy does issue the same automatic stay as the Chapter 7 bankruptcy, so all collection activity (including foreclosure, and repossession) cease immediately when the case is filed.

If you have questions about Chapter 13 bankruptcy and whether or not you are a good candidate for a Chapter 13 bankruptcy filing, we can help. Find out more about getting a fresh financial start through bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

The post Who is a Good Candidate for a Chapter 13 Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Is It Possible to Keep Bankruptcy Records Private?

Wed, 23 Jun 2021 20:56:00 GMT

A significant number of potential bankruptcy filers arrive at their first consultation with one question on their mind: Can I keep my bankruptcy records private? The answer, regrettably, is no. When you decide to file for bankruptcy , you cannot keep the bankruptcy records confidential.

Bankruptcy Records and Safety Concerns:

While bankruptcy records are a matter of public record, they are actually seen by very few entities. However, if you have concerns about your safety, please don’t dismiss the option of filing bankruptcy. Discuss your safety concerns with your Tennessee or Georgia bankruptcy attorney and options for keeping necessary information confidential before making any final decisions.

Understanding What Becomes Public Record When Filing Bankruptcy:

When filing bankruptcy, it is essential that you understand what becomes public record, and who can see the information. While the bankruptcy records are a matter of “public” record, you don’t need to be particularly concerned about the general public discovering your bankruptcy filing . In order to access bankruptcy records, an individual would need to visit the courthouse and scour the files. Unless you personally share information about your bankruptcy with friends, co-workers, or family, they will in likelihood never know it happened. Even when a bankruptcy filing is published in a newspaper, only those who read that newspaper’s listings of new filings will see the case info.

Who DOES See Your Bankruptcy Filing?

In most cases, very few people see a bankruptcy filing, but there are some people who will be notified or have access to bankruptcy case info.

Creditors (anyone the petitioner owes money to) are notified of the bankruptcy filing, and the automatic stay so they can stop all collection activity. The notification will include personal information for the petitioner including the social security number, and mailing address.
Court records are accessible to anyone (as previously noted). Bankruptcy records are kept on file , but in recent years, the court has made some changes to how info is reported, such as only listing the last four digits of a bankruptcy petitioner’s social security number on public record.
Credit bureaus are updated with the bankruptcy filing information, as well. The info is offered to bureaus so they can accurately note the credit report of petitioners, and will include the petitioner’s personal information like address and social security number.

If you have safety concerns related to filing Tennessee or Georgia bankruptcy and you want to find out what options are available, get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

The post Is It Possible to Keep Bankruptcy Records Private? appeared first on Kenneth C. Rannick, P.C. .

What Are the Two Most Common Types of Bankruptcy for Individuals?

Wed, 16 Jun 2021 20:52:00 GMT

Most people have a general understanding of bankruptcy. Many are also aware that there are different types of bankruptcy. However, understanding the two types of bankruptcy for individuals is the first step in successfully discharging your debt.

Two Types of Bankruptcy for Individuals: The Payment Plan & the Discharge of Debts

Chapter 13 Bankruptcy is often referred to as the “payment plan” bankruptcy because under the terms of the Chapter 13, the petitioner does not seek to discharge all debt. Instead the goal of the Chapter 13 bankruptcy is to restructure the petitioner’s payments so they are more manageable in comparison to the debtor’s income, or to get rid of a portion of the debt so the debtor can manage the payments on the remaining debt.

Chapter 7 Bankruptcy is the traditional form of bankruptcy that most are thinking of when they refer to bankruptcy generally. Through a Chapter 7 bankruptcy, the petitioner pays for or gives up any property connected to secured debts. Surrendered nonexempt property is sold by the bankruptcy trustee in order to pay off as much debt as possible. The petitioner keeps exempt property, and all debt is discharged (with the exception of non-dischargeable debts). When a debt is discharged by bankruptcy, the debtor is forever released from all obligations to pay the debt.

The Main Differences Between Chapter 13 and Chapter 7:

When comparing the two types of bankruptcy, a few differences are immediately obvious. First, is the estimated timeline. Chapter 7 seeks a discharge of debt immediately, so depending on the amount of time the bankruptcy process takes, the Chapter 7 bankruptcy may be complete within months. The Chapter 13 bankruptcy seeks relief through a bankruptcy court approved repayment plan, so the timeline for this type of bankruptcy is significantly longer (3-5 years depending on the approved payment plan). Second, is the type of relief. As already stated, the Chapter 7 seeks a discharge of all debt, while the Chapter 13 may seek a partial discharge, but does involve some repayment of debt through the payment plan. The other major difference between the two common types of bankruptcy for individuals, is income related. In order to qualify to file Chapter 7 bankruptcy, petitioners must meet the income requirement. More specifically, they must not have enough income to pay all of their debts. This is determined by the Means Test.

If you need help deciding which type of individual bankruptcy is best in your situation, call Kenneth C. Rannick P.C ., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Learn More About the Debtor Education Course Requirement

Wed, 09 Jun 2021 07:07:00 GMT

Before a bankruptcy filer can receive a discharge of debt in their Chapter 7 or Chapter 13 bankruptcy case , they must complete a Debtor Education Course. The Debtor Education Course requirement is sometimes referred to as the pre discharge debtor education course.

What is the Purpose of the Debtor Education Course Requirement?

The required debtor education course is designed to teach bankruptcy filers about managing money, and using credit wisely. The overall goal of the course is to teach people how to make smart financial choices that will help avoid needing to seek bankruptcy relief again at a later date.

What If You Don’t Complete the Debtor Education Requirement?

If a bankruptcy filer does not complete the debtor education requirement, the court will not issue a discharge of debt at the conclusion of the bankruptcy.

What to Expect from the Bankruptcy Debtor Education Course:

Your bankruptcy attorney can recommend a good debtor education course or you can find a list of approved debtor education providers in your area on the U.S. Trustee’s website. When taking the course, you can expect to learn about a variety of different money management, and credit related topics including:

Who is Required to Take the Bankruptcy Debtor Education Course?

There are very few exceptions to bankruptcy’s requirement for filers to complete a debtor education course. If you are filing bankruptcy, it is safe to assume you are required to complete a qualified debtor education course prior to receiving a discharge of debt. If you believe you may be exempt from bankruptcy’s debtor education course requirement, discuss the possibility with an experienced local bankruptcy attorney as soon as possible in order to avoid any delays in receiving your discharge of debt.

All the Details: Bankruptcy’s Debtor Education Course Requirement

When filing Chapter 7 bankruptcy, the debtor education course certificate of completion needs to be filed with the court no later than 60 days after the first scheduled date for the Meeting of the Creditors. When filing Chapter 13 bankruptcy, the certificate of completion needs to be filed before the last plan payment is made or before filing a motion to request a hardship discharge.

If you are facing bankruptcy and worried about the requirements to receive a bankruptcy discharge of debt, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Know the Key Deadlines in Your Bankruptcy Case

Wed, 02 Jun 2021 07:03:00 GMT

When filing a Chapter 7 bankruptcy, you can expect the standard bankruptcy process to take about four months. The process ends with a liquidation of unsecured assets or discharge of debts. When filing a Chapter 13 bankruptcy , where you pay back some or all of your debts, you can expect the standard bankruptcy process to take from three to five years. Regardless of the timeline of your bankruptcy, there are a few key deadlines that are key in every bankruptcy case.

3 Key Bankruptcy “Dates” to Remember:

Filing Date: The date the case is filed is the most important date or deadline in any bankruptcy case. This is the date on which the automatic stay goes into effect providing protection against creditors seeking payment.

341 Meeting Date: The 341 Meeting, or the Meeting of Creditors, is a key date in any bankruptcy case. Every bankruptcy filer is required to attend a 341 Meeting and answer questions under oath. The meeting is typically about 10 minutes long, takes place in a meeting room or office space (with your attorney by your side). At the Meeting of the Creditors, the Bankruptcy Trustee asks questions (usually yes or no questions), and the bankruptcy filer provides the answers. Creditors have the option to attend the Meeting of Creditors so they can ask questions, but they rarely attend, and if they do, it is generally not contentious.The date of the 341 Meeting is a key deadline in any bankruptcy case because the bankruptcy filer must attend in order to receive a discharge of debt.

Date of Discharge: The final key date in any bankruptcy case is the date of discharge. When the bankruptcy process is complete, and all bankruptcy requirements have been met, the bankruptcy filer receives a Discharge Order. The Discharge Order is an order of the court officially discharging and eliminating all eligible debts. The Discharge Order is the standard final conclusion to a bankruptcy case.

If you have questions about other important dates during the bankruptcy process , we can help. Find out more about getting a fresh financial start through bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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How to Protect Your Assets Using Bankruptcy Exemptions

Thu, 27 May 2021 06:59:00 GMT

When considering a bankruptcy filing, many people imagine repo companies arriving at their home to take their possessions, and sell them to the bank. They imagine being left standing empty handed. Debt free, but without their possessions. This is an exaggerated over-simplification of the bankruptcy process. The reality is that bankruptcy law includes bankruptcy exemptions designed to help protect property during bankruptcy.

What Are Chapter 7 Bankruptcy Exemptions?

Bankruptcy is intended to help people get back on their feed when they’ve lost control of their finances. To help do this, the government put a set of bankruptcy exemptions in place that allow bankruptcy filers to maintain their quality of life while resolving their debt. Any property that qualifies as “exempt” according to the bankruptcy exemptions is not included in the bankruptcy estate. Property that is not exempt becomes part of the bankruptcy estate. The bankruptcy trustee can sell it and divide the profit among the filer’s unsecured creditors.

Protecting Property with Bankruptcy Exemptions:

Most Chapter 7 bankruptcy exemptions have a limit, so anyone filing bankruptcy can protect certain types of property up to a capped amount. If the asset a debtor hopes to protect is valued at an amount above the stated exemption max, the asset would become part of the estate. When the bankruptcy trustee sells the asset, the exempt amount of the proceeds from the asset are returned to the debtor, and the remaining amount (above the exempt max) is divided amongst creditors.

Federal or State Bankruptcy Exemptions: Which Set Applies?

Some states allow bankruptcy filers to choose whether they want to use federal bankruptcy exemptions or state bankruptcy exemptions. However, Tennessee and Georgia do not offer this option. When filing bankruptcy in Tennessee or Georgia, bankruptcy exemptions are determined by state law, not the federal bankruptcy exemptions. (One exception is that Georgia and Tennessee filers can use the federal nonbankruptcy exemptions to protect specific disability benefits and retirement accounts). If you are filing bankruptcy in Tennessee or Georgia, make sure to discuss state exemptions and how they apply to your estate with an experienced local bankruptcy attorney.

How to Determine Which State Exemptions Apply:

The state you file bankruptcy in is typically determined by the state you have resided in for the past two years before the filing. If the state of residence was not constant for the two year period preceding bankruptcy, the place of “residence” of the bankruptcy filer may revert to the previous state of residence. Discuss the situation with a bankruptcy specialist to ensure you base your expectations for the bankruptcy on the correct state’s bankruptcy exemptions.

If you need to file Chapter 7 bankruptcy and are worried that you don’t understand how to maximize your bankruptcy exemptions , discuss your options with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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The Importance of Disclosing Assets in Bankruptcy

Fri, 21 May 2021 12:53:00 GMT

Bankruptcy law requires full disclosure of all assets. The disclosure of all assets is a basic premise of bankruptcy. The reason behind this requirement is to make sure the bankruptcy trustee, the court, and the filer’s creditors receive full, candid disclosures.

Bankruptcy Law Requires Full Disclosure* of Assets:

Section 521 of the Bankruptcy Code codifies the disclosure requirement.
Section 541 of the Bankruptcy code provides a definition of what assets become the property of the bankruptcy estate when a bankruptcy is filed. According to Section 541, the debtor’s “legal and equitable interests” become the property of the bankruptcy estate when the bankruptcy commences. Debtors must list all “contingent and liquidated claims of every nature,…counterclaims…, and rights to setoff claims” when filing bankruptcy. Section 541 encompasses every “conceivable interest of the debtor, future, non-possessory, contingent, speculative and derivative”.

Is Disclosing All Assets in Bankruptcy Important?

The importance of bankruptcy disclosure rules is emphasized by the fact that if a debtor conceals an asset (knowingly or fraudulently), they may face repercussions in civil litigation, and even risk the chance of criminal prosecution. Sections 521 and 541’s stringent disclosure requirements mean all claims of a debtor are considered property of the bankruptcy estate whether the debtor discloses them on their bankruptcy schedules or not.

Failing to List Assets in Bankruptcy:

Failing to disclose assets during bankruptcy could mean the omitted debt is not discharged. If you forget to list a debt in your bankruptcy, and you are nervous it may not be discharged along with the rest of your debt in the Chapter 7 bankruptcy, there are options available. If the bankruptcy case is still open, and you haven’t received a discharge of debt yet, you can amend the bankruptcy schedules to add the unlisted creditor. If the bankruptcy case is already closed, it may be necessary to file a Motion to Reopen the bankruptcy case and add the unlisted creditor. To reopen the case, there must be a good reason for the omission. If the court agrees to reopen the bankruptcy case, you can add the omitted creditor so it can be included in the Chapter 7 bankruptcy discharge.

If you need help filing bankruptcy and have questions about full disclosure of assets, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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How Does Divorve Affect My Bankruptcy Case?

Mon, 05 Apr 2021 16:50:00 GMT

Two of the most stressful (and emotionally charged) experiences people commonly endure in modern times are divorce and bankruptcy. So it’s only fair to acknowledge that dealing with both simultaneously could easily be overwhelming.

Divorce and Bankruptcy: Can They Happen Simultaneously?

While no one want to experience divorce or bankruptcy, they are now considered a fairly common occurrence. If you’re facing divorce and bankruptcy, you may take some small comfort in knowing that you aren’t the only one struggling with this type of scenario and that while it is stressful, others have made it through successfully.

Proven Strategies to Make the Process as Smooth as Possible:

While divorce and bankruptcy frequently occur “at the same time,” it’s unlikely the two separate proceedings can actually occur simultaneously. The motions may be filed at the same time, but most of the time the court will give one case or the other precedence. If both cases are pending at the same time, the bankruptcy case will usually be suspended until the divorce court completes the division of marital assets. In most cases, this means filing for divorce before filing bankruptcy makes more sense and removes some potential complications. When considering whether it is more beneficial to file divorce or bankruptcy first, you’ll need to look to your financial situation and applicable laws in your local area. However, there are some general situations in which filing bankruptcy before filing divorce could make more sense.

When Does Filing Bankruptcy Before Filing Divorce Make Sense?

It may make more sense to file bankruptcy before filing divorce is the potential doing so offers for cancelling joint marital debts. Cancelling out joint marital debts means skipping the need to divide them up as part of the divorce, and then following the division by immediately tackling the debts in two separate bankruptcies (one for each ex-spouse). Filing a joint bankruptcy does require cooperation between the two parties, but doing so can significantly streamline the divorce process, minimize legal fees associated with divorce, and avoid wasted time negotiating division of debt.

When Does It Make More Sense to File Divorce Before Filing Bankruptcy?

For many, it could be easier to pass the Chapter 7 means test after divorce. The means test, required to qualify for Chapter 7 bankruptcy filing, identifies those whose income falls below the median of their state. In households where one spouse earns the majority of the income or all the income, filing for divorce first could enable both spouses to qualify for Chapter 7 bankruptcy.

If you are dealing with debt and wondering how bankruptcy could affect your divorce, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Dealing with a Debt Your Creditor Sold to a Collection Agency

Wed, 31 Mar 2021 16:47:00 GMT

When a debt goes past due , creditors typically contact the debtor to collect payment. When a debt continues to fall more and more behind, many creditors may eventually sell the debt to a collection agency.

Can Debts Be Sold to Another Person or Company?

Under the Consumer Credit Act, debts can legally be sold or placed with another company at any time after the account holder fails to send the agreed upon payment. The selling of past due debts is a normal part of the overall debt collection process and applies to various types of debt including overdrafts, credit cards, loans, etc.

Why Don’t Creditors Collect their Own Debts?

Creditors build their business around their primary function of lending money and collecting it (with interest). Their business is not typically structured to function at optimum levels when the activity falls outside their intended services. One activity that occurs fairly often that falls outside the creditor’s intended business services is collections. Most creditors do not specialize in chasing debts that are not being paid as agreed, or tracking down people who aren’t paying their debt. Instead of attempting manage collections alongside their lending services, many creditors work with debt collection agencies or sell past due debts to debt purchasers.

Why Do Creditors Sell Past Due Debts?

When a debt purchaser or collection agency buys your debt, they do so in order to chase a debt on their own behalf rather than chasing debts owned by other companies. Creditors benefit from selling the debt because they no longer have to spend time, resources, or money attempting to collect, and they receive partial payment (from the debt purchaser) immediately.

Why Do Debt Purchasers Buy Debts?

A debt purchaser typically buys debts at less than their face value, but the debt purchaser is entitled to collect the full balance owed. This creates a margin for profit. The amount a debt collection pays for a debt is usually confidential.

If My Creditor Sells My Debt, Do I Still Have to Pay?

When a debt is sold to a debt purchaser, the money is now owed to the debt purchaser rather than the original creditor. The debt purchaser is held to the same rules and regulations as other creditors, and the account holder has the same legal rights. For instance, a debt purchase is not allowed to add on interest or charges to your original debt unless doing so is in accordance with the original credit agreement.

Dealing with a Debt Purchaser that Bought Your Debt:

When a debt is sold, your original creditor should let you know. The new “owner” of the debt should also contact you by letter to explain who they are and that you now need to pay them for the debt. This initial letter should include the debt purchaser’s name, and will often include the original account number from the creditor that sold the debt, so you should be able to identify what debt they are referencing. If you aren’t sure what debt is being referenced, contact the debt purchaser to request additional information. When dealing with a debt purchaser, it’s important to remember that your rights are the same as they were with the original creditor. You also have the right to dispute the debt if you don’t believe you are legally obligated to pay. For instance, if a debt is statute barred, included in a previous bankruptcy discharge, etc.

If you have questions about dealing with debt purchasers and collection agencies, we can help. Find out how to get a fresh start by filing bankruptcy . Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Is Anyone Exempt from Taking the Chapter 7 Means Test?

Mon, 29 Mar 2021 16:44:00 GMT

The Means Test is in place to determine whether or not an individual is eligible to file Chapter 7 bankruptcy, but is there anyone who is exempt from taking the Chapter 7 means test?

Who Is Exempt From Taking the Bankruptcy Means Test?

If you qualify for an exemption on the Statement of Exemption from Presumption of Abuse Under §707(b)(2) form, you don’t have to take the bankruptcy means test. Most people who are interested in filing Chapter 7 bankruptcy are required to pass the bankruptcy means test before filing. The means test, generally speaking, excludes those who earn a significant income. However, if you fall in one of the few exemptions, you aren’t required to take the test before filing and your income won’t affect your eligibility for Chapter 7 bankruptcy .

What Are the Means Test Exemption Requirements?

*A disabled veteran will be eligible for this means test exception by meeting one of two factors: 1) a disability rating of at least 30%, or 2) a discharge from active duty because of a disability that occurred in the line of duty.
**A military reservist or National Guard member called to active duty after September 11, 2001 may qualify for a Chapter 7 means test exemption if they were on active duty or performed a homeland defense activity for at least 90 days. If applicable, the exemption would apply during that time and for 540 days afterward. Once the 540-day exclusion period ends, the means test form must be completed within 14 days.

When Dealing with Business or Non-Consumer Debt:

When most of the debt you hope to eliminate through Chapter 7 bankruptcy is business debt (non-consumer debt), you aren’t required to take the Chapter 7 means test. To consider this avenue, the business debt usually needs to account for more than 50% of your overall debt with your bankruptcy court determining how to specifically calculate that percentage; it could be total amount owed or total number of debts owed, etc.

How Does the Chapter 7 Means Test Define “Business Debt?”

There isn’t one official rule regarding what constitutes a business debt, but courts usually consider the purpose of the debt when making the classification for the purposes of bankruptcy. Non-consumer or business debts are created when attempting to generate a profit; for instance through a business venture. But in some cases, unexpected credit purchases or debts for the individual or the filer’s family may also be included in this category. Some examples of non-consumer or business debt include: car loans on business vehicles, debts owed to vendors or suppliers (of the business), personal guarantees or liabilities made on behalf of a business, necessary medical bills, some tax obligations, etc. However, without an official legal definition of “business debt,” each bankruptcy court determines what qualifies so it is essential to discuss the issue with a reputable, local bankruptcy attorney before making any plans that depend on debt qualifying as business debt.

When Is a Debt NOT a Business Debt?

Consumer debt is NOT a business debt. Consumer debt occurs when an individual meant to take out debt or credit for household, personal, or family expenses, services, or goods.

If you need to file Chapter bankruptcy and are worried the Chapter 7 means test, discuss your options with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Understanding Priority Unsecured Debts in Bankruptcy

Fri, 26 Mar 2021 16:39:00 GMT

If you are filing bankruptcy or considering filing in the future, it’s important to understand the difference between priority and non-priority unsecured debts.

Priority and Non-Priority Debts: What’s the Difference?

During a bankruptcy proceeding , the judge (with the help of the bankruptcy trustee) considers the filer’s outstanding debts and puts them in priority order. Outstanding debts refers to any claims by creditors (companies or individuals) the filer owes money. Each of the debts or “claims” is reviewed by the bankruptcy court and ranked according to their priority or significance. Debts determined as priority debts are considered more important according to federal bankruptcy law, and are addressed first before other competing claims are considered.

What Sort of Unsecured Debts are Considered Priority Debts?

What Sort of Unsecured Debts are Considered Non-Priority Debts?

How Are Priority Debts Treated Differently During Bankruptcy?

During Chapter 7 bankruptcy, if there are sufficient funds to cover payment of any of the filer’s debts, the creditors holding priority claims are paid first. During Chapter 13 bankruptcy, creditors holding priority claims are typically paid in full while nonpriority debts are usually provided a partial payment in accordance with the Chapter 13 payment plan. When assets are sold (during Chapter 7 bankruptcy), the proceeds are required to first cover priority debts.

If you need are filing bankruptcy and have questions about priority and non-priority debts, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Bankruptcy Filings for 55+ See a Significant Increase

Wed, 24 Mar 2021 04:51:00 GMT

The rate at which Americans age 55+ are filing bankruptcy has significantly increased over the last few decades.

Bankruptcies Surge Among Older Americans:

Since the early 1990s, the number of Americans over the age of 55 filing bankruptcy has tripled. America’s older generation is more likely than ever to seek protection from creditors through bankruptcy. According to a study written by academics from various institutions, including the University of Illinois and the University of Idaho (“Graying of US Bankruptcy: Fallout from Life in a Risk Society,”) when considering the pool of bankruptcy petitioners, the percentage of older Americans is at its highest point in history.

Statistics Academics Point to When Outlining Growth of Gray Bankruptcy:

*According to “Graying of US Bankruptcy: Fallout from Life in a Risk Society,” written by academics from various institutions, including the University of Illinois and University of Idaho

**According to a paper by Robert Lawless, University of Illinois law professor, and three collaborating colleagues.

What’s Behind the Surge in Gray Bankruptcies?

Some point to the aging of the US population when explaining the surge in gray bankruptcies. But this accounts for only a small portion of the increase. From 1991 to 2015, the 65+ population increased from 17% to 19.3%, which is nowhere near the same increase rate as seen for gray bankruptcy filings. The number of Americans 55 and older filing bankruptcy has seen dramatic increases since the early ’90s, and the increase is even sharper for Americans 65+.

Why Are Older Americans Turning to Bankruptcy?

One major factor many consider to be a significant contributor to the rise in gray bankruptcies is medical debt. 60% of older Americans cite medical debt as the reason behind their bankruptcy filing; they can’t pay their medical bills. The protections of bankruptcy offer a fresh start for those who fall on hard ties and cannot cover their financial obligations. Bankruptcy petitioners are no longer responsible for discharged debts.

If you need to file bankruptcy and have questions about seeking a discharge for medical debt, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Dealing With Debt Buyers in Bankruptcy

Wed, 17 Mar 2021 15:03:00 GMT

If a debt buyer sues you to collect a debt, it is usually best to respond to the lawsuit by challenging their right to collect.

What Should You Do If a Debt Buyer Sues You?

In many cases, when a debt buyer sues to collect a debt, there’s a good chance that the borrower can successfully challenge their right to collect. To challenge a debt buyer’s right to collect on a debt, you have to respond to the lawsuit seeking payment. The last thing you will not want to do is skip fighting it in court by calling their lawyer and “working it out” over the phone. You will likely have a default judgment rendered against you, and you will be stuck with a judgment to you might have otherwise been able to have defeated had you fought it in court.

How to Challenge a Debt Buyer’s Right to Collect:

Due to the complexity of the issues involved, this is something most defendants are incapable of executing without a lawyer. After all, it’s complicated. The rules of evidence will frustrate you if you try to go it alone.

Debt buyers generally seek payment by filing thousands of lawsuits every year. Their success depends on the fact that most consumers don’t fight the lawsuit. Due to their general business practices, a challenge to a debt buyer’s right to collect is likely to succeed. With a little prep work, you could persuade the debt buyer to drop their efforts to collect from you and persuade the judge to rule in your favor. When defending these types of cases in state court, and without the defendant ever filing a bankruptcy case at all, Ken Rannick has never lost a case against a debt buyer and every such case he has handled has been dismissed in the defendant’s favor.

Filing an Answer to a Debt Buyer’s Complaint:

When a debt buyer files a lawsuit against you, you’ll receive a summons and complaint (usually from certified mail or a process server). The summons indicates the time you are allowed before a response is required. If your answer is not filed with the court that date (and a copy mailed to the debt buyer’s attorney), a judgment is automatically entered against you for the amount the debt buyer requests. Don’t allow an automatic judgment to be entered. Instead, go through each allegation in the complaint and admit that the allegation is true, deny the allegation, or state that you do not have enough information to admit or deny it. The debt buyer is required to prove any allegation you do not admit. Include any affirmative defenses you may have. An affirmative defense is a defense that you must prove (such as the date of the original debt indicating the statute of limitations has expired), failure to state a claim upon which relief may be granted (this general defense applies when the complaint does not offer enough facts to support the claim), the plaintiff lacks standing (this applies in situations where the debt buyer cannot prove they own the debt), etc.

If you are dealing with debt buyers seeking payment and have questions about how bankruptcy could help , please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick has been certified as a Consumer Bankruptcy Specialist for over 25 years, and has achieved “Senior Specialist” status. You are in good hands with Kenneth C. Rannick P.C.

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Issues to Consider Before Signing a Reaffirmation Agreement

Thu, 11 Mar 2021 04:54:00 GMT

Are you filing bankruptcy ? Is your mortgage lender insisting that you sign a reaffirmation agreement for your residence? Should you reaffirm your mortgage note?

Is Signing a Reaffirmation Agreement a Good Idea?

Your agreement with your mortgage lender includes two parts: the note that is your promise to repay the borrowed funds and the mortgage document. The mortgage is filed with the local Registry of Deeds and provides the security for your repayment promise. The lender basically “secures” the funds they loaned for the home’s purchase with their ability to foreclose on the home by operation of the covenants contained in the mortgage document.

What Happens to the Note and Mortgage Documents in Bankruptcy?

When you file bankruptcy, the note (or promise to repay the money borrowed from the mortgage lender) is discharged through Bankruptcy Code. The covenants included in the mortgage documents remain intact. The result is that the bankruptcy filer no longer owes the money borrowed to purchase the home. Still, due to promises included in the mortgage documents, lenders can foreclose on the property when no monthly payments are received. Lenders do not like this scenario because, without the promise to pay in the note, they lose the ability to collect a deficiency if the foreclosure auction results in a sale price below the full amount owed. The lender can foreclose and sell the house at auction, but they risk losing money because their only course of action is to accept money from the auction sale price even if it is below value or below the amount owed on the property.

In order to protect and keep the house you may enter into a Reaffirmation Agreement which means that even though you could have discharged (i.e., wiped out) that debt, you none-the-less agree to not wipe out that debt; you will pay and keep the house!

Why Do Lenders Want You to Sign a Reaffirmation Agreement?

A Reaffirmation Agreement is a restatement of the original promise included in the note, a promise to pay the amount owed. The Reaffirmation Agreement keeps the promise to pay in place, so the debt associated with the mortgage is not discharged in bankruptcy. Reaffirmation Agreements must be in writing and filed in the Court where the associated bankruptcy case is pending. Before the lender may accept any payments under the agreement, the Reaffirmation Agreement must be approved by the Court. If your bankruptcy attorney signs the document, it may be approved without a hearing, but it may be necessary to attend a hearing before a Reaffirmation Agreement is approved.

Should You Sign that Reaffirmation Agreement?

If you are filing bankruptcy and your mortgage lender is urging you to sign a Reaffirmation Agreement, remember that almost all the benefits of doing so are for the lender. Discuss the situation with an experienced bankruptcy attorney before signing anything. One negative impact for the bankruptcy petitioner of not signing a Reaffirmation Agreement is that the mortgage lender is no longer obligated to report any voluntary payments to the credit bureaus. Another negative about not signing a reaffirmation has been, in some past cases a lender will not entertain a loan modification on a debt in which a debtor has retained the property and is paying on it. Unless you have significant equity in your real estate, you should probably think twice about signing a Reaffirmation Agreement. It’s also not a good idea to sign the agreement if you will have difficulty making your mortgage payments in the future.

If you have questions about signing a Reaffirmation Agreement during bankruptcy, we can help. Find out how to get a fresh start by filing bankruptcy . Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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What Happens When Chapter 13 Bankruptcy Payments Are Late?

Wed, 03 Mar 2021 15:02:00 GMT

Have you ever wondered what happens if you miss a Chapter 13 plan payment? The short answer is that your bankruptcy case could be dismissed, but this doesn’t happen immediately, so there is a chance to get back on track.

What Happens If I Miss a Chapter 13 Plan Payment?

When seeking a Chapter 13 bankruptcy discharge, petitioners must make their plan’s monthly payments to the bankruptcy court. As this is a requirement for Chapter 13 bankruptcy, you can see how missing a payment could jeopardize your entire bankruptcy case. In most cases, there are actions you can take to fix the situation.

How the Bankruptcy Court Handles Missed Chapter 13 Plan Payments:

Each Chapter 13 trustee handles missed payments differently. Different districts handle the process slightly differently, so it can be beneficial to consult with an experienced bankruptcy attorney familiar with the bankruptcy court and bankruptcy trustees in your local area if there is a problem with your Chapter 13 plan. If you miss a payment or know you will miss a payment, contact your local Tennessee or Georgia bankruptcy attorney as soon as possible.

When a Chapter 13 Bankruptcy Petitioner Misses a Plan Payment:

When a Chapter 13 bankruptcy petitioner misses a play payment, their bankruptcy trustee may file a “Motion to Dismiss for Material Default.” If the motion is granted, the bankruptcy case is dismissed. If the bankruptcy case is dismissed, the petitioner does not receive a discharge of debt. Most bankruptcy trustees will not immediately file a Motion to Dismiss for one missed payment – you may be okay if you catch up on the missed payment before the next payment is due. If your Chapter 13 plan payments get two months behind, most trustees will file the Motion to Dismiss. At three missed payments, almost every bankruptcy trustee will file the motion. Don’t consider this permission to miss a payment. As stated, every bankruptcy trustee handles missed payments differently, and yours could decide to file a motion immediately. Each payment missed also makes the problem more challenging to resolve. Be proactive if you fear a missed payment is on the horizon, and reach out to your bankruptcy attorney.

When Your Bankruptcy Trustee Files a Motion to Dismiss:

If you miss a Chapter 13 plan payment (or multiple payments), and your bankruptcy trustee files a Motion to Dismiss for Material Default, the court will schedule a hearing. If the issue isn’t resolved before the hearing, the bankruptcy judge will require an explanation for the missed payment/s. The judge takes any explanation into consideration when deciding if the bankruptcy case should be dismissed or if there is a more appropriate solution available. If a Motion to Dismiss is filed in your bankruptcy case, it is best to resolve the situation before the hearing.

Frequently the case is dismissed because of the default in payments. That does not necessarily mean that your life as you know it is over. Don’t give up hope that perhaps you might still retain your house and car! It is wise to immediately seek consultation with counsel. Ken Rannick frequently meets with debtors whose case has recently been dismissed and then accepts that debtor as a client, files a new case, (frequently with a lower plan payment that before), and the case successfully moves forward.

If you need to file Chapter 13 bankruptcy and are worried that you will miss a Chapter 13 bankruptcy plan payment, discuss your options with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Chapter 7 Bankruptcy: Not All Assets are At Risk

Wed, 17 Feb 2021 15:11:00 GMT

Do you know which assets are exempt during a bankruptcy case? Before filing, it is essential to understand the difference between an exempt asset and a non-exempt asset.

What is a Non-exempt asset During a Bankruptcy Case?

After filing Chapter 7 bankruptcy, certain assets (property you own) may be sold to pay creditors for debts owed. Assets that may be sold to repay creditors during Chapter 7 bankruptcy are called non-exempt assets. Assets the bankruptcy court considers non-exempt can vary depending on state and federal law, but generally speaking, non-exempt assets will include any of the following:

What Are Exempt Assets During a Bankruptcy Case?

Not all assets are at risk during a Chapter 7 bankruptcy. Some assets are considered “exempt” from bankruptcy, so the bankruptcy trustee cannot sell them to pay creditors. Bankruptcy exemptions determine exempt assets. Exempt assets are usually things the filer needs to live or work. Assets the bankruptcy court considers exempt can vary depending on state and federal law, but generally speaking, exempt assets will include any of the following:

What is a “No Asset” Bankruptcy Case?

If you file Chapter 7 bankruptcy and have no non-exempt assets, you will file a “no asset” bankruptcy case. In a no asset bankruptcy case, there are no assets available for the bankruptcy trustee to sell, so creditors won’t receive any payments due to the bankruptcy. Your bankruptcy attorney can review your case and determine which bankruptcy exemptions apply to your assets.

If you are one of the many struggling Americans looking for solutions and have questions about how bankruptcy could affect your life, work, or assets, please don’t hesitate to get in touch with Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

The post Chapter 7 Bankruptcy: Not All Assets are At Risk appeared first on Kenneth C. Rannick, P.C. .

How Is Social Security Handled During Bankruptcy?

Wed, 10 Feb 2021 15:08:00 GMT

If you live on a fixed income funded by Social Security benefits, and you are also facing a growing amount of credit card debt, medical debt, or other unsecured debt, bankruptcy may be a practical solution. However, many worry about how bankruptcy affects their Social Security benefits.

Is Social Security Income Protected During Bankruptcy?

If you are filing bankruptcy and are worried about your Social Security income, you should immediately know that Chapter 7 bankruptcy does not typically affect your Social Security income. While Social Security counts as “income” for federal tax purposes, it is not counted as “income” for bankruptcy. Certain types of income are almost always protected during bankruptcy, and they include Social Security Disability Insurance, Supplemental Security Income, and Social Security.

How Is Social Security Income Treated During the Means Test?

When qualifying for Chapter 7 bankruptcy, petitioners must first pass the means test. The means test determines eligibility by comparing the petitioner’s income to their geographical area’s average income. Means test income levels change about every three months. Social Security income is considered an asset rather than income during bankruptcy, so Social Security income doesn’t count on the means test. While Social Security income does not count as income during the means test, petitioners still need to list it in their bankruptcy paperwork. Working with an experienced bankruptcy attorney can help avoid any trouble later in your bankruptcy case from inaccurately reporting Social Security income to the bankruptcy trustee.

Avoid Commingling Social Security and Other Types of Income:

If you mix your Social Security income with funds from other sources, like the wages from a part-time job, the bankruptcy trustee could have questions. In some bankruptcy cases, the judge could declare that the commingled funds are not exempt. If this occurs, the bankruptcy trustee could use the money in the account, force you to pay it back and provide the funds as payment to creditors. To avoid this issue, it is wise to place Social Security income in a separate account from any other funds. The commingling problem is only triggered if you mix Social Security benefits with non-exempt income.

If you have questions about how to protect your Social Security income during bankruptcy, we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Bankruptcy Tips: How to Handle a Debt Collection Lawsuit

Wed, 03 Feb 2021 15:05:00 GMT

Has a process server served you legal papers regarding a debt collection lawsuit? Being served at home or work is not pleasant. If you are served debt collection lawsuit papers, you may not know how you should respond.

The Best Case Scenario: Avoid the Debt Collection Lawsuit

The best-case scenario avoids the debt collection lawsuit entirely by preventing the debt from reaching the point where the creditor files a lawsuit. Creditors do not want to file a lawsuit until they attempt to collect the debt using all other collection options available. If you are contacted about a debt, stay calm. Confirm whether the information they have is accurate or not. If contacted by a collection agency, request written proof that they own (or have been assigned) the debt and written proof that you owe the debt. If they are unable to provide these items, they may be unable to collect the debt.

3 Things To Do When Served with a Debt Collection Lawsuit

Do Not Ignore a Debt Collection Lawsuit

If you just got served with a debt collection lawsuit, you may have no idea what to do. The first thing you need to know is that ignoring the lawsuit is a bad idea. There are time limits to respond before a default judgment is entered against you, and the creditor will finish the case without you if you ignore the filing.

If Served with a Debt Collection Lawsuit, Gather All Documentation on the Debt:

Gather all the documents you can that relate to the debt listed in the lawsuit. The account’s history is essential since you may have paid off the account. Their information could be inaccurate, or the account may have been inactive so long that it is too late for the collector to collect on the debt or get a judgment.

Contact an Experienced Bankruptcy Attorney:

Contact an experienced bankruptcy attorney as soon as possible, and make sure to let them know that you have been served with a debt collection lawsuit. Be careful what you say, what you sign, or admit to any creditor or any creditor’s attorney. Even with a judgment entered against you, certain exemptions allow you to protect more of your income. For instance, a head of household has additional funds protected from wage garnishment, but if you inadvertently admit that you are not the head of household, you may forfeit this protection. It is best to consult an attorney as soon as possible and discuss options that could protect you from aggressive creditors.

If you need to file bankruptcy due to a debt collection lawsuit , discuss your options with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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3 Tips to Regain Your Financial Health After Bankruptcy

Fri, 22 Jan 2021 06:04:00 GMT

Going through a bankruptcy can be difficult, stressful, embarrassing, and damaging to your credit rating. Still, the fresh financial start promised by the bankruptcy promise is often well worth any consequences for those who qualify for bankruptcy protection. With a solid plan, bankruptcy petitioners can successfully recover from bankruptcy and restore their credit standing within a short time after filing. Consider some crucial tips regarding rebuilding your credit and regaining your financial health post-bankruptcy.

3 Tips to Regain Your Financial Health After Bankruptcy:

Post-Bankruptcy Recovery Tips: Check Your Credit Report

If you file a Chapter 7 bankruptcy, wait 90 to 120 days after receiving your discharge letter before checking your credit report, so the national credit bureaus (Experian, Equifax, and TransUnion) have time to update the bankruptcy information. Credit accounts discharged under Chapter 7 bankruptcy should be listed as “discharged in bankruptcy” and a zero dollar outstanding balance. If not listed as “charged off,” you should dispute the inaccuracy. If any credit accounts were not included in the bankruptcy discharge, make sure they are not listed as discharged and that payments are reported accurately. When filing a Chapter 13 bankruptcy, wait 90 to 120 days from the date of your Chapter 13 bankruptcy filing before requesting your credit reports. Credit accounts included in the Chapter 13 bankruptcy may or may not reflect an accurate status. Creditors are not required to report payments received during Chapter 13 repayment plans, but some will report. Make sure that any credit accounts excluded from the Chapter 13 bankruptcy are accurately reflecting payments. Once the payment period is complete and the Chapter 13 discharge is received, wait 120 days and check all three major credit reports. Ensure that all loans discharged (or paid) by the Chapter 13 bankruptcy are listed as closed with a zero balance.

Post-Bankruptcy Recovery Tips: Confirm Your Budget Quarterly

While staying on top of your credit report is essential, it’s just as important to properly manage your current income and expenses. Put your income and expenses down in writing each quarter (at a minimum). Stay on top of your expenses and live within your means (spend less money than you make), so you can take advantage of your fresh financial start.

Post-Bankruptcy Recovery Tips: Avoid Repeating Past Mistakes

Re-examine patterns in your past that led to bankruptcy. For some, the negative financial patterns will be spending – for others borrowing or failing to repay debt. Whatever negative patterns are evident, make sure not to repeat them. Avoid past mistakes (and new ones) with a realistic budget based on achievable money management goals. A budget based on realistic reflections of the current financial situation and goals is vital when creating a new, healthier financial path post-bankruptcy. Once you understand your credit situation and your current finances, you can start rebuilding your credit. Most start this process by obtaining a secured credit card.

If you need to file bankruptcy and have questions about the credit repair process after receiving a debt discharge, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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What Small Business Owners Should Know Before Filing Bankruptcy

Tue, 05 Jan 2021 16:24:00 GMT

Are you a small business owner considering filing bankruptcy? Our advice is to not hesitate – but not to rush in either.

Filing Bankruptcy: Chapter 7 or Chapter 13

No one wants to file bankruptcy or plans to file bankruptcy. However, in certains situations, bankruptcy can be a vital resource, and protection. Bankruptcy is essentially a legal process that allows individuals and businesses to wipe out debt or restructure debt (depending on which type of bankruptcy you file). Successful Chapter 7 bankruptcies result in a discharge of debt. Successful Chapter 13 bankruptcies involve a restructuring plan where (usually) part of the debt owed is repaid over 3-5 years.

Comparing Chapter 7 and Chapter 13 Bankruptcy for Small Business Owners:

Many individuals with a lot of debt are drawn to Chapter 7 bankruptcy since it wipes out all unsecured debt (credit cards, unsecured loans, etc.). If there’s a lot of debt, and not a lot of assets, Chapter 7 bankruptcy makes a lot of sense. However, for owners of small businesses, it’s important to note that Chapter 7 bankruptcy is often referred to as the “liquidation” bankruptcy because the bankruptcy trustee will close the business and liquidate the business’s assets to pay off debts whenever possible.

Personal Debts vs. Business Debts: Are You Personally Liable?

If your business is incorporated, you are not personally liable for the business’ debts. You could file either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy depending on the details of your situation. Chapter 7 bankruptcy is often a good choice for freelancers and sole proprietors who are underwater and whose business is not considered a separate entity (legally).

In Some Cases, You Could Lose Property When Filing Bankruptcy:

While bankruptcy is governed by federal law, your state bankruptcy exemptions determine how much property you are allowed to keep when filing bankruptcy. These amounts are called bankruptcy exemptions. One of the most common concerns when filing bankruptcy is whether or not petitioners will be able to keep their home. Tennessee’s homestead exemption allows you to exempt up to $5,000 of equity in your home. (This increases to $7,500 for joint owners and $25,000 if there is at least one dependent, minor child in the home). If you are 62 or above, you can exempt up to $12,500 of equity in your home ($20,000 if you are married, and $25,000 if your spouse is also 62 or above). Georgia’s homestead exemption is $21,500 (the amount is doubled if both the person filing and their spouse have an interest in the home). If the homestead exemption is not fully used, filers can use up to $10,000 of the unused portion to protect other personal property. This is known as the wildcard exemption. For small business owners, there are additional concerns regarding property loss since according to liquidation rules, most business assets fall outside of exemption rules.

If you are one of the many struggling small business owners looking for solutions, and you have questions about how bankruptcy could affect your business , please don’t hesitate to get in touch with Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

The post What Small Business Owners Should Know Before Filing Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Can I File Bankruptcy if I Am Unemployed?

Mon, 28 Dec 2020 16:22:00 GMT

There are many different reasons for filing bankruptcy, but one of the most common is unemployment. No one is ever completely prepared to be fired or laid off (financially or emotionally). An abrupt loss of income often escalates quickly into missed car payments and missed mortgage payments. If you have been laid off or fired, and you find yourself unemployed, don’t wait for things to get out of control, talk to an experienced Tennessee and Georgia bankruptcy attorney about how filing bankruptcy can help protect your savings and your retirement.

Is Filing Bankruptcy the Best Option?

During times of unemployment, most people dip into their savings to cover their everyday expenses. Turning to bankruptcy as an option can be a powerful lifeline to people with growing debts. If you are considering filing bankruptcy due to unemployment, talk to an experienced Georgia or Tennessee bankruptcy attorney about obtaining a discharge of debt through Chapter 7 bankruptcy.

Should I Pull Cash from an IRA or 401(k) to Pay Debts During Times of Unemployment?

When you access cash from IRAs or 401(k)s during times of unemployment, the early distributions may create tax issues and damage your future financial planning. It’s almost never a good idea to take early distributions from retirement accounts to pay debt, but it is an especially bad idea if you are unemployed. Before you tap into any retirement accounts to pay off debt or cover your day to day expenses during unemployment, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney.

Am I Eligible to File Bankruptcy If I Don’t Have a Job?

The first requirement to qualify to file Chapter 7 bankruptcy is the “means test.” The “test” determines eligibility to seek a discharge of debt through Chapter 7 (or determines how much you are required to pay back to creditors through a Chapter 13 bankruptcy). A period of unemployment in the six months prior to filing bankruptcy may actually be beneficial for the purpose of qualifying to file Chapter 7 bankruptcy.

If you have questions about how unemployment affects filing bankruptcy , we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

The post Can I File Bankruptcy if I Am Unemployed? appeared first on Kenneth C. Rannick, P.C. .

My Identity was Stolen, Will Bankruptcy Help?

Wed, 23 Dec 2020 16:19:00 GMT

If you’re wondering if bankruptcy fixed identify theft problems, you’re probably in a pretty rough spot. Getting your identity stolen can cause financial (and emotional) ripples in your life for years after the incident. With the popularity of online shopping, the common-nature of data breaches, and the sheer accessibility of new loans through online lenders, identity theft, while still a major concern, has also become a common one. If you’ve had your identity stolen, you know how difficult it is to get companies to stop seeking payment on fraudulent accounts. In many cases, collection companies and collectors require proof the debt is a result of identity theft. Sometimes, after receiving this proof, the collector will still send the unpaid debt to a collection agency. You may even end up attempting to prove the debt is not yours in court, which can be challenging (and expensive), and damaging to your credit rating in the meantime.

What About Filing Bankruptcy to Avoid the Problems Associated with Identity Theft?

Can you file bankruptcy on debts associated with identity theft? Yes, you can. Bankruptcy protection applies to debts resulting from identity theft, and can be useful even if you don’t have a clear idea who the creditors are and what they are owed. Debts associated with identity theft are almost always dischargeable, and creditors almost never try to fight them once they’re included in a bankruptcy filing.

How Does Filing Bankruptcy After Identity Theft Help Me:

Bankruptcy Can Help Rebuild Your Credit After Identity Theft:

When your identity is stolen and fraudulent accounts are opened in your name, they almost never get paid. Each month these bills go unpaid, they report negatively on your credit report as a “late” payment or “collections” account. The credit rating that creditors access to determine loan eligibility is at its roots a measurement of how long it has been since something bad happened to a financial account in your name. When you file bankruptcy, all current debts are marked with “discharged in bankruptcy” or “included in bankruptcy” at one time. Many bankruptcy petitioners see their credit rating start to improve the month after they file. When the bankruptcy is initially filed, the credit rating may go down (depending on where it was at that point in time), but after filing, the improvement begins.

If you need to file bankruptcy due to identity theft , discuss your options with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Can I File Bankruptcy Without My Spouse?

Fri, 18 Dec 2020 16:18:00 GMT

Most people assume they can file bankruptcy as a single person, but what about if you’re married? Did you know you can file as an individual even if you’re married?

Your Situation Determines Whether It Is Better to File Jointly or as an Individual:

The decision to file bankruptcy usually has more to do with the location of your home residence, and the property you own than who owes debt to who. Even if a spouse doesn’t want to file, and you are considering filing bankruptcy as an individual, the first step is to consider the household’s overall debt and asset picture (for both spouses).

Determining How to File Bankruptcy as a Married Individual: Who Owns the Property?

When a couple marries, there can be some confusion about who actually owns the property. When you get married, you don’t automatically become a co-owner of any property your new spouse owned prior to marriage. That property remains their separate property even if you live in a community property state. The only way to share ownership of property that a spouse owned prior to marriage is for the spouse who owned the property to give you joint ownership (deed, establish, transfer, or assign depending on the type of property).

Is Tennessee a Community Property State? What About Georgia?

No, Tennessee is not a community property state. Georgia is not a community property state either. Both Tennessee and Georgia are Common Law States, so property acquired during the marriage solely belongs only to the person who bought the property. The property does not automatically become part of the couple’s joint “community” property.

Determine Who Owes What Debt:

There can be a lot of confusion between married couples about who owns what property and the closely connected issue of who owes what debt. Just like the issue of property, marrying someone does not mean you automatically assume joint ownership of their debts that existed prior to the marriage. You are responsible for any debt you entered into on your own or that you enter jointly with your partner (whether you’re married or not).

Make a List:

Make a list of all property and debts associated with you, your spouse, and both you and your spouse. Determining who owns what and who owes what is the determining factor when it comes to deciding whether a married person should file bankruptcy individually or jointly with their spouse. .

If you need to file bankruptcy and you have questions about whether you should file jointly or individually, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Staying Out of Debt During the 2020 Holiday Season

Wed, 02 Dec 2020 03:54:00 GMT

The holiday season is full of temptations to spend money. If you have deep pockets and spending money lavishly, spontaneously, and often during the holiday season is in your financial plan, then that’s your prerogative. But for the average American, spending lavishly, spontaneously, and often during the holidays is not a good idea. In fact, a significant number of American households struggle to stay out of debt (or to avoid getting MORE in debt) every year during the holidays.

Americans Tend to Spend More During the Holidays Whether they Have More or Not

On average, Americans spend about $1,500-2,000 during the holiday season. And many put it on credit cards. 61% of people who already carry credit card balances, plan to add to their deficit during the holiday season. 35 million Americans entered the last holiday season with debt lingering from the previous year’s holiday season.

Avoid Temptation and Stay Out of Debt During the Holiday Season:

If you are one of the millions struggling with lingering holiday debt from year to year, and you need to file bankruptcy , please don’t hesitate to get in touch with Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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What To Do Now If You Think You Will Need to File Bankruptcy in 2021

Wed, 25 Nov 2020 03:51:00 GMT

2020 has been an unprecedented year. More than 22 million Americans have filed for unemployment. Cities and states across the country issued orders requiring companies to close their day-to-day operations, employees to stay home, and many to shelter in place all attempts to decrease the public’s exposure to the coronavirus. As the number of Americans who are out of work (or were out of work for a significant portion of 2020) grows, many expect the number of Americans considering bankruptcy in 2021 to increase.

High Unemployment Rates Typically Mean an Increase in Bankruptcy Filings:

With the number of Americans out of work increasing exponentially in 2020 (experts estimate the number of out of work Americans could reach 47 million or a 32% unemployment rate), many households across the country are worrying about how they’ll pay their rent, their bills, and still afford the essentials.

Before You Decide the Declare Bankruptcy in 2021:

If you are one of the countless Americans facing financial struggles due to the unprecedented measures taken to control the spread of the coronavirus, make sure you’ve considered all the options. Before you file:

Once You Decide to File Bankruptcy in 2021:

If you have exhausted all your options, and looking at your finances makes it clear that there is a bankruptcy in your future, you may need to accept that you need to file bankruptcy in 2021. Once you decide to file, make sure that you:

If you have questions about how to prepare to file bankruptcy in 2021 , we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

The post What To Do Now If You Think You Will Need to File Bankruptcy in 2021 appeared first on Kenneth C. Rannick, P.C. .

Top 3 Reasons to File Chapter 13 Bankruptcy Instead of Chapter 7 Bankruptcy

Wed, 18 Nov 2020 03:03:00 GMT

Are you filing bankruptcy? Are you unsure if you should file Chapter 7 bankruptcy or Chapter 13 bankruptcy? Friends and family may be advising you to file Chapter 7 bankruptcy so you can quickly receive a discharge of debt, but there are certain reasons that make filing Chapter 13 bankruptcy the right move.

Benefits of Bankruptcy Depend On Specific Life Circumstances:

Not everyone’s life and specific circumstances are the same; they may not even be similar. The vast differences between everyone’s life and circumstances can make comparing bankruptcy cases and benefits difficult. While Chapter 7 bankruptcy can be extremely beneficial, and many bankruptcy petitioners fall right inside the parameters that make them a good candidate for the liquidation bankruptcy, it is not the best choice in every situation.

Top 3 Reasons to File Chapter 13 Bankruptcy:

If you need to file bankruptcy , but you aren’t sure if you should file Chapter 7 or Chapter 13 bankruptcy, discuss your options with an experienced bankruptcy attorney. Don’t hesitate to call Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post Top 3 Reasons to File Chapter 13 Bankruptcy Instead of Chapter 7 Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

How to Approach Bankruptcy When You Have a Cosigner

Thu, 12 Nov 2020 05:47:00 GMT

If you have a loan with a cosigner, and you are considering bankruptcy , there are additional concerns to consider before making your final decision to file a petition.

If You Have a Cosigner When You File Chapter 7 Bankruptcy:

A Chapter 7 bankruptcy discharges most unsecured debts and allows the bankruptcy petitioner to keep secured debts (like car loans or mortgages on their home) if they agree to repay the loan. If a bankruptcy petitioner has a cosigner on a debt when they file Chapter 7 bankruptcy, the petitioner receives a discharge of the debt, but the debt isn’t erased. The cosigner will still be responsible for paying the debt.

Defining “Discharging a Debt” for Bankruptcy Petitioners:

When a Chapter 7 bankruptcy petitioner successfully completes their bankruptcy case, the final action is the court entering their discharge of debt. The Chapter 7 discharge of debt generally applies to unsecured loans and debts like hospital bills, other medical bills, credit card balances, personal loans, etc. When the court enters the discharge, the bankruptcy petitioner’s liability on their dischargeable debts is gone, but the debts are not gone. No longer being “liable” for the debt means that the bankruptcy petitioner is no longer legally responsible or obligated to repay the debts, and collectors are no longer legally able to collect from the bankruptcy petitioner on the debts. However, the discharge does not erase the debt or make it disappear. Any other person who is liable for any of the debts discharged in the bankruptcy, like a cosigner, is still responsible for paying the full balance of the debt unless they were included as a joint filer in the bankruptcy.

Disclose Cosigners In Your Bankruptcy Filing:

Bankruptcy petitioners are required to disclose any cosigners on debts included in their bankruptcy. The required bankruptcy paperwork includes Schedule H where petitioners are required to list any co-debtors, co-borrowers or cosigners. The information is used by the bankruptcy court to notify any cosigners of the bankruptcy filing.

If you need to file bankruptcy and you have questions about how it may affect your cosigners, call Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post How to Approach Bankruptcy When You Have a Cosigner appeared first on Kenneth C. Rannick, P.C. .

5 Things to Avoid Before Filing Chapter 7 Bankruptcy

Mon, 12 Oct 2020 09:32:00 GMT

Everyone talks about what you should do before you file bankruptcy. They discuss how you should decide if it’s the right answer for your situation. They catalog the benefits and the consequences. They provide details about bankruptcy filing requirements and offer suggestions on how to recover after receiving a bankruptcy discharge. But no one ever talks about what not to do before filing Chapter 7 bankruptcy.

5 Things to Avoid Before Filing Chapter 7 Bankruptcy:

If you need to file bankruptcy and are nervous about avoiding common bankruptcy mistakes , please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

The post 5 Things to Avoid Before Filing Chapter 7 Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Georgia Bankruptcy: Tax Debts & Tax Refunds

Thu, 08 Oct 2020 09:30:00 GMT

If you are filing bankruptcy, you may wonder how any tax refunds will be handled. What happens to tax refunds in bankruptcy ?

What Does a Tax Refund Have to Do with Bankruptcy?

A tax refund is money owed to an individual by the government because the individual overpaid taxes. The bankruptcy court recognizes any payment of money owed to the bankruptcy petitioner as an asset, similar to a bank account balance or real estate, so any expected or received tax refunds must be disclosed in the bankruptcy petition.

How Should I Notify the Bankruptcy Court of a Tax Refund?

In a Chapter 7 bankruptcy, if you haven’t received your refund, you need to disclose it to your attorney. Your lawyer may try to claim an “exemption” to help you keep the funds. (Bankruptcy exemptions are limited and apply to multiple types of assets such as bank accounts, other property, etc.) If you are filing Chapter 7 bankruptcy and you already received a tax refund before filing, then it is not an asset at the time of your bankruptcy filing. In this case, you would not be required to disclose the tax return or apply any bankruptcy exemptions to protect the amount.

Chapter 13 Bankruptcy and Tax Refunds:

A Chapter 13 bankruptcy lasts either 3 or 5 years. In some Chapter 13 bankruptcy repayment plans, the petitioner agrees to pay future tax refunds into the bankruptcy plan, but this depends on the payment plan presented (and approved) by the bankruptcy court. Not all Chapter 13 bankruptcy plans require the bankruptcy petitioner to pay their tax refunds to the court during their repayment plan. Suppose your Chapter 13 bankruptcy repayment plan is set up to pay your unsecured creditors less than 100% of the debts owed. In that case, you should ask your attorney about filing a motion requesting to keep all (or a portion) of any tax refunds during the payment plan so you can meet specific needs. The Trustee may request documentation to prove that the “need” is real and necessary, but this type of motion is usually granted. Discuss the details with your bankruptcy attorney.

Do you have questions about bankruptcy law and how to file bankruptcy ? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

The post Georgia Bankruptcy: Tax Debts & Tax Refunds appeared first on Kenneth C. Rannick, P.C. .

How Will My Bankruptcy Affect the Co-Signer on My Loan?

Tue, 06 Oct 2020 09:26:00 GMT

When you file Chapter 7 bankruptcy, secured and unsecured debts are discharged. Unsecured debts include credit card debts, medical debts, etc. Filing Chapter 7 bankruptcy also allows petitioners to keep property associated with secured debts such as houses or cars if they agree to repay the loan. But what happens when there is a cosigner on the debt?

Can You File Chapter 7 Bankruptcy If You Have a Cosigner on a Loan?

Yes, you can file Chapter 7 bankruptcy even if one or more of your debts has a cosigner, but your Chapter 7 bankruptcy does not relieve your cosigner of responsibility for the debt. If you file for Chapter 7 bankruptcy, and have a cosigner on a loan, the cosigner is still responsible for the debt. While Chapter 7 bankruptcy discharges most unsecured debts and allows you to keep property associated with secured debts (like your car or your home, etc.), a cosigner on a loan is still responsible for the debt. Bankruptcy does not eliminate a cosigner’s liability for the debt.

How Does a Chapter 7 Bankruptcy Discharge Work?

After successfully completing a Chapter 7 bankruptcy case , the court enters a discharge of your debts. The bankruptcy discharge applies to most unsecured debts, some tax obligations, and utilities. The bankruptcy discharge doesn’t typically apply to certain types of debt: student loans, child support, alimony, criminal fines or fees, etc. Once the discharge is entered, the bankruptcy petitioner’s liability for the debts is eliminated, but the debts themselves are not eliminated. Once the discharge is entered, your creditors can no longer collect from you on the debts.

Bankruptcy Discharge Applies to a Debtor’s Obligation for the Debt:

The discharge does not eliminate the debtor’s debt; it eliminates the debtor’s responsibility or liability for the debt. The bankruptcy discharge applies only to the bankruptcy petitioner. Liability for any debts included in the bankruptcy transfers to cosigners at the time of the discharge. The only exception is if the petitioner filed bankruptcy with their cosigner.

Bankruptcy Petitioners Are Required to Disclose Cosigners When Filing:

When petitioners file bankruptcy, they are required to list any co-debtors or co-borrowers on Schedule H. (This includes all cosigners on loans). Any co-signers are notified of the bankruptcy filing by the court.

If you have a cosigner and you need to file bankruptcy , please don’t hesitate to contact our experienced bankruptcy attorney to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. You are in good hands with Ken who is a certified Senior Consumer Bankruptcy Law Specialist.

The post How Will My Bankruptcy Affect the Co-Signer on My Loan? appeared first on Kenneth C. Rannick, P.C. .

Can a Bankruptcy Petitioner Appeal an Order that Denies a Chapter 13 Plan?

Fri, 02 Oct 2020 09:22:00 GMT

Did your Chapter 13 bankruptcy plan get denied? Most of the time, when the court denies a Chapter 13 plan, it’s because the debtor did not comply with requirements outlined by the court or by their own attorney.

For a Chapter 13 Bankruptcy Plan to be Confirmed, the Petitioner Must:

How Do Chapter 13 Bankruptcy Petitioners Make their Payments?

Your bankruptcy attorney will make sure that you know everything you need to know about your Chapter 13 bankruptcy plan payment. They have answers to all your frequently asked questions.

If the Court Denies Your Payment Plan, Can You Appeal?

Sometimes a judge may decide to deny confirmation of a Chapter 13 payment plan. In Chapter 13 bankruptcy, the debtor always proposes the original plan, but if the plan is denied, the debtor cannot appeal the decision. However, the petitioner can go back and file an amended plan. If the Chapter 13 payment plan complies with requirements and your experienced local bankruptcy attorney has not mentioned any problems or issues about your case, you shouldn’t need to worry about a denial.

If you have questions about submitting a Chapter 13 bankruptcy payment plan or how to respond if your Chapter 13 plan is denied, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a Consumer Bankruptcy Specialist on staff, You are in good hands with Ken Rannick, Kenneth C. Rannick P.C.

The post Can a Bankruptcy Petitioner Appeal an Order that Denies a Chapter 13 Plan? appeared first on Kenneth C. Rannick, P.C. .

How is Your Home Equity Handled When You Convert Your Chapter 13 to a Chapter 7 Bankruptcy?

Wed, 30 Sep 2020 09:19:00 GMT

Sometimes Chapter 13 bankruptcy petitioners experience a significant life change during their three or five year Chapter 13 bankruptcy payment plan and need to modify their monthly plan payments. Modifying your Chapter 13 bankruptcy monthly payment amount is possible. Still, there are also times when a Chapter 13 bankruptcy no longer works for the petitioner, and Chapter 13 needs to be converted to Chapter 7 bankruptcy. When a significant life change requires changing a Chapter 13 to a Chapter 7, many petitioners worry about their home.

Will You Lose Your House If You Convert Your Chapter 13 to Chapter 7?

How your home will be handled when converting from Chapter 13 to Chapter 7 bankruptcy depends on the amount of equity. Your primary residence is real property, and the trustee may sell any real property with excess equity to pay unsecured creditors. This leaves many Chapter 13 bankruptcy petitioners who face significant life changes hesitating to seek help about converting to Chapter 7 bankruptcy.

Consult with a Bankruptcy Attorney About Converting as Soon as Possible:

If you are struggling to make your Chapter 13 bankruptcy payments or you have experienced a significant life that will make it hard or impossible to continue making the payments you agreed to in your Chapter 13 bankruptcy , contact an experienced Tennessee or Georgia bankruptcy attorney as soon as you can. Your Chapter 13 bankruptcy hinges entirely on your ability to make on-time monthly payments for the full three or five-year plan. Don’t wait until you have missed a payment. Contact a bankruptcy attorney for help immediately.

But Is Your House in Danger if You Convert to Chapter 7 Bankruptcy?

The easy answer that’s not so easy to accept is: maybe. It all depends on the equity in your home. You may have filed Chapter 13 because you had far too much equity in your home to file Chapter 7 without losing your home. In this case, converting to Chapter 7 will mean losing the house. In some Chapter 13 conversion cases , the petitioner’s house’s equity is protected because the equity increased since they initially filed Chapter 13 bankruptcy. Regardless of how or why the equity is there, your Chapter 7 bankruptcy trustee has a job to do, and they will do it. But failing to make your Chapter 13 bankruptcy plan payments may have eerily similar results without the benefit of any discharge of debt.

If you are worried about converting your Chapter 13 bankruptcy to Chapter 7 bankruptcy, we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is a Senior Consumer Bankruptcy Law Specialist. Please get in touch. You are in good hands with Ken Rannick and Kenneth C. Rannick P.C.

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Is Chapter 13 a Better Option than Chapter 7 Bankruptcy?

Mon, 28 Sep 2020 09:17:00 GMT

It can be challenging to decide if it is better to file Chapter 7 or Chapter 13 bankruptcy. Both types of bankruptcy have advantages and disadvantages. Depending on your financial situation, one may be more beneficial for you and your family. If you aren’t sure which type of bankruptcy would be best, consider some of each type’s advantages and disadvantages.

Is Chapter 13 More “Responsible” and “Admirable?”

Many bankruptcy petitioners who seek out a bankruptcy attorney for help feel that filing Chapter 13 is better than filing Chapter 7 because they’re making an effort to pay back their debt; debt they knowingly took on and agreed to pay back. They feel that doing the right thing translates directly into “making an effort to pay back what they owe through a Chapter 13 bankruptcy.”

Do Creditors Look at Chapter 13 Bankruptcies More Positively?

In short, probably not. Many filers seeking information about filing Chapter 13 bankruptcy assume that financial institutions considering them for future credit opportunities will credit them for filing Chapter 13 and paying back a portion of their debt. They may even assume that doing so will mean a higher credit score post-bankruptcy than if they were to file a Chapter 7 bankruptcy ending in a debt discharge. In reality, it’s usually the opposite. When it comes to rehabilitating your credit post-bankruptcy, Chapter 7 is often the better choice because the timeline is so much shorter.

How Long Does Filing Bankruptcy Take?

Chapter 13 bankruptcy can last up to 5 years, and it isn’t easy to start repairing your credit until the process is complete. When seeking credit post-bankruptcy, most creditors will want to know if the bankruptcy is over; that is where they tend to focus. Typical Chapter 7 bankruptcy cases last only a few months from filing the petition to receiving a discharge. A Chapter 13 bankruptcy takes up to 3 to 5 years because that is the length of the payment plan Chapter 13 petitioners must complete. The Chapter 7 is much faster.

Which Bankruptcy Stays On Your Credit Report Longer?

Both Chapter 13 and Chapter 7 bankruptcy are bankruptcies, and they are listed as just that on your credit report. But there is one significant difference. The Chapter 13 bankruptcy stays on your credit report for seven years, while the Chapter 7 bankruptcy discharge is listed on your credit report for ten years. Chapter 7 stays on your credit report three years longer than Chapter 13.

Many people, just like you, are struggling to make ends meet and turning to bankruptcy . If you are worried about rebuilding your credit score post-bankruptcy, you’re not alone. If you need to talk about your options and how to get a fresh financial start by filing bankruptcy, trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We can help you determine your best options. We help good people through bad times every day, and we can help you, too.

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Is a Loan Modification More Effective than Bankruptcy?

Thu, 24 Sep 2020 08:13:00 GMT

Are you past due on your loans? Are you facing foreclosure? Countless homeowners experience similar situations every day. When you’re looking for options that can help you out of an impossible financial situation, you’ll probably eventually end up trying to figure out which is more effective – loan modification or bankruptcy?

What is a Loan Modification?

When reality hits and there aren’t a lot of great options, homeowners can feel hopeless. They search for a solution that will get them out of their current financial trouble but fear the harm any solution may do to their financial future. One standard option that homeowners in financial trouble consider is a loan modification. A loan modification allows past due homeowners to modify their monthly payment amount, so it is in a more affordable range for their current situation. Some loan modifications add past due payments to the tail end of the loan. The danger is frequently at the end of the modification term there is a quite large balloon payment due!

The Trouble with Loan Modification for Homeowners:

When it comes to loan modifications, not every homeowner or property will qualify. Some loan modifications are through government-managed programs that carry specific eligibility guidelines. Other loan modifications are offered through private lenders who have their internal requirements and guidelines for eligibility. In some cases, internal guidelines and requirements may not be applied consistently from case to case and borrower to borrower. Additionally, investment properties may be ineligible for a loan modification since many mortgage loan modification programs only offer their protection to personal residences.

For most mortgage loan modification applicants, the process is long and complicated. Many applicants may not know if they qualify or not for months, which means months of additional past due payments. This situation may lead homeowners directly into a foreclosure, which is exactly what they were attempting to avoid. Many homeowners that come away with Loan modifications do not understand the fine print and may have created a time bomb to explode in the distant future.

Considering the Bankruptcy Alternative:

Chapter 13 bankruptcy is an excellent alternative to mortgage loan modification. Filing Chapter 13 bankruptcy when past due on your mortgage has several benefits:

If you have questions about how bankruptcy can help homeowners behind on their mortgage, we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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How To Save Your Car in Tennessee Bankruptcy

Tue, 22 Sep 2020 09:10:00 GMT

Many bankruptcy petitioners worry about whether or not they can save their car if they file Tennessee bankruptcy. By filing Chapter 13 bankruptcy, Tennessee bankruptcy petitioners can save their house and their car.

What Type of Debt is an Auto Loan?

A bankruptcy petitioner’s car loan is a secured debt, so if loan payments aren’t made, the lender can take the property back. Secured debt cant be discharged during bankruptcy like unsecured debt, however the lien must be paid off over the term of the plan to obtain a clear title at the end of the case.

What is an Unsecured Debt?

Unsecured debt is not debt to pay off a loan with collateral, Normally unsecured debt (like credit cards or medical bills) can be completely discharged in bankruptcy.

Can Bankruptcy Help if You Have Secured Debt?

A well experienced bankruptcy attorney can help petitioners structure a plan to pay secured debts back over time. We find solutions to difficult financial problems every day.

How Do I Keep My Car During Tennessee Bankruptcy?

When the bankruptcy court approves your Chapter 13 bankruptcy plan, your car payments are frequently lowered by adjusting the repayment term of the debt, the interest rate, and/or the repayment amount per month. The revised monthly payments fulfill your “monthly” payments obligations for your secured debts (like your car), so you do not need to fear that your car will be repossessed while you are in Chapter 13 bankruptcy, as long as you make your Chapter 13 bankruptcy payments on time. When the Chapter 13 bankruptcy plan is completed (after 3-5 years), the bankruptcy petitioner has usually paid off the car secured balance and there is nothing owed to common unsecured creditors. (Please note however there may be non-dischargeable debts that may still be owed. So you must explore this issue with your lawyer).

Why Chapter 13 Bankruptcy Allows Petitioners to Keep Important Assets:

When a bankruptcy petitioner chooses to file Chapter 13 bankruptcy, the automatic stay stops all collection activity, including any action your auto lender may be taking to repossess your vehicle. A Chapter 13 bankruptcy allows petitioners to pay on the car throughout their approved payment plan (either three years or five years). During that time, the bankruptcy petitioner keeps their vehicle and pays on the car debt, but not necessarily to make their current car payment. In fact the Chapter 13 car payment is normally lower than their contractual car payment. At the end of the agreed-on payment plan, the petitioner’s remaining unsecured debts (i.e., credit card bills, medical bills, etc.) are discharged, and the secured loans (auto loan, etc.) are current or more frequently paid and satisfied.

If you’d like to file bankruptcy, but you’re afraid of losing your car or other assets, discuss your options with an experienced bankruptcy attorney . Don’t hesitate to call Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Bankruptcy & Debt: How to Pay Down Unsecured Debt

Fri, 18 Sep 2020 09:07:00 GMT

Many Americans struggle with debt, overwhelming bills, and a never-ending struggle to pay off their debt . If you are trying to get debt-free, consider these tips.

Tools and Tips for Paying Off Debt :

If getting to know your debts during step one leaves you stumped because you don’t have enough money each month to cover your bills, you may benefit from another option. When consumers are so buried in debt that they cannot afford to make their payments and have no hope of paying the debt off, bankruptcy offers legal protection and debt discharge.

If you cannot get out of debt and need to file bankruptcy, call Ken Rannick at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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What Happens to Valuable Pets During Bankruptcy?

Wed, 16 Sep 2020 08:27:00 GMT

Many people think of their pets like family, but according to the law, pets are actually assets, and bankruptcy courts may also see them as a leisure expense since pet care can be pricey.

Are Pets Immune from Bankruptcy?

Since the law recognizes pets as legal assets, and the court may see pet care as an expense that pulls funds away from the amount available to pay creditors, pets are not immune from bankruptcy. So it’s only natural to worry about how your bankruptcy will affect your pets.

Pets and Bankruptcy: It’s Complicated

How pets are handled during a bankruptcy can be a complicated area of law, so it’s best to reach out to discuss your specific situation with an experienced bankruptcy attorney if you have questions. However, generally speaking, we can run through the basics.

Pets and Your Chapter 7 Bankruptcy

When you file Chapter 7 bankruptcy, most of your unsecured debts are discharged (including credit card debt and medical debt). In exchange for the bankruptcy discharge, the bankruptcy trustee sells the petitioner’s nonexempt property and distributes the proceeds to creditors. As legal assets, pets (defined as “non-farm animals) must be listed on line 13 of the schedule.

Is My Chapter 7 Bankruptcy Trustee Going to Sell My Dog or Cat?

You are required to list your non-farm animal pets on line 13 of the schedule, but that doesn’t mean that the bankruptcy trustee will sell your dog or your cat (or your hamster, guinea pig, etc.). For the bankruptcy trustee to be interested in selling any asset, they must hold value to someone other than the petitioner. The bankruptcy court is not interested in taking things from bankruptcy petitioners just to take them. They only want to treat the creditors as fairly as possible by selling valuable assets that help provide as much payment as possible before discharging the remainder of what creditors are owed. In most cases, pets have no value. On the schedule, petitioners also list the market value of each asset. Your dog might be priceless to you, but you can likely list the value as $0 since no one else wants to pay just to get their hands on your dog.

What If My Pets Do Have Market Value?

Now, if your pets do have a market value, the situation changes. For instance, if your pet is an exotic bird or a rare reptile with a definite value or if you have pets that you breed and sell and profit off regularly, etc., the court may view the animal as less of a pet and more of an income-generating asset. You still have options, though. Consult with an experienced bankruptcy attorney to ask about how you can keep your pets during Chapter 7 bankruptcy.

Pets and Your Chapter 13 Bankruptcy:

In Chapter 13 bankruptcy , petitioners do not lose any assets, so they do not need to worry about the bankruptcy trustee taking their pet to sell for funds. However, a Chapter 13 bankruptcy requires petitioners to contribute all disposable income to creditors in exchange for the remaining debt discharged at the end of the agreed-upon Chapter 13 repayment plan (3-5 years). Pet care is an expense, and while most trustees will not have a problem with a small monthly amount contributed to pet care and pet food, a significant expense may raise objections. High pet care costs can be an issue for pet owners caring for animals with special needs or medical problems. For example, if pet care expenses exceed $500/month, the bankruptcy trustee may flag the expense as unreasonable. If you need help figuring out how to file Chapter 13 bankruptcy with high pet care costs, contact an experienced bankruptcy attorney.

If you need to file bankruptcy and are nervous about losing your pet, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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What Happens to Your Jointly Owned Assets During Tennessee Bankruptcy?

Mon, 14 Sep 2020 08:24:00 GMT

Are you filing bankruptcy , and you aren’t sure what will happen to a property with joint ownership? How does your individual bankruptcy affect your joint properties?

Factors That Determine How Joint Property is Handled in Bankruptcy:

When You File Bankruptcy Property Becomes Property of the Bankruptcy Estate

When a bankruptcy petition is filed , almost all the assets and property owned by the petitioner become the property of the bankruptcy estate. When filing Chapter 7 bankruptcy, the trustee handling the bankruptcy case can sell the petitioner’s nonexempt property to collect funds to distribute to creditors. In Chapter 13 bankruptcy, the hypothetical value that would have been paid under a Chapter 7 is one important base line of how much money in plan payments is to be paid to unsecured creditors through the agreed-upon Chapter 13 repayment plan.

Protecting Property with Bankruptcy Exemptions:

Bankruptcy petitioners can protect specific property in Chapter 7 bankruptcy, and reduce the amount required to pay back to unsecured creditors in Chapter 13 bankruptcy through bankruptcy exemptions. Exempt assets are protected during bankruptcy. If a property or asset is determined as an “exempt” asset, the petitioner can keep it. So, if a jointly-held property has no equity or is exempt, it is not affected by bankruptcy.

How Is Joint Property Handled in an Individual Bankruptcy?

If you are filing bankruptcy, you are an owner in jointly held property, and that property is not fully exempt and has equity, speak to an experienced bankruptcy attorney. How the joint property will be handled in bankruptcy will depend on where you live, and the joint owner’s identity. Tennessee law requires bankruptcy petitioners to use state exemptions, except in certain circumstances. One of the most crucial bankruptcy exemptions is the homestead exemption.

What is the Homestead Exemption?

The homestead exemption allows you to keep your house in most bankruptcy cases. According to Tennessee law, the following amounts are exempt:

The amounts above reference the home’s equity, which is the difference between what a homeowner owes on the home and the value of the home. If the amount of equity falls below the maximums listed above, plus the costs of sale including a cost of realtor, and the Trustees fees, and there remains no material dividend for unsecured creditors the petitioner can keep the home after bankruptcy. If the remaining equity is worth materially more than the allowable exemption, the trustee may choose to sell the property in Chapter 7 bankruptcy. If the property is sold during Chapter 7 bankruptcy, the petitioner is entitled to a payment in the exemption amount. If your home is not exempt, but you wish to keep it, discuss your options with a bankruptcy attorney. You may have the choice to keep your home by catching up on missed mortgage payments through a Chapter 13 bankruptcy. If only one spouse holds all the debts, that spouse files individual bankruptcy, and the home is held as a tenancy by the entirety, there is no limit on the exemption amount.

Special Rules for Tenancy by the Entirety

In Tennessee, married couples can hold property as a single marital entity in tenancy by the entirety, so if only one spouse files bankruptcy (individually), a tenancy by the entirety may be treated as exempt in bankruptcy. However, if a married couple with joint ownership of their home files joint bankruptcy, property owned in tenancy by the entirety will generally not be exempt.

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Is it Better to Vacate a Judgement, Settle the Judgement, or File Bankruptcy?

Thu, 10 Sep 2020 08:21:00 GMT

Do you have a judgment out against you? If so, you should know that there are only three ways to get rid of a judgment.

3 Ways to Get Rid of a Judgment:

Which Method of Getting Rid of a Judgment is Best?

The trick is figuring out which method of getting rid of the judgment is best in your situation. When you are considering the options, consider them in the order listed above. Can you vacate the judgment? If not, then move to the next. Can you satisfy the judgment? If not, then move to the next, can you discharge the judgment through bankruptcy?

Can You Vacate the Judgment?

If you contest the lawsuit filed against you, and the court enters a judgment against you, vacating the judgment is unlikely. However, if you did not respond to the lawsuit filed against you and the court entered a default judgment against you, you may be able to have the judgment set aside (or vacated). Talk to an attorney to determine if filing a motion asking the judge to vacate the judgment is a good idea. When making this request, you will need to explain why you failed to respond to the original lawsuit. If you were not properly notified of the lawsuit (or “served”), you have a time limitation from when you knew or should have known about the the judgment date to make the motion to vacate, If the judgment is vacated, you can contest the case.

Can You Satisfy the Judgment?

Satisfying the judgment means settling the judgment. When a judgment is settled, the judgment creditor should file a “Satisfaction of Judgment.” In many instances, judgment creditors are willing to settle for less than the full amount. The challenge is that you need money to make a settlement offer.

Can You Discharge the Judgment in a Bankruptcy Discharge?

If you cannot vacate the judgment and you cannot satisfy the judgment, you can probably discharge the judgment in bankruptcy . (Judgments based on fraud or willful and malicious injury are non-dischargeable).

If you have a judgment against you and need to file bankruptcy, please don’t hesitate to contact our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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New Ruling U.S. Supreme Court Harris v. Viegelahn, Could Benefit Filers Converting Chapter 13 to Chapter 7 Bankruptcy

Tue, 08 Sep 2020 08:18:00 GMT

The recent Supreme Court ruling in Harris v. Viegalahn had an immediate impact on pending Chapter 13 cases and future Chapter 13 bankruptcy cases.

Bankruptcy Trustees Throughout the Nation Revise Internal Procedures

After the Supreme Court issued the Harris v. Viegalahn ruling, trustees across the nation rushed to revise internal procedures to comply with the ruling about what a Chapter 13 trustee should do with the funds on hand when a bankruptcy case is converted from Chapter 13 to Chapter 7. Under the new ruling, the debtor is entitled to the return of any post-petition wages collected, but not yet distributed by the trustee.

Previous Handling of Post Petition Wages Collected When Chapter 13 Cases Converted to Chapter 7

Previously, it was assumed that part of a trustee’s duty when a Chapter 13 bankruptcy was converting to a Chapter 7 bankruptcy was to wrap things up by distributing all accessible funds to creditors. However, under the new ruling, the Chapter 13 trustee’s authority to service the estate terminates the moment the Chapter 13 converts to Chapter 7 bankruptcy. Bankruptcy code defines “making payments to creditors” as one of the core services handled by trustees, so the new ruling applies.

Other Findings of the Supreme Court in Harris v. Viegalahn:

Where Should the Balance on Hand Be Sent When a Chapter 13 Bankruptcy Case Converts to Chapter 7?

Wages on Hand: Return to the debtor (unless there is a showing of bad faith)

Liquidated Assets on Hand of Pre-Petition Asset: Turn over to Chapter 7 trustee

Liquidated Assets on Hand Post-Petition Asset: Return to the debtor (unless there is a showing of bad faith)

Attorney Fees Due per Confirmation Order: Funds returned to the debtor

Adequate Protection Payments Due Under the Chapter 13 Plan: Return to the debtor

Supreme Court rulings such as this one in Harris v. Viegalahn often result in ripples of decisions in the months and years to come, so we can expect additional questions, concerns, and issues to evolve.

If you have questions about converting a Chapter 13 bankruptcy to a Chapter 7 bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Tennessee & Georgia Bankruptcy: Will the Bankruptcy Court Consider Your Social Media Account an Asset?

Fri, 04 Sep 2020 08:15:00 GMT

You may consider your social media accounts a form of recreation. Your Instagram feed or Facebook page is just a tool for entertainment and communicating with your friends and loved ones, right? However, if you are a business owner or Influencer, and you use social media accounts to advertise or promote your products, services, or brand, they may be considered assets during bankruptcy .

Are Social Media Accounts Considered Assets During Bankruptcy?

In May 2015, a Texas bankruptcy court ruled that social media accounts used to promote a business are considered part of a company’s bankruptcy estate. They also ruled that the business owner may be ordered to surrender their social media account passwords.

Factors to Consider When Determining “Value” of Social Media During Bankruptcy:

Are social media accounts considered an asset during bankruptcy or not? Can the trustee “seize” your social media account when you file bankruptcy? Theoretically, yes, the bankruptcy trustee can seize your social media accounts since there is no rule explicitly preventing a trustee from doing so. However, the bankruptcy trustee isn’t interested in anything unless it holds “value” that could generate funds to distribute to creditors. When considering whether your social media accounts may be considered an asset during bankruptcy, think about these factors.

Do your social media accounts hold value?

Social media accounts have “low barriers to entry,” which means anyone can register a Twitter, Instagram, Facebook, etc. account for free, and it isn’t hard. According to business valuators, this low barrier to entry generally decreases the potential value of the “asset.” Another concept used by professionals to determine the value of assets is “personal goodwill,” which refers to an item (like an Instagram account) having value because of the person who owns the account and posts to the account. If the account were to change ownership, the value would significantly decrease. Many social media account without the original owner would hold minimal value.

Is your social media account used to promote your business?

If your social media account is used to promote your business, it could be seen as a “tool of the trade” and therefore qualify for possible exemption during a personal bankruptcy. There is precedent defining social media accounts used to promote a business as an asset of the company that can be sold in a bankruptcy. If a social media account is a source of income or a source of business, it may have value in the bankruptcy court’s eyes.

Are Your Social Media Accounts Personal or Business?

Most social media accounts are assets, but they are assets the bankruptcy trustee would not be interested in seizing because they have zero value. However, if a social media account is used to promote a business, and the business is sold, the accounts may go with the business. However, personal accounts used for personal use are unlikely to hold value in the bankruptcy court’s eyes. When determining whether your social media accounts are personal or business assets, the court may consider if the accounts: refer to the business, contain links to the business website, advertise the business, are designated as “business” pages or accounts on the social platform, include descriptions or bios about the business. If the court determines that your social media accounts are business assets, they will most likely be treated similarly to customer email lists.

If you are worried about filing bankruptcy because you don’t want to lose control of your social media accounts, we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C.

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What Are the Key Deadlines During Your Chapter 7 Bankruptcy Case?

Wed, 02 Sep 2020 09:18:00 GMT

Are you considering filing Chapter 7 bankruptcy? Are you in the middle of your bankruptcy case, and you aren’t sure what to expect? Do you want to know more about the process before you decide bankruptcy is an option you’d like to consider more seriously? If so, you may want to start with a few critical deadlines that bankruptcy petitioners should know before they file.

Critical Deadlines During Your Chapter 7 Bankruptcy Case:

Before Filing: Within 180 days before filing, all Chapter 7 bankruptcy petitioners must complete a credit counseling course from an approved provider.

Day 1: File Bankruptcy Petitioner

Day 1-14: File certificate of completion for credit counseling class along with lists, schedules, statements, etc.

Day 13-33: Deadline to provide the bankruptcy trustee with tax returns (7 days before the first date set for the Meeting of the Creditors).

Day 20-30: Deadline to file statement of intention if not included with the original bankruptcy petition filing (30 days after filing or on or before the first date set for Meeting of Creditors, whichever is first).

Day 20-40: Meeting of the Creditors (sometimes called the Section 341 Meeting).

Day 50-70: Deadline to perform Statement of Intention (30 days after first date set for Meeting of the Creditors).

Day 80-100: Deadline to complete financial management course (60 days after first date set for Meeting of the Creditors).

Day 80-100: Reaffirmation agreements (up to 60 days after first date set for Meeting of the Creditors.

Day 90-100: Discharge of debt typically granted during this time frame.

Working with an Established Tennessee & Georgia Bankruptcy Attorney:

When working with an established bankruptcy attorney, most bankruptcy petitioners don’t need to worry about most of the deadlines above since their attorney ensures all deadlines are met during the process. As the petitioner, you will need to be completely transparent with your bankruptcy attorney . Your attorney needs all the necessary information for your case since they handle the majority of the process on your behalf.

What Parts of the Chapter 7 Bankruptcy Process Does the Petitioner Have to Handle?

The only parts of the Chapter 7 bankruptcy process that your attorney cannot handle for you are:

Since your bankruptcy attorney manages such a significant part of the bankruptcy process for you, you must be completely transparent and thorough when providing them with your information. It’s equally vital that you be accessible and respond to your attorney’s requests for additional or further information promptly. Inaccurate information or failing to provide additional information upon request could significantly delay your case or even result in a dismissal.

If you have questions about filing for Chapter 7 bankruptcy , please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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What is the Meeting of the Creditors (or 341 Meeting), and When Does it Occur?

Mon, 31 Aug 2020 08:08:00 GMT

Many bankruptcy filers are extraordinarily nervous or even afraid of what will happen at their Meeting of the Creditors (or 341 Meeting), but the fear and uncertainty are almost 100% unwarranted.

What Happens at the Meeting of the Creditors?

Bankruptcy petitioners must attend a Meeting of the Creditors (sometimes referred to as the 341 Meeting).. Petitioners should bring identification and be prepared to answer a series of basic questions referencing their bankruptcy petition. At this meeting, the petitioner meets with the bankruptcy trustee handling their bankruptcy case. Creditors are allowed to attend and are also allowed to ask about financial matters, but very few ever appear. Most importantly, for those who are desperately worried about this aspect of filing bankruptcy, the vast majority of 341 Meetings last less than ten minutes. Now during these days of the pandemic, these meetings are on a conference call.

The Trustee’s Job at the Meeting of Creditors:

At the Meeting of Creditors, the bankruptcy trustee will verify your identity, review your bankruptcy paperwork for accuracy, and ensure creditors listed in the bankruptcy receive as much payment as possible by evaluating assets and property and making sure reported income is accurate. The trustee also looks for any unreported income or property or signs of bankruptcy fraud.

Trustee Responsibilities in Chapter 7 Bankruptcy:

During a Chapter 7 bankruptcy, the bankruptcy trustee has additional responsibilities. The Chapter 7 bankruptcy trustee sells any assets that are not exempt and distributes the funds received from the sale to the bankruptcy petitioner’s creditors.

Trustee Responsibilities in Chapter 13 Bankruptcy:

During a Chapter 13 bankruptcy , the bankruptcy trustee evaluates the proposed Chapter 13 repayment plan to ensure it’s acceptable and feasible. If the Chapter 13 bankruptcy trustee approves the repayment plan, the trustee is also responsible for monthly distributions of the plan payments to the petitioner’s creditors. The Trustee does not hold veto power over your plan proposal. It’s not uncommon for the trustee to object to a plan but the plan is ultimately approved by the Court.

When Does the Meeting of the Creditors Occur?

The Meeting of the Creditors or 341 Meetings is typically scheduled 30-40 days after the bankruptcy petition is filed. Your bankruptcy attorney will attend the meeting with you, and if you are nervous, ask your attorney to run through some of the common questions that may come up during the meeting.

No matter why you need to file bankruptcy , the law office of Kenneth C. Rannick P.C is ready to help you determine the best options in your situation. You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists . We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process to get our clients a fresh financial start.

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Tennessee & Georgia Bankruptcy Exemptions: What Property is Protected from Creditors?

Thu, 27 Aug 2020 08:15:00 GMT

Most bankruptcy petitioners do not lose assets when filing for bankruptcy . Bankruptcy law includes exemptions enabling filers to keep certain types of property.

What Are Bankruptcy Exemptions?

Bankruptcy law recognizes that people filing for bankruptcy need essential possessions and assets to move forward after their bankruptcy is completed. The bankruptcy exemptions in federal Bankruptcy Code and state bankruptcy statutes are in place to protect these essential possessions and assets. A bankruptcy exemption is an item or property that a bankruptcy petitioner gets to keep during and after filing bankruptcy.

Including a List of Assets When You File Bankruptcy:

When you file bankruptcy, you include a list of asses in your petitioner. The bankruptcy petition’s list of assets is a full list of each item you are claiming as exempt, and the list includes each item’s fair market value. Both the bankruptcy trustee and the creditors in your case may review the list of assets claimed as exempt during the bankruptcy and may object, but they must have sufficient grounds for their objection. In most bankruptcy cases, what is exempt and what is not exempt is very clear, so there aren’t usually any related issues.

Notable Bankruptcy Exemptions: Which Property is Typically Exempt?

Common bankruptcy exemptions include a house, a car, and tools of the trade. For a complete understanding of bankruptcy exemptions and which property you own that falls into a bankruptcy exemption category, you should consult an experienced bankruptcy attorney. Sitting down to have your bankruptcy case reviewed by an experienced Georgia and Tennessee bankruptcy attorney is essential. They can work with you, helping you achieve your goals, get out of debt, and keep as much of your property as you can according to bankruptcy law.

If you are worried about filing bankruptcy , we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C.

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Is Your Pension Exempt in Bankruptcy?

Tue, 25 Aug 2020 09:02:00 GMT

Years ago, Congress exempted most retirement accounts from bankruptcies. However, not all retirement funds are protected during bankruptcy. Whether or not your funds are protected will be determined by the exemptions set down by state bankruptcy code.

Can I Lose My Retirement Savings in a Bankruptcy?

Since different exemptions may apply to different accounts depending on the source of the funds, the specific wording of bankruptcy code, etc., it’s essential to discuss how bankruptcy exemptions apply to your case with an experienced bankruptcy attorney. In the meantime, here are a few standard guidelines:

Social Security: Social Security payments are protected during bankruptcy until they are deposited into your checking or savings account. Once they are deposited into your account, cash in bank accounts may not all qualify for an exemption. It is generally good to keep any social security deposits in a separate account, so the funds are not comingled. Keeping funds separate makes it easy to identify the source of any “social security” funds held in a financial account.

Pensions: If private company pensions qualify under the Employment Retirement Security Act of 1974 (ERISA), they are protected during bankruptcy. To qualify for protection, private company pensions must meet specific criteria contained in ERISA and the Internal Revenue Code. For example, government pensions, non-profit organization pensions, church pensions, and some partnership pensions are not ERISA qualified, but they may qualify by meeting Internal Revenue Code requirements and still be exempt during bankruptcy. This area can be complicated.

401(k) Accounts: These investment accounts/retirement accounts are protected during bankruptcy.

Traditional IRAs and Roth IRAs: IRAs are protected, but there may be an exemption maximum. The exemption maximum for IRAs may change, so for the current exemption maximum that you can expect to apply to your traditional or Roth IRA, contact an experienced bankruptcy attorney.

Annuities: Some annuities are protected under the Internal Revenue Code. Protection for annuities depends on how the annuity was funded and the payment conditions in place. For example, an annuity set to start paying when the recipient turns 65 will be protected, but an annuity set to pay out lottery winnings will not be protected.

Don’t avoid bankruptcy because you fear for your retirement. Discuss your options with an experienced bankruptcy attorney . Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Will I Lose My Checking or Savings Account If I File Bankruptcy?

Fri, 21 Aug 2020 08:57:00 GMT

If you are considering filing Tennessee or Georgia bankruptcy , you probably have many questions. Rumors and myths circulate freely, and it can be challenging to determine the facts. We wanted to address one common question that potential filers ask before making their final decision to file: what happens to the checking and savings accounts?

Will I Lose My Checking or Savings Account if I File Bankruptcy?

When you file Chapter 7 bankruptcy , you can usually keep your actual checking account and savings account. Most banks do not typically close this type of account in response to a bankruptcy filing, but some do. Whether or not you get to “keep” the money in the account is a different issue. However, for many credit unions, if you have an unpaid credit card or loan with the credit union servicing your checking or savings accounts, the credit union may be able to seize your accounts when you file bankruptcy, and apply the balance against your loan. Sometimes they will seize your account balances and close your account. Timing is often a crucial element as to when to file your case. Discuss this possibility with your bankruptcy attorney in your initial consultation.

Do I Get to Keep My Checking and Savings Account Balances When I File Bankruptcy?

You can keep a bank account balance or even cash when you file Chapter 7 bankruptcy as long as it qualifies as an exempt asset under bankruptcy exemption laws, and if the balance in the account is not security for the loan at that institution. Bankruptcy exemptions are laws created to protect property in a bankruptcy. The bankruptcy court cannot sell any exempt property to pay creditors. If the account balance on your checking or savings account falls under the state exemption, it qualifies as an exempt asset. Discuss the state bankruptcy exemptions with your bankruptcy attorney to minimize the consequences of filing. For instance, under Tennessee state bankruptcy law, the wildcard exemption allows bankruptcy filers to exempt up to $10,000 of any personal property, including bank balances.

Bankruptcy Exemption Laws Mean You Don’t Have to Give Up Everything:

Bankruptcy filers do not have to give up everything they own when they file bankruptcy. In most cases, bankruptcy exemptions cover, little, if any of a petitioner’s account balance, but discuss your situation in detail with an experienced bankruptcy attorney. There are often exemptions for portions of the balance if they came from exempt sources like recent wages/earnings, money received from public benefits, etc.

If you have a significant checking or savings account balance and think some of it may be exempt under state bankruptcy exemptions, call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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How Will Bankruptcy Affect My Divorce Settlement?

Wed, 19 Aug 2020 08:25:00 GMT

Did you know that financial stress is one of the leading causes of divorce? Ironically, divorce typically increases financial strain due to splitting income and assets between two separate households. Considering these factors, it’s not surprising that divorce often leads to bankruptcy – or maybe it’s bankruptcy that often leads to divorce. It’s difficult to determine the precursor, but regardless, the two often occur right around the same time. If you’re dealing with both divorce and bankruptcy simultaneously, you’ll most likely agree that it’s an emotional and stressful time, and it can be hard to stay practical when making decisions. Make sure you educate yourself to avoid faulty decision-making that could come back to haunt you both later.

Determining How Bankruptcy Filing Would Affect Your Divorce:

The best place to start is with a free consultation with a local bankruptcy attorney . Regardless of whether or not you end up filing bankruptcy, you will have a clear plan and a good understanding of how the bankruptcy would play out, so you can make educated decisions while you navigate the divorce process. Knowing how bankruptcy could affect your post-divorce finances can be very useful since many financial questions arise during a divorce regarding the division of debts and assets, spousal maintenance, child support, etc. Sitting down and going over the current and projected finances and financial obligations with a bankruptcy attorney before moving forward with divorce proceedings can help you better understand how your financial situation could look post-divorce.

Can Filing Bankruptcy Affect My Divorce Settlement?

While obligations put in place by divorce court order are not dischargeable, some divorce-related debts can be discharged in bankruptcy. You cannot discharge alimony debt or child support through bankruptcy. However, under certain circumstances, you may be able to discharge other personal debts like credit card debts or debts you owe your former spouse for other reasons; for instance, you may owe a balance to your ex for buying out a share in the family home. Discuss this in detail with your bankruptcy attorney to determine eligible debts.

When Your Ex Becomes a Creditor in Your Bankruptcy Case:

Another way bankruptcy may affect your divorce settlement is that your ex may become a “creditor” in the bankruptcy case. When a divorce settlement leaves one spouse “owing” the other, the spouse owed money may eventually become a creditor in the other party’s bankruptcy case. The debt owed is covered by the bankruptcy case, and the ex’s rights to “collect” on the debt are protected.

If you need to file bankruptcy and are postponing because you are also considering divorce, please don’t hesitate. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Is It Always Best for a Married Couple to File a Joint Bankruptcy Petition?

Mon, 17 Aug 2020 08:23:00 GMT

Are you married and filing bankruptcy? If so, you’ll need to decide if you are filing jointly or separately. It’s an important decision. It could affect how much of your debt is discharged and how much of your property you keep after a Chapter 7 bankruptcy .

When Should Married Couples File Joint Bankruptcy?

When a married couple files bankruptcy jointly, all property of both spouses and all debt of both spouses are part of the bankruptcy estate. If both individuals face debt trouble, filing jointly means all the information in one set of documents, one filing fee instead of two, and one legal fee instead of two legal fees. Married couples are not required to file a joint bankruptcy petitioner, but in most cases, it is the better option.

When Should Married Couples Not File Joint Bankruptcy?

While it is usually advisable for a married couple to file a joint Tennessee or Georgia bankruptcy petition, it could be a good idea to file independently if the non-filing spouse has little or no debt. For example, if John and Samantha are married and live in Tennessee, and John has massive credit card debt as a result of a past health issue, but Samantha has only one small line of credit that she uses rarely and has always paid off on time, it may not make sense for them to file a joint bankruptcy. In this type of scenario, it is often advantageous if only the spouse with a significant amount of debt files bankruptcy.

Additional Considerations When Thinking About Filing Jointly or Separately:

When considering whether or not you should file a joint bankruptcy petition or not, you should also consider other essential factors. Think about your savings, plans for retirement, any plans or savings you have for your children’s future education, or other future goals. If only one spouse files bankruptcy, and the other spouse has debt that remains to be paid, savings contributions may be left in danger. While many assume the best idea is to keep one spouse out of it entirely, it often ends up with the non-filing spouse filing at a later date, resulting in additional fees and court costs.

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Exempting Your Mobile Home During Bankruptcy

Thu, 13 Aug 2020 08:21:00 GMT

Many bankruptcy petitioners worry about their homes when filing bankruptcy. Whether or not you can keep your mobile home when you file bankruptcy depends on what bankruptcy exemptions are available to you. Is your mobile home considered real estate or personal property? Do you own the land where it is located?

Under Federal Bankruptcy Exemptions a Mobile Home is Protected as a Homestead:

Under federal bankruptcy exemptions, mobile homes are protected as a homestead (up to $150,000) regardless of whether or not you own the land where the mobile home is located, but both Tennessee and Georgia use state exemptions. Some states will allow bankruptcy filers to use the federal bankruptcy exemptions instead of state exemptions, but Tennessee and Georgia do not. If you are a Tennessee or Georgia resident filing bankruptcy, you must use the state exemptions.

Tennessee Bankruptcy Exemptions: Is Your Mobile Home Protected as a Homestead?

In Tennessee, bankruptcy petitioners can exempt up to $5,000 of equity in their home or up to $7,500 for joint owners or up to $25,000 if there is at least one minor child who is a dependent. Tennessee bankruptcy petitioners 62 or older may exempt up to $12,500 of equity in their home, $20,000 if married, or $25,000 if their spouse is also 62 or older.

Georgia Bankruptcy Exemptions: Is Your Mobile Home Protected as a Homestead?

In Georgia, bankruptcy petitioners can exempt $21,500 of value in real estate or personal property (including co-op) used by the petitioner or the petitioner’s dependent as a residence or up to $43,000 if married and only one spouse owns the property.

Knowing How to List Your Mobile Home During Bankruptcy:

So, does this mean you can keep your mobile home when you file bankruptcy ? Whether or not you can keep your mobile home during bankruptcy depends on your available bankruptcy exemptions, whether it is considered personal property or real estate, and whether you own the land where the mobile home is located. A mobile home is considered personal property unless you own the land where it sits, but bankruptcy exemptions may still apply.

Converting a Mobile Home from Personal Property to Real Property:

When a mobile home is purchased, a title is issued, and it is considered personal property (not real property). A mobile home can be “converted” from personal property to real property if it is “affixed” to the land, making it a permanent part of the property. Making this change may allow you to qualify for additional exemptions. The conversion to “real property” means the home and the land are considered a single piece of property by law, and a single homestead (a home plus the land it sits on) has advantages when protecting equity during bankruptcy. The legal “definition” of your property will determine what exemptions apply, and you may benefit from advanced bankruptcy planning, so don’t make assumptions and don’t waste time. Talk to an experienced bankruptcy attorney in your local area.

If you are worried about losing your mobile home during bankruptcy, please don’t hesitate to contact our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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How To Protect Your Credit During the Coronavirus Pandemic

Tue, 11 Aug 2020 08:11:00 GMT

The Covid-19 pandemic is affecting people throughout the world. Many have lost their jobs or experienced significant pay cuts. Some businesses are struggling, and others have shut their doors. It’s no surprise that a lot of people are having a hard time financially. Times of crisis like the one we are currently in leave people from all walks of life thinking about their future.

The Covid-19 Pandemic Has Turned People’s Financial Lives Upside Down

Did you recently lose your job? Is your business struggling to make it out of the downturn? Are you struggling to pay the bills that you had no problem managing just months ago? As you do your best to keep your accounts in good standing and your household finances healthy, don’t forget to give your credit score some thought. You may be delaying large purchases right now – like buying a home, purchasing a vehicle, or going on vacation. But eventually, you will start spending again, and you’ll need to depend on a good credit score. Trust us, as Tennessee and Georgia bankruptcy attorneys we know!

Don’t Let the Covid-19 Pandemic Turn Your Credit Score Upside Down, Too!

You may know that you want to protect your credit score during the Covid-19 pandemic, but you may not know how to make it happen. Consider the following tips to protect your credit score during the pandemic.

How To Protect Your Credit Score During the Pandemic:

If you are worried about protecting your credit score during the Covid-19 pandemic, you’re not alone. Many people, just like you, are struggling to make ends meet during these unprecedented times. If you need to talk about your options and how to get a fresh financial start by filing bankruptcy , trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We can help you determine your best options. We help good people through bad times every day, and we can help you, too.

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What To Do If You Can’t Pay Bills Due to Coronavirus

Fri, 07 Aug 2020 08:05:00 GMT

Has the recent pandemic left you struggling to pay your bills or facing mounting debt and credit card balances? If you are worried that you won’t be able to catch up on your payments and you aren’t sure how you’re going to make ends meet for your family, an experienced bankruptcy attorney may be able to help.

Start By Conserving Funds and Prioritizing Your Debts:

These are uncertain times. Many people just like you are struggling to make ends meet and struggling to pay their bills. Putting a flexible financial plan in place is more critical now than ever. A good Covid-19 financial action plan will assume the best while preparing for the worst. We recommend starting with a basic plan founded on the principle of commonsense.

How to Conserve Funds:

How to Prioritize Debts:

Any strategy to prioritize debt will depend on your specific situation. Generally speaking, a plan to prioritize debt should use income, unemployment payments, and stimulus funds received during the pandemic to cover necessary expenses to provide for your family’s basic needs. It’s almost always best to put any surplus aside as savings. If you end up in a better financial situation, with stable employment reasonably quickly, the saved funds will allow you to catch up on your payments.

Don’t Assume the Worst, but Don’t Assume the Best Either:

In difficult times, many people make the mistake of being overly optimistic about the future. For instance, they may find themselves unemployed for an extended period and eventually turn to bankruptcy for relief. When they look back on the months following their job loss, they often regret being unproductive with their money. The earlier you consider bankruptcy, the more likely you’ll avoid wasting vital resources you have at your disposal on debts that will eventually be discharged. Avoiding wasting funds in this manner can make a significant difference when trying to provide for the crucial needs of a family.

If you have questions about how bankruptcy can help families facing financial struggles during the Covid-19 pandemic, we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Filing Bankruptcy: How to Protect Your Assets

Wed, 05 Aug 2020 08:12:00 GMT

If you are considering filing bankruptcy, you are most likely wondering how you can protect your assets. Protecting assets in bankruptcy requires both expertise and foresight. In Chapter 13 bankruptcy, petitioners are typically allowed to keep all their property, but in Chapter 7 bankruptcy, nonexempt assets are often “liquidated” and sold to pay creditors. So if you do not actively seek to protect your assets when filing Chapter 7 bankruptcy, the bankruptcy trustee will convert them to cash and distribute the money to creditors.

Protecting Your Assets with Bankruptcy Exemptions:

Bankruptcy exemptions are determined by state law. Exemptions determine how much of a bankruptcy petitioner’s property can be protected. In most cases, Georgia and Tennessee bankruptcy petitioners can expect bankruptcy exemptions to protect:

Additional exemptions may apply to your situation. For a complete list of bankruptcy exemptions and how they apply to your situation, discuss your case in detail with an experienced Georgia and Tennessee bankruptcy attorney . In some cases, the Chapter 7 trustee may allow a petitioner to negotiate the nonexempt property’s buy-back. Discuss the buy-back of a nonexempt property option with your bankruptcy attorney.

Asset Protection and Bankruptcy Planning:

Using certain asset conversion strategies may help bankruptcy petitioners protect their assets during bankruptcy by utilizing the full statutory exemptions. Specific amounts of nonexempt liquid assets may be used to purchase a vehicle, contribute to retirement accounts, pay down a mortgage balance, obtain a life insurance policy, pay off nondischargeable debts such as student loans, past-due child support, or tax debt. Other, more advanced bankruptcy planning strategies can also be useful, but only well in advance of a filing: asset protection trusts, equity reduction by financially encumbering an asset or accounts-receivable financing. (The last option being applicable if you are a business owner with the option to borrow against the business’s accounts receivables to encumber the future “value” of the company making it a less attractive asset to the bankruptcy trustee).

If you are worried about protecting your assets during bankruptcy, we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. to help you determine your best options. We help good people through bad times every day, and we can help you, too.

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Deductions from Gross Income for the Chapter 7 Means Test

Mon, 03 Aug 2020 08:08:00 GMT

If you are filing bankruptcy and your income is higher than your state’s median income for a household of your size, you must complete the complete bankruptcy means test form. The means test determines if you are eligible to file Chapter 7 bankruptcy.

Determining Deduction Amounts When Completing the Means Test:

Many expenses have predetermined deduction amounts determined by IRS standards (local and national). But some other actual costs may still be deducted to help petitioners pass the means test and qualify for Chapter 7 bankruptcy.

Which Expenses Can Help Petitioners Pass the Chapter 7 Means Test?

When a petitioner’s income is less than the state’s median income for their household size, they automatically pass the means test without additional calculations based on income and expenses. If a petitioner’s income falls above the state’s median income for their household size, the full means test is necessary to determine eligibility. The following are some of the most critical expenses to include when completing your means test:

Tax Debt/Obligations: The means test allows petitioners to deduct actual tax obligations from their income; which can help debtors with a hefty annual tax liability quality to file Chapter 7 bankruptcy.

Insurance: You can deduct any medical, disability, or term life insurance coverage costs on the Chapter 7 means test.

Secured Debt Payments: If a petitioner’s average monthly mortgage or car loan is higher than the IRS standard housing or car ownership allowance, they can deduct the higher amount on the means test. The means test calculates the “average monthly payment” based on the amount of contractually required payments due in the next 60 months, so for the means test, your average payment may be less than your actual payment depending on when the loan will be paid in full.

Involuntary Employment Expenses: Deductions from the petitioner’s paycheck for costs required by their employer (i.e., union dues, uniform fees, mandatory retirement contributions, etc.) may be deducted on the Chapter 7 means test.

Court Ordered Payments: If the petitioner is making any court-ordered payments, such as spousal support or child support, these amounts can also be deducted on the means test.

Childcare Costs: If the petitioner has regular expenses related to childcare, such as babysitting, daycare, or preschool, etc. they can use them as means test deductions to reduce their disposable income.

Educational Expenses for Employment or Disabled Children: Petitioners can deduct education expenses required for their job or necessary for their disabled child.

Regular Charitable Contributions: If a petitioner has a history of making regular charitable contributions or donations and expects to continue in the same vein, they can deduct the contributions as an expense on their Chapter 7 means test.

Out-of-Pocket Health Care Costs: If the petitioner has health care expenses that are not covered by insurance and exceed the IRS national standard allowance, they can deduct the actual costs on their means test.

Continuing Expenses for the Care of Chronically Ill, Disabled, or Elderly Family/Household Member: If the petitioner cares for a chronically ill, disabled, or elderly family member or household member, they can deduct these financial contributions on their means test.

Necessary Expenses for Health or Welfare: If the petitioner has any other additional expenses essential to maintain their own or their family’s health and welfare, they may deduct them on the means test. Petitioners making this deduction will need to explain any exceptional circumstances relating to why the additional expenses should be an allowable deduction.

No matter why you need to file bankruptcy, the law office of Kenneth C. Rannick P.C is ready to help you determine the best options in your situation. You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists. We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process to get a fresh financial start.

The post Deductions from Gross Income for the Chapter 7 Means Test appeared first on Kenneth C. Rannick, P.C. .

Do I Have to Go to Court If I File Chapter 7 Bankruptcy?

Thu, 30 Jul 2020 08:00:00 GMT

When you think of lawyers and lawsuits and filing bankruptcy, you may immediately envision austere courtrooms, frightening judges, and intense questioning on the stand. This vision of what it is like to file bankruptcy prevents many from filing (or significantly delays them). Potential filers assume the judge will second-guess their bankruptcy petition and call their right to file into question. In the vast majority of bankruptcy cases, these fears are unwarranted.

The Vast Majority of Bankruptcy Petitioners Never Step Foot in a Courtroom:

Most bankruptcy petitioners never step foot in a courtroom. For most petitioners, the only official “meeting” will be the 341 Meeting of the Creditors or Section 341 Meeting. At this proceeding, the petitioner testifies under oath that the information contained in the bankruptcy petition is correct. In most cases, the Meeting of the Creditors does not even occur at the courthouse. It is often in nearby offices with meeting rooms, or at a federal court located in the vicinity. The bankruptcy trustee presides over the Meeting of the Creditors (not a judge), and your bankruptcy attorney is in attendance with you to guide you.

Most Section 341 Meetings are Painless and Fast:

In most cases, the Section 341 Meeting is painless and relatively quick (usually between 30 seconds to 5 minutes). The trustee asks a series of simple questions about the petitioner’s property, debts, and finances. Some petitioners receive very few questions, and others who present more complicated bankruptcy cases may have more questions. For a successful Meeting of the Creditors, be honest with your bankruptcy attorney from the start.

What To Expect During Your Meeting of the Creditors:

When Is a Court Appearance Required During Bankruptcy?

In rare cases, a court appearance may be required, but the likelihood is low. A court appearance may be necessary if a bankruptcy trustee objects to one of the petitioner’s exemptions, if the bankruptcy judge orders the petitioner to appear and show cause, or if the case spurs adversary proceedings.

If you have questions about the bankruptcy process or need to discuss the protections offered by bankruptcy , we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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When I File Bankruptcy Does It Remove a Judgment Lien Against My Property?

Tue, 28 Jul 2020 09:58:00 GMT

Many bankruptcy petitioners are unsure whether or not filing bankruptcy will remove a judgment lien against their property. In some situations, you can get rid of judgment liens or avoid judgment liens with a Chapter 7 bankruptcy, so it’s important to discuss your specific situation with an experienced bankruptcy attorney .

What Is a Judgment Lien?

A judgment lien is a lien attached to personal property after a creditor obtains a money judgment against the borrower from the court. To obtain a judgment lien, a creditor must sue a debtor, get a court-ordered judgment against them, and then file a lien against their personal property to satisfy the judgment. The judgment lien allows a creditor to take personal property and sell it to satisfy the judgment. In certain situations, borrowers struggling with overwhelming debt can avoid judgment liens in a Chapter 7 bankruptcy.

Consider This Example of a Judgment Lien:

If Melissa owes $5,000 to a financial institution and stops paying the loan, the bank will likely sue Melissa for the balance. The court may enter a judgment against Melissa for the $5,000. The financial institution may then file a judgment lien against Melissa’s personal property. Personal property can include anything from jewelry to furniture to appliances to a rare coin collection. The financial institution can send the sheriff to Melissa’s house to take the personal property and sell it to satisfy the original debt.

Chapter 7 Bankruptcy: Avoiding Judgment Liens

Chapter 7 bankruptcy petitioners may get rid of judgment liens on their property through the lien avoidance process. You may avoid a judgment lien if you meet three specific conditions:

There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Do you need help to save your home from foreclosure? Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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If Your Bankruptcy Case is Dismissed, Can You Refile?

Fri, 24 Jul 2020 09:55:00 GMT

The bankruptcy court may dismiss your bankruptcy case for several different reasons. The Bankruptcy Code outlines various responsibilities for debtors, and, unfortunately, if a bankruptcy petitioner does not comply, their entire case can be dismissed.

Why Do Some Bankruptcy Cases Get Dismissed?

Failing to comply with any of the responsibilities assigned to bankruptcy petitioners by the Bankruptcy Code jeopardizes the case. The risk of dismissal is one of the reasons it is essential that petitioners work with an experienced bankruptcy attorney . If a bankruptcy case is dismissed (without a discharge of debt), the automatic stay disappears, and creditors are free to seek payment again. Working with an experienced attorney and adhering to the bankruptcy rules should be enough to keep your case from being dismissed by the court. But what happens if your case does get dismissed? Can you refile?

If Your Bankruptcy Case Is Dismissed, Can You Refile?

If the bankruptcy court dismisses your bankruptcy case, your chances of refiling (and when you can refile) depend on the reason for the dismissal. Why was your bankruptcy case dismissed? If the bankruptcy court dismissed your case because they suspected fraud or otherwise decided you were taking advantage of the system, you might be required to wait 180 days before refiling bankruptcy. According to Section 109(g) of the Bankruptcy Code, debtors whose case was dismissed must wait 180 days to refile if the court dismissed their case due to alleged willful failure to fulfill court orders, appear before the court, or if the debtor requested and obtained a voluntary dismissal of the bankruptcy case after filing a request for relief from the Automatic Stay order.

If you are unsure whether or not your bankruptcy case was dismissed due to “willful failure” to fulfill court orders, or if you aren’t sure whether or not you need to wait to refile bankruptcy, Call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Is the Debt Discharged by Bankruptcy Taxable?

Wed, 22 Jul 2020 08:45:00 GMT

The IRS often considers canceled debt or discharged debt as income – leaving taxpayers responsible for reporting that income on their tax return. But this isn’t always the case. This rule does not apply to all discharged debt.

What is a Forgiven or Cancelled Debt?

When a creditor agrees to or is prohibited from pursuing a consumer for money owed, the debt is considered forgiven or canceled. The consumer no longer owes a forgiven or canceled debt. Forgiven/canceled debts are usually not considered income when the debts are forgiven/canceled due to bankruptcy (although it’s important to note the word usually in this sentence). The rules vary when debts are forgiven outside of bankruptcy, but sometimes, you don’t have to report those as income either.

How To Handle Debts Discharged in Bankruptcy During Tax Filing:

In most cases, debtors who file bankruptcy are usually not required to include the discharged debt as taxable income. If you are a bankruptcy filer and you receive a Form 1099-C from a lender showing the amount of debt that was canceled or discharged during bankruptcy, discuss the situation with your tax professional. They may advise you to attach Form 982, “Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment),” to your income taxes to show the IRS that the discharged amount is excluded from income by Code Sec. 108.

If a Debt Was Discharged Before You Filed Bankruptcy:

In some bankruptcy cases, petitioners attempted to alleviate their financial crisis by working with their creditors directly. This may have resulted in partial debt settlement or one or two debts being settled before filing bankruptcy. If you have a canceled or forgiven debt before filing bankruptcy, you must include the amount of the debt stated on the Form 1099-C you receive on your tax return if the lender filed it before you file for bankruptcy. Timing is everything. When this happens – it’s no longer debt; it’s income or money you borrowed that you don’t have to pay back. Bankruptcy can only cancel debts that exist at the moment you file your petition.

Do You Have to Report Debts Discharged in Bankruptcy as Income?

In some cases, bankruptcy petitioners do have to report debt discharged in bankruptcy as income. Make sure to consult a tax professional you trust about the exact details of your bankruptcy case and your situation before assuming you need to claim your discharged debt as income.

If you need to file bankruptcy , and you are postponing getting in touch because you are ashamed of your financial situation, please don’t hesitate any longer. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Is There a Limit to How Much Debt Can Be Discharged in Bankruptcy?

Mon, 20 Jul 2020 09:42:00 GMT

Are you considering filing bankruptcy? Are you unsure if it will be beneficial in your situation? Have you ever caught yourself dismissing the possibility because you feel you may have too much debt?

Is There a Limit to How Much Debt Can Be Discharged in Bankruptcy?

When filing Chapter 7 bankruptcy, there is no maximum limit to the amount of debt eligible for discharge. For Chapter 13 bankruptcy, there are limitations.

What Are the Chapter 13 Debt Limits?

In Chapter 13 bankruptcy cases , there is a maximum dollar amount of debt that is eligible (determined by bankruptcy law). The amounts are adjusted every three years. As of April 2019, the maximum secured debts to qualify for Chapter 13 bankruptcy is $1,257,850, and the maximum unsecured debts to be eligible for Chapter 13 bankruptcy is $419,275. If your debts in either category exceed these limits, Chapter 13 bankruptcy may not be available to you. (Secured debts refer to loans against property such as a home or auto loan, while unsecured debts refer to loans that are not secured by property such as medical bills, credit card balances, etc.)

What To Do When You Are At or Near the Debt Limits for Chapter 13 Bankruptcy:

If you are hoping to file Chapter 13 bankruptcy and you are at or near the maximum debt limits set by bankruptcy code, speak with an experienced attorney about determining what rules exist in the applicable Court for determining whether debts are secured or unsecured. This area of bankruptcy code is evolving. While limits are set by federal law, each Court jurisdiction may have different rules in place to calculate the numbers as well as different variables that all go into the equation determining the final debt calculations. Determining eligibility is not always cut and dry, particularly if debt totals are close to the maximums set by federal law.

Discuss Your Case With an Experienced Bankruptcy Attorney:

If you are hoping to file Chapter 13 bankruptcy and are discouraged by the maximum debt limits set by federal law, don’t give up on the idea until you sit down with an experienced attorney. Bankruptcy code can be complicated – you can’t count on getting an accurate final answer on whether or not you qualify unless you discuss your case in detail with an attorney experienced in your local area and Chapter 13 bankruptcy specifically.

Do you have questions about bankruptcy law and how to determine your eligibility to file bankruptcy? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

The post Is There a Limit to How Much Debt Can Be Discharged in Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

What Happens to Debt Not Listed in Your Bankruptcy Schedule of Debts?

Thu, 16 Jul 2020 09:37:00 GMT

When filing bankruptcy , there’s a lot of paperwork. Among the paperwork, bankruptcy petitioners are required to list all their income and assets. The paperwork also includes a complete list of all debt, including a full list of creditors. This information is used to notify creditors of the bankruptcy. It’s also a stressful time, and even the most careful and well-intentioned bankruptcy filer may overlook some info. But what happens when a bankruptcy filer makes an honest mistake and forgets to list a creditor in their bankruptcy?

Forgetting to List Creditors in Your Bankruptcy:

You may wonder why it’s such a big deal to forget to list a creditor in your bankruptcy petition. It’s essential for several reasons, but one crucial aspect of this issue is that creditors have important legal rights in your bankruptcy case. So forgetting to include them in the list of creditors could deny them their rights.

How Are Creditors Notified of Bankruptcy Filings?

Bankruptcy petitioners must include every creditor (large or small, mean or nice, old or new, friend or foe or family) in their list of creditors, alongside contact information. The list mainly serves as the bankruptcy court’s creditor mailing list. The list includes all creditors, even nondischargeable debt, such as student loans. The bankruptcy court uses the list of creditors to sent each one notice that one of their debtors filed bankruptcy. Creditors need notice of the bankruptcy because they can choose to be involved during the bankruptcy process.

What Can Creditors Get Involved in During the Bankruptcy Process?

Depending on what type of bankruptcy is filed, creditors may need to be involved in the reaffirmation of any debts, paying out liquidated assets, approving payment plans, etc. Creditors who wish to receive their “portion” of the bankruptcy estate must file a proof of claim with the court. If they don’t receive notice, they have no way of filing a proof of claim and are not included in payouts from the bankruptcy estate.

The Creditor Mailing Is Also for the Protection of the Bankruptcy Filer:

Creditors benefit from their inclusion on the bankruptcy’s schedule of creditors, but the filer also benefits. When you file bankruptcy, the automatic stay immediately goes into effect, protecting collection efforts. The automatic stay essentially stops all collection calls, letters, etc. A creditor cannot comply with the automatic stay if they are not aware it exists. Additionally, leaving one of your creditors off your list during bankruptcy can also affect your bankruptcy case’s overall outcome. If the court deems the omission purposeful, you could face penalties.

What Happens to Debt That Isn’t Listed in Your Bankruptcy?

If you leave a creditor off your bankruptcy, that debt is not included in the bankruptcy and is not discharged. So that creditor can try to collect from you after your bankruptcy discharge.

If you are considering filing personal bankruptcy and aren’t sure where to start, please don’t hesitate to contact our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post What Happens to Debt Not Listed in Your Bankruptcy Schedule of Debts? appeared first on Kenneth C. Rannick, P.C. .

Can You Discharge Medical Debt in a Georgia Bankruptcy?

Tue, 14 Jul 2020 09:33:00 GMT

Are you facing significant medical debt? Do you watch more medical bills arrive each week with no idea how you can pay them? If so, you should get in touch with an experienced Georgia bankruptcy attorney.

Discharging Medical Debt in Georgia Bankruptcy:

When you file for a Georgia bankruptcy , medical bills are included in the bankruptcy. Medical debt is one of the most common reasons that people seek bankruptcy protection.

Priority and Nonpriority Debts in Bankruptcy:

When you file Georgia bankruptcy, your debts are separated into two categories: priority and nonpriority. Child support, spousal support, and some tax debts are designated priority debts. Priority debts are not discharged and must be paid in full. They are not eliminated by bankruptcy. Any money available from the bankruptcy estate will be used to pay towards any priority debts first.

Are Medical Bills a Priority Debt During Bankruptcy?

Medical bills are not considered priority debts. Medical bills are typically unsecured debts and are treated similarly to credit cards during bankruptcy. Medical bills do not receive priority treatment during bankruptcy. As a nonpriority debt, medical bills are discharged by bankruptcy.

How Does Bankruptcy Eliminate Your Medical Bills?

Bankruptcy filers can eliminate their medical bills through Chapter 7 bankruptcy or Chapter 13 bankruptcy. The type of bankruptcy you file depends on your situation and specific eligibility requirements.

Eliminating Medical Bills During Chapter 7 Bankruptcy:

Filers who qualify for Chapter 7 bankruptcy receive a discharge of debt that wipes out their medical bills and most other unsecured debts. The bankruptcy court does not limit the amount of medical debt that can be discharged in a Chapter 7 bankruptcy. Medical bills that were paid using credit cards are also discharged along with all other credit card debt and other qualifying debt. To file for Chapter 7 bankruptcy, the filer must pass the Chapter 7 means test.

Eliminating Medical Bills During Chapter 13 Bankruptcy:

In Chapter 13 bankruptcy, medical bills and other general unsecured debts are lumped together in one repayment plan. The amount paid to the bankruptcy court each month for the repayment plan depends on income, expenses, and nonexempt assets with the money going to pay creditors. During the Chapter 13 repayment plan, creditors receive a pro-rata portion of the total amount. To be eligible for Chapter 13 bankruptcy, you must make enough to pay the bills you are required to pay in full through the plan, such as all priority creditors. Chapter 13 also includes debt limits that apply to medical bills and other debts.

If you have questions about filing for Chapter 7 or Chapter 13 bankruptcy to eliminate medical debt, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Can You Discharge Medical Debt in a Georgia Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

What Happens to Your Tax Refund After You File Bankruptcy?

Fri, 10 Jul 2020 09:27:00 GMT

Do you know what happens to your tax refund when you file bankruptcy? According to the IRS data in 2004, 77% of tax returns resulted in taxpayers receiving a refund. In 2018, the average federal tax refund was $1,865. But what happens to the money when you’re filing Chapter 7 bankruptcy?

Can Bankruptcy Filers Keep Their Tax Refunds During Chapter 7 Bankruptcy?

If you’re wondering whether or not bankruptcy filers can keep their tax refund during bankruptcy, the answer is…maybe. Tax refunds are technically the property of the estate. Since your bankruptcy estate is the pool of your assets on the date you filed bankruptcy, any tax refund would be included.

Can a Tax Refund Be Protected During Bankruptcy?

Unless an asset is protected by an exemption, any asset that is part of the bankruptcy estate can be distributed to creditors to repay debts. Tax refunds can be tricky because they are often considered part of the bankruptcy estate even if they are not received until months after filing bankruptcy. If a bankruptcy petitioner earned all or part of their tax refund for work performed before filing bankruptcy, that portion of their tax refund is part of the bankruptcy estate and belongs to the bankruptcy trustee (unless an exemption protects it).

Filing Bankruptcy at the Beginning of the Year:

If you file bankruptcy in January, and you file your taxes for the previous year in March of that same year, 100% of any tax refund issued belongs to the bankruptcy estate because 100% of the work performed that resulted in the tax refund occurred before filing bankruptcy. Unless there is a way to protect the refund with an exemption legally, the bankruptcy trustee is entitled to the full tax refund.

Filing Bankruptcy Mid-way Through the Year:

If you file bankruptcy halfway through the year, and file taxes for that year the following spring, any tax refund issued is divided. If the bankruptcy filing occurred 50% through the year, the bankruptcy court would be entitled to 50% of the tax refund, and the filer would receive the other 50%. If the bankruptcy was filed 70% into the year, the bankruptcy court would be entitled to 70% of the tax refund, and the filer would receive the other 30%. Unless the bankruptcy filer’s attorney can protect the entire return with an exemption, the bankruptcy trustee will claim the percentage the court is entitled to and use it to pay creditors.

If you are worried about losing your tax refund during bankruptcy , we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. to help you determine your best options. We help good people through bad times every day, and we can help you, too.

The post What Happens to Your Tax Refund After You File Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Tennessee Car Repossession: Avoid Getting Your Car Repossessed

Wed, 08 Jul 2020 09:30:00 GMT

In many areas in the US, including Tennessee, owning a car is a necessity. You need a car to get to work, to get your kids to school, and get essential errands done so your family’s life can run smoothly. If you’ve fallen behind on your car payments and your lender is threatening to repossess your car, you may feel pretty desperate to avoid getting your car repossessed.

How Can You Prevent Repossession?

If you’re facing the threat of auto repossession or if your lender already took your car before you could stop it, you don’t have to accept the situation and move on without a vehicle. You can file bankruptcy to stop repossession of a car in Tennessee. If your car was recently repossessed in Tennessee, you might be able to get your car back by filing bankruptcy.

How Does Filing Bankruptcy Help Avoid Tennessee Car Repossession?

Whether your car was repossessed due to falling behind on a title loan or a conventional car loan, bankruptcy can help. In most situations, filing bankruptcy can protect your car from repossession, and may decrease your monthly payment amount. A lower payment may be all you need to get back on track. Bankruptcy will also address any other debt you currently owe and help you get a fresh financial start.

But Isn’t Filing Bankruptcy Stressful?

Some avoid filing bankruptcy because they fear it is too stressful or too difficult. However, the stress associated with overwhelming debt, and the constant worry of a pending vehicle repossession are far more stressful than the bankruptcy process. Depending on the type of bankruptcy you file, you may receive your discharge of debt within a matter of months. Immediately upon filing, all collection activities stop. Most bankruptcy filers agree that filing bankruptcy is far less stressful than attempting to put off creditors who are continually seeking payment for past due debts.

But Isn’t Bankruptcy Difficult?

Some avoid filing bankruptcy because they are under the impression that the bankruptcy process is complicated. However, working with an experienced bankruptcy attorney streamlines the process. With an experienced consumer bankruptcy specialist on your side, most discover that the bankruptcy process is not difficult. While bankruptcy law can be complicated, your bankruptcy attorney is experienced and knowledgeable in handling the details and the paperwork, so you simply have to provide all the information about your debts, your creditors, and your current financial situation. Bankruptcy law was actually created to protect consumers just like you from impossible financial conditions – the laws are literally in place to help you in your current situation.

If you are worried about your car getting repossessed, we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C.

The post Tennessee Car Repossession: Avoid Getting Your Car Repossessed appeared first on Kenneth C. Rannick, P.C. .

Can You Buy a Car After Bankruptcy?

Mon, 06 Jul 2020 09:14:00 GMT

Are you worried about buying a car after bankruptcy? It’s a common fear, but buying a car after bankruptcy is not as difficult as you may think – even if you haven’t yet been able to repair your credit.

Making a Major Car Purchase After Filing Bankruptcy:

Recent bankruptcy filers are often under the misconception that making a significant car purchase after bankruptcy is difficult or impossible. While bankruptcy does show up on your credit report for 7-10 years, the “weight” of the penalty decreases over time, so there’s no need to wait to purchase a vehicle until it falls off your credit report. Buying a car after bankruptcy can offset the damage of the penalty – it’s one of the actions recent filers can take to repair their credit.

How Soon After Bankruptcy Can I Buy a Car?

Buying a car after bankruptcy is not impossible; in fact, it’s a fairly common occurrence. While you may not want to go out and purchase a vehicle the day after you file, you can easily seek financing for a vehicle purchase within six months of your final discharge date.

Rebuilding Your Credit After Bankruptcy:

After you receive your discharge of debt and your bankruptcy is complete, you should take steps to rebuild your credit. Take these steps before attempting to make any major purchases (like buying a car). In a perfect world, bankruptcy petitioners repair their credit (and have a good credit score again) before they take out any larger loans (like loans for a home or vehicle). But in some cases, recent bankruptcy filers need a car as soon as possible to get to work or transport their family, etc. So, in some cases, waiting around before purchasing a vehicle is not a viable option.

When You Need to Buy a Car After Bankruptcy:

Generally speaking, bankruptcy petitioners should plan to spend at least six months rebuilding their credit after bankruptcy before seeing a positive change in their credit score. Before you apply for a loan to purchase a new car after bankruptcy, bump up your credit score as much as possible. Actively seeking to improve your credit score is essential because it will determine whether or not you are approved for a loan, as well as determining your loan terms, interest rate, etc.

No matter why you need to file bankruptcy , the law office of Kenneth C. Rannick P.C is ready to help you determine the best options in your situation. You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists. We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process so you can get a fresh financial start.

The post Can You Buy a Car After Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Chapter 7 & Chapter 13 Bankruptcy Filers Should Beware Predatory Lenders

Sat, 04 Jul 2020 09:24:00 GMT

Many overwhelmed consumers seek refuge through bankruptcy. The protections of bankruptcy offer a fresh start, a new beginning. Yet for millions of individuals and families, a discharge of debt isn’t the only thing they’ll need to turn their new beginning into a successful “take two.” If you are a Chapter 13 bankruptcy filer, you should beware of predatory lenders. They may attempt to push and prod you into making financial moves that could damage or destroy your financial “fresh start” post-bankruptcy. In addition to obtaining a discharge of debt, bankruptcy filers need to seek positive financial change and avoid adverse financial decisions (like predatory loans that could leave them back where they started).

Make the Most of Bankruptcy’s Discharge of Debt:

Debt forgiveness is vital, but it’s not enough to alter the cycle of debt unless filers adopt new habits, learn new skills, and change their lifestyle. If you want to avoid the cycle of debt, seek a sustainable income, and maintain adequate health care. And beware letting the bankruptcy discharge turn into an open door for predatory lenders.

Building a Healthy Financial Life After Bankruptcy:

Many bankruptcy experts not only think that more consumers should file bankruptcy , but that the consumers who do file should file sooner. Before filing bankruptcy, many consumers wait – pulling from their 401k’s or borrowing money from family. They extract wealth in ways that hurt their long term financial health instead of seeking the protections of bankruptcy immediately. After filing, some consumers continue to struggle—those who don’t tend to actively build a stable financial future directly after receiving their discharge.

25% of Debtors Find Themselves Financially Unstable Post-Bankruptcy:

Why do so many debtors end up in financially unstable positions again post-bankruptcy? Contrary to popular belief, it’s not necessarily misuse of credit fueling the cycle of debt post-bankruptcy. Most families don’t need anything outside of the typical mortgage, rent, utilities, and car payment to keep them struggling to stay above water. The culprits are more often declining household income due to illness, unemployment, or simply advanced age.

Chapter 7 and Chapter 13 Filers Should Beware Predatory Lenders Post-Bankruptcy:

While many fear they will never have access to credit again if they file bankruptcy , the lending industry is eager to offer credit to recent filers. But the credit is often available through predatory loans that continue the cycle of debt. Recent bankruptcy filers receive (on average) 10 credit card offers per month (and they receive additional solicitations for payday loans, mortgage refinances, and auto loans on top of the traditional credit card offers). These offers are usually low-limit, high fee cards with interest rates that should probably be illegal.

Choosing Which Credit to Accept Post-Bankruptcy:

While the existence of “predatory lenders” may leave a bad taste in the mouth of recent bankruptcy filers who feel they are being taken advantage of, the need for credit to repair credit post-bankruptcy is also real. Be aware that predatory lenders are out there and that they want to loan you money at exorbitant rates and fees, but don’t assume every lender is out to get you. Carefully consider the fine print of any offer of credit you are seriously considering post-bankruptcy and choose the option that is best suited to helping you repair your credit while avoiding stepping back into the cycle of debt.

If you are buried in debt and facing financial catastrophe, we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. to help you determine your best options. We help good people through bad times every day, and we can help you, too.

The post Chapter 7 & Chapter 13 Bankruptcy Filers Should Beware Predatory Lenders appeared first on Kenneth C. Rannick, P.C. .

How Does a Georgia Chapter 13 Bankruptcy Plan Help?

Tue, 30 Jun 2020 09:07:00 GMT

Chapter 13 bankruptcy is often referred to as a “wage earner’s plan.” Chapter 13 bankruptcy helps petitioners with a regular income to create a plan to pay their debt (or part of their debt). Chapter 13 bankruptcy petitioners make installment payments to the bankruptcy court through a three- to five-year repayment plan designed to manage their debt, while repaying their creditors.

If the debtor’s monthly income is lower than the state median, the bankruptcy court will typically put a three-year plan in place unless there are special circumstances.

The Chapter 13 Bankruptcy Process:

After meeting eligibility requirements and submitting the required documentation, petitioners wait for the bankruptcy court to create a repayment plan based on their income. Petitioners should make all their payments on time throughout their Chapter 13 repayment plan. At the end of the three or five-year plan, the court discharges remaining debts. In some cases, the “remaining” debt can be significant.

How Does Chapter 13 Bankruptcy Help?

Protects Your Home: During Chapter 13 bankruptcy, the petitioner’s home is under the protection of the US Bankruptcy Court, and a foreclosure is prevented.

Protects Your Car: During Chapter 13 bankruptcy, creditors are prevented from repossessing your vehicle.

Prevents Additional Interest: During Chapter 13 bankruptcy, creditors cannot charge interest on debts.

Prevents Collections: Creditors are not allowed to harass Chapter 13 Bankruptcy filers for payment. The law prohibits creditors from contacting debtors regarding repayment of a debt.

Eliminates Second & Third Mortgages: Chapter 13 bankruptcy helps convert second and third mortgages from secured debts to unsecured debts, which can help homeowners underwater on their property.

May Lower Interest Rate on Vehicle Loans: Chapter 13 bankruptcy may lower the interest rate or even the balance on your car loan. Bankruptcy law requires that petitioners only pay fair market value for a vehicle if it was purchased more than 910 days before filing. If the car was purchased less than 910 days before filing, the court allows petitioners to pay creditors no more than 2% higher than the prime interest rate on the day they filed.

The Chapter 13 Bankruptcy Repayment Plan:

During a Chapter 13 bankruptcy , the court will determine the amount petitioners need to pay each month. Priority debts are paid in full (i.e., spousal support, child support, tax debt, etc.) Secured debts receive regular payments, and unsecured debts may receive anywhere from 0-100% of the total debt they are owed depending on the amount of disposable income the petitioner has available at the end of each month.

The post How Does a Georgia Chapter 13 Bankruptcy Plan Help? appeared first on Kenneth C. Rannick, P.C. .

As Consumer Debt Reaches Another All-Time High, Americans Consider Bankruptcy

Fri, 26 Jun 2020 09:03:00 GMT

It’s no surprise that many Americans are buried in debt. We were in a dangerous spot before the recession hit, but when the economy takes a turn for the worse, jobs become scarce, and people break into their rainy day savings (and in some cases, their retirement), those who were treading water start to sink fast. For many households, it’s just a baby step from struggling with debt to facing foreclosure, and struggling to provide the bare necessities. The fear of falling on hard times is hitting more American households as the Covid-19 pandemic causes drastic changes, and as American consumer debt reaches all-time highs .

The Long Term American Relationship with Debt:

Being in debt is not a new idea for Americans, and it’s not a bad idea. Americans take on debt for several reasons that are entirely above board, respectable, and even admirable. Americans might take on debt to purchase a home or a car, to send their child to college, etc. Debt is a big part of what makes capitalism work. The system is built on the extension of credit and the debt that credit creates.

Consumer Debt in America:

After the second quarter of 2019, American consumer debt was approaching $14 trillion. The second quarter of 2019 constituted the 20th consecutive quarter in which American consumer debt increased. American consumer debt in the second quarter of 2019 totaled $13.86 trillion. This was up $219 billion from the first quarter of 2019 and passed the previous record high of American consumer debt by $1.2 trillion. (Previously, the record high for American consumer debt was $12,68 trillion in the third quarter of 2008).

Different Types of Consumer Debt in America:

There are four main areas of consumer debt that see consistent growth in America: home, auto, credit cards, and student loans. The modern-day credit card entered the scene in the late 1950s and brought significant buying power to US consumers. It also brought a new threat to US households – a substantial increase in the potential for financial disaster. Over 189 million Americans have credit cards. The average cardholder has four different credit cards. American households with credit card debt carry an average of $8,398 in total credit card balances.

If you are facing financial disaster due to overwhelming credit card debt, don’t hesitate. Call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post As Consumer Debt Reaches Another All-Time High, Americans Consider Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Should I Feel Ashamed of Filing for Bankruptcy?

Wed, 24 Jun 2020 09:39:00 GMT

As experienced bankruptcy attorneys, we are often faced with clients who are concerned about filing bankruptcy. Some common concerns are physical worries about feared, tangible losses like whether or not they’ll lose their car or their house. Others are more emotional worries. The most common emotional worry we see potential bankruptcy filers experience is shame. Yet you should never feel ashamed to do what’s best for you and your family.

The Bankruptcy Process May Not Be as Hard to Face as You Fear:

For most people, bankruptcy is a fairly routine process. The process is not simple – and there are a lot of ways it can go wrong if you don’t lean heavily on an experienced bankruptcy attorney . Still, when handled correctly, most bankruptcy cases proceed without problems. 800,000 Americans filed bankruptcy in 2016. Most of them worked alongside experienced bankruptcy attorneys and did everything they were supposed to do, and had a very dull, routine bankruptcy process for everyone involved.

When is the Bankruptcy Process Not Routine?

There are a few situations that can occur during a bankruptcy that can cause things to get interesting:

Both of the above situations can easily be avoided by working with a good bankruptcy attorney.

The easiest way to avoid these situations is to work with an experienced attorney. If you are working with an experienced attorney and you somehow end up in either of these situations, it is incredibly beneficial to have someone beside you that knows how to help.

Many Bankruptcy Filers Never Even See a Judge:

While the possibility for complications exists, most bankruptcy filers never even see a judge. Before filing, many have worst-case scenario visions of themselves personally standing in front of a stranger answering questions and defending or justifying their choices, their lifestyle, their purchases, and their failures. This is not a regular occurrence, and versions of this only happen in cases that get interesting. Most Chapter 7 bankruptcy cases don’t even go before a judge.

If Chapter 7 Proceedings Do Get Interesting:

If you file Chapter 7 bankruptcy and you do end up before a judge, they aren’t going to ask you why you are in debt or judge your past spending sprees as unwise, or ask you why you don’t have more money in savings. If you do end up in front of a bankruptcy court judge, they’ll be requesting that you review a complex issue in the case, or answer simple questions like does the creditor have the grounds to challenge your bankruptcy case? In Chapter 13, it is more likely that a petitioner will see a judge once – when confirming the repayment plan. Still, the judge will not be analyzing your past financial decisions or judging your mental agility; the judge will be deciding if the plan fits in the federal bankruptcy guidelines.

The post Should I Feel Ashamed of Filing for Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Why Is It So Hard to Get Student Loans Discharged in Bankruptcy?

Mon, 22 Jun 2020 09:35:00 GMT

If you are a college student or were a college student and you are facing student loans that seem to far exceed any amount of credit you planned on facing, you’ve probably wondered why it’s so rare to hear of student loans discharged in bankruptcy.

Why Can’t You File Bankruptcy to Get Rid of Student Loan Debt?

Did you know that US borrowers owe a combined $1.59 trillion in student loans? If you are one of the many out there who are contributing to this staggering total, you might be struggling to keep up with your student loan payments. You may even be feeling burdened by the student loan debt and considering filing bankruptcy for relief. However, student loans are rarely dischargeable in bankruptcy.

Why Are Student Loan Debts So Rarely Dischargeable in Bankruptcy?

The first step is identifying if you qualify to file Chapter 7, as opposed to Chapter 13. Petitioners must pass the means test to qualify to file Chapter 7 bankruptcy. The means test measures income against the median income for households of a similar size in the filer’s resident state. If you pass the means test and qualify for Chapter 7 bankruptcy, you need to show that you don’t have the financial ability to pay back your student loans in your lifetime or that paying back your student loans in your lifetime would pose an undue financial hardship.

The Brunner Test Can Be Used to Determine Eligibility for Student Loan Discharge:

Most bankruptcy courts use the Brunner Test to decide if student loans are eligible for bankruptcy discharge . Under the Brunner Test, the bankruptcy filer must show that:

What This Means for Student Loan Borrowers Filing Bankruptcy:

If you are a student loan borrower considering filing bankruptcy, here’s what all this means for you. Unless you’re very old or you can’t hold down a job because of a permanent disability, you will have a hard time getting a bankruptcy court to agree that your financial situation isn’t likely to change in the future. It’s also important to note that since there are many different interpretations of “reasonable” standard of living, the bankruptcy court may not recognize living at “home” with your parents until you’re 50 or bunking in a friend’s basement with four roommates as an unreasonable standard of living. Additionally, other criteria are open to interpretation. Overall, bankruptcy courts tend to avoid letting student loan borrowers discharge the debt. All these factors together mean that student loan debt is generally considered not dischargeable in bankruptcy.

Can Bankruptcy Still Benefit Overwhelmed Students?

Many students and past students overwhelmed by student loan debt still find bankruptcy beneficial since all eligible debts are discharged, which often leaves them with more discretionary income to work with when attempting to pay down their student loans.

Do you have questions about bankruptcy law and how to manage student loan debt by filing bankruptcy? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

The post Why Is It So Hard to Get Student Loans Discharged in Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

The Nationwide Phenomenon Some Are Calling Gray Bankruptcy

Thu, 18 Jun 2020 08:32:00 GMT

Did you know that “gray” bankruptcies are on the rise ? The number of Americans over the age of 65 that file bankruptcy has more than tripled since 1991.

Why Are So Many Seniors Filing Bankruptcy?

There are many factors that experts consider as contributors to the “gray” bankruptcy phenomenon. Possible contributing factors include eroding Medicare and Social Security benefits, shifts away from defined benefit pensions, increasing health care costs, and more. There are a wide variety of options if you’re looking for economic and societal changes that contribute to the financial woes of modern-day seniors.

But What About Seniors and Gray Bankruptcy?

According to a recent study from Consumer Bankruptcy Project researchers, the number of Americans aged 65 to 74 that filed bankruptcy doubled since 1991. And the number of Americans over the age of 75 that filed bankruptcy tripled. One out of every seven bankruptcy filers in the United States is aged 65 or older. The numbers indicate an increase of close to nearly five-fold in the space of just twenty-five years, and that constitutes a notable demographic shift. The study was based on surveys collected from February 2013 and November 2016. The study collected data from 3,200 people who declared bankruptcy.

What Are Some of the Most Common Causes of Gray Divorce?

When the study participants were asked about the reason or reasons they decided to declare bankruptcy. Study participants that fell into the senior age range often cited medical expenses and general debt. One study participant’s answer indicated that his wife experienced medical issues that led to her leaving her job, which resulted in a loss of income. Two years later, the husband himself developed medical problems and had to stop working. The couple soon found themselves unable to handle their debt load. After the situation escalated to constant collection calls, they contacted a bankruptcy attorney for help. This particular example of the 62.2% of study participants in the senior age group identifying medical expenses as the reason they filed bankruptcy, many of which also blamed reduced government benefits and medical tests not covered under insurance.

If you are considering filing personal bankruptcy and you aren’t sure if it’s the best decision for your situation, please don’t hesitate to get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post The Nationwide Phenomenon Some Are Calling Gray Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

What is a Chapter 13 Bankruptcy Hardship Discharge?

Tue, 16 Jun 2020 08:30:00 GMT

Chapter 13 bankruptcy filers generally receive their discharge when they complete their repayment plan, but the Chapter 13 bankruptcy repayment plan is in place for either three or five years. During this time, some may experience a significant change of circumstance that could prevent them from completing their Chapter 13 repayment plan. If you experience a significant change during your Chapter 13 repayment plan, you may be able to request a hardship discharge from the bankruptcy court.

What is a Chapter 13 Hardship Discharge, and Who is Eligible?

Chapter 13 hardship discharge is a discharge granted by the bankruptcy court before the successful completion of the repayment plan. To receive a hardship discharge, Chapter 13 filers must file a motion with the court and meet the following eligibility requirements:

What Changed Circumstances Justify a Hardship Discharge?

Chapter 13 bankruptcy petitioners seeking to qualify for the hardship discharge must experience a change in circumstances that is not their fault. The bankruptcy will expect the petitioner to show a serious and permanent reason that prevents them from successfully fulfilling the terms of their repayment plan. An example of this type of serious, permanent situation may be a serious and permanent medical condition that arose post-filing. A temporary job loss or decrease in pay is not sufficient to qualify for a hardship discharge.

What Debt Are Discharged by a Hardship Discharge?

When a Chapter 13 bankruptcy trustee issues a hardship discharge, it is similar to the Chapter 7 bankruptcy discharge. The Chapter 13 hardship discharge only wipes out dischargeable, nonpriority, unsecured debts. Since the Chapter 13 bankruptcy filer is no longer making their payments, they can’t catch up on missed mortgage payments, car payments, or pay off nondischargeable priority debts. Generally speaking, the following types of debts are not eliminated by a Chapter 13 hardship discharge: priority obligations, secured debts, student loans, or any debts that would not be eligible for discharge in Chapter 7.

If you have questions about filing for a Chapter 13 hardship discharge or want to discuss filing bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Can Bankruptcy Petitioners Choose Which Debts are Paid Off First?

Fri, 12 Jun 2020 09:28:00 GMT

When you are considering filing bankruptcy, you have a lot on your mind. You need to think about your specific financial situation and the eligibility requirements for Chapter 7 bankruptcy. You need to consider whether your situation is best suited to Chapter 7 bankruptcy or Chapter 13 bankruptcy. If you own property, you need to consider how the different types of bankruptcy would treat your property. If you are a business owner, you need to determine whether or not your business will be adversely affected by the filing. You’ll need to gather documents and tax returns, organize it all, make decisions, and schedule consultations to make sure your bankruptcy attorney has all your information. It’s a lot to think about, but there are some things the petitioner doesn’t have to think about – like which creditors get paid first.

Who Decides Which Creditors Get Paid First?

Creditors are supposed to be paid fairly in bankruptcy. The bankruptcy court and the bankruptcy trustee oversee the process. The automatic stay halts all collection activity, but creditors give proofs of their claim to basically “line up” to be paid through your bankruptcy estate.

How Does the Court Decide How Much to Pay Creditors in Chapter 7 Bankruptcy?

In Chapter 7 bankruptcy, if there are not enough funds in your bankruptcy estate to pay all your creditors in full, payments are issued by percentages to each of them. In a Chapter 7 bankruptcy case, some secured creditors will receive the property back (like a vehicle or a piece of real estate). Although petitioners who wish to keep their property associated with secured loans may do so by signing a reaffirmation agreement that says they are still obligated to make payments on the property. Non-exempt property is sold in Chapter 7 bankruptcy, and the proceeds from the sale are used to pay creditors according to a standard priority order with non-secured creditors at the bottom of the list.

How Does the Court Decide How Much to Pay Creditors in Chapter 13 Bankruptcy?

Similar to Chapter 7 bankruptcy, the Chapter 13 bankruptcy process provides payment to secured creditors before any payment to non-secured creditors. Other debts that are given priority include child support, spousal support, tax debt, etc. Unsecured debts receive whatever disposable income remains after the “priority” debts are paid. The remaining disposable income is divided amongst the unsecured creditors. Some debts, like student loans, are typically excluded from the process as they are generally not eligible for discharge in a Chapter 7 bankruptcy and are still in place after a Chapter 13 bankruptcy.

If you are worried about which of your debts will be paid during bankruptcy, we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C.

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Will Financial Challenges Related to Covid-19 Lead to More Bankruptcy Filings?

Tue, 09 Jun 2020 09:11:00 GMT

With the onset of massive changes in the workplace across the nation, many are wondering if we will see an increase in consumer bankruptcy filings in response to the Covid-19 pandemic. It’s difficult to predict this type of trend, but most do expect the number of consumer bankruptcies to increase.

What Will the Increase in Consumer Bankruptcy Filings Look Like in the U.S.?

It is doubtful that there will be an immediate surge in bankruptcy filings in the next few months. There is a foreclosure moratorium on any federally backed mortgages (which constitutes for two-thirds to three-quarters of all mortgages in the U.S.). Collections on student loans are stopped. Immediate pressure pushing consumers to declare bankruptcy is also currently relieved by support for state moratoriums on debt collections and rental evictions. The increase will likely be seen down the road when financial problems accumulate. Most bankruptcy petitioners struggle for two to five years before they file bankruptcy. They wait, postpone, and keep trying to weather the financial storm. Others delay for pragmatic reasons, deciding it doesn’t make sense to file bankruptcy when debts are going to continue to pile up. Considering these standards supported by past bankruptcy statistics, it’s safe to say that we will likely see a surge in bankruptcy filings after economic recovery. That’s not to say that people aren’t struggling. It’s important to remember that families can struggle financially and not be in seeking bankruptcy.

Bankruptcy and Recession: What We Learn from Past Recessions

If you look through history, increases in bankruptcy filings don’t always coincide with recessions. For instance, the U.S. saw a record high for bankruptcy filings in the late 1990s when the economy was booming. When considering the current situation due to the Covid-19 pandemic, it’s challenging to make straight forward comparisons because we’re facing an unprecedented situation. There is no past analog that serves as an accurate model of how the consumer bankruptcy system will be affected. The closest precedent is the Spanish flu pandemic of 1918, but this isn’t helpful for the current question since the consumer credit system didn’t exist (at least not in a comparable form). We have no historical precedent applicable to the Covid-19 pandemic and how it will affect the consumer’s bankruptcy system.

Can the Bankruptcy Courts Handle a Potential Influx in New Filings?

While bankruptcy professionals agree that we should probably expect an eventual increase in bankruptcy filings, most aren’t comfortable predicting when the influx is likely to occur. However, before the pandemic, the U.S. was at historically low levels of bankruptcy filings, which suggests that the courtrooms and law offices can handle an influx of new bankruptcy cases.

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Does Divorce Make Women More Vulnerable to Financial Trouble?

Mon, 08 Jun 2020 09:21:00 GMT

Did you know that divorce is often cited as the reason women go into bankruptcy? Did you know that the most common reasons for filing bankruptcy are different for men and women?

What Are the Most Common Reasons Men File Bankruptcy?

The most common reasons men go into bankruptcy are losing a job or a business failure. For women, the most common reasons are quite different.

What Are the Most Common Reasons Women File Bankruptcy?

The most common reasons women go into bankruptcy are the end of a relationship (divorce), loss of a partner’s income, or living beyond their means/overspending. Men are still more likely to file bankruptcy than women, but certain groups of women are particularly at risk for bankruptcy, and divorce is a catalyst according to statistics. It’s well known (and accepted) that debt can wreck a marriage, but getting divorced due to financial problems doesn’t end the financial tangle. It usually drives a couple deeper into debt – an often leads to bankruptcy.

Why Does Divorce So Often Lead to Bankruptcy?

When the cards are all laid on the table, there is rarely just one reason or one cause of bankruptcy. But there’s often a “last straw,” and in many cases, that last straw ends up being divorce. After divorce, single life looms. And not just dating, but suddenly carrying the responsibility for the bills on your own again. And while there may have been a time when surviving on ramen and dollar menu items was a norm you could carry off with aplomb, its rough to resize your life to suit a drastically limited budget immediately following a divorce.

Emotional Strain of Divorce Can Also Lead to Increased Debt:

The divorce process (and many other aspects of ending a long term relationship) are emotionally exhausting. This emotional drain does not make the financial adjustment from married life (often with two incomes and one shared set of household bills) to single life (usually with one or no income and separate household bills) any easier. Recently divorced women may be ready to downgrade their lifestyle from their married life to one more suitable to being single again, but it often comes at a cost – a high startup cost, that is. It may take some time to find a new place to live. Once you find it, you may need to dish out first and last month’s rent plus a security deposit. And that’s just the beginning.

Why Are Women More Financially Vulnerable After Divorce?

Women are often more financially vulnerable during (and following) divorce. Men are more likely to have a higher income (and higher debts), but women tend to be more disadvantaged when a couple goes their separate ways. Studies indicate that while close to 30% of women who file bankruptcy are divorced, only about 24% of men who file bankruptcy are divorced. Close to half of the women who filed bankruptcy had dependents (compared to about 34% of male bankruptcy filers), and 27% of women who file divorce are single parents (compared to only 8% of male bankruptcy petitioners). Women often have lower incomes and receive custody of their children in divorce – a combination that can mean managing finances may be a struggle.

No matter why you are considering bankruptcy, the law office of Kenneth C. Rannick P.C is ready to help you determine the best options in your situation. You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists. We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process so you can get a fresh financial start.

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Does the Chapter 7 Discharge Include Recent Credit Card Debt?

Thu, 04 Jun 2020 09:16:00 GMT

If you are a Tennessee or Georgia consumer and you are considering filing for Chapter 7 bankruptcy, your most significant reason for taking action is probably overwhelming debt, such as credit card debt. Since Chapter 7 bankruptcy discharges virtually all credit card debt, many struggling consumers may be tempted to get themselves “settled” before filing. They decide to continue using their credit cards right up until they file bankruptcy – since the debt is included in the bankruptcy anyway. Right?

Tempted to Use Your Credit Cards Right Up Until You File Bankruptcy? Please Reconsider.

If you are planning to file bankruptcy and you also plan to continue using your credit cards right up until it’s time to file your bankruptcy petition , you should reconsider. Bankruptcy Code includes a presumption against the discharge of “recent” credit card debt. Any credit card debt over $675 incurred for purchasing consumer goods within 90 days of the date you file bankruptcy will not be discharged.

Is It Possible to Get Recent Consumer Debt Discharged?

While the Bankruptcy Code presumption is specific, some debtors do find themselves facing both the need to file bankruptcy and recent credit card charges. If you need to file bankruptcy and you recently used your credit cards, work with an experienced bankruptcy attorney to present information to the Court. An experienced attorney can help you show that at the time of the charge, you had no intention of filing bankruptcy and that the items purchased were not luxury items. The Court may overrule a creditor’s objection and allow debt to be discharged. While the presumption against the discharge of new debt exists in the Bankruptcy Code, it represents a rebuttable presumption. In any given bankruptcy case, the petitioner can rebut the presumption by showing evidence to the Court (receipts, documentation, etc.) to make it inapplicable to the case.

Better Safe Than Sorry – Stop Using Credit Cards When You Decide to File Bankruptcy

While the possibility exists to rebut the presumption preventing recent credit card debt from being included in the Chapter 7 discharge of debt , you should stop using all your credit cards as soon as you find yourself considering bankruptcy. Failing to set all the credit cards aside immediately is a huge risk – not just to that particular portion of the overall debt, but to the entire bankruptcy case. If the bankruptcy court decides that your behavior was intentional, or worse, fraudulent, it could lead to your bankruptcy case being dismissed or even leave you facing charges.

If you have questions about the bankruptcy process, or if you need to discuss the protections offered by bankruptcy, we can help. Find out how to get a fresh start by filing bankruptcy. Get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Can I Keep My Home in a Georgia Bankruptcy?

Tue, 02 Jun 2020 08:13:00 GMT

Are you a Georgia homeowner filing bankruptcy ? If so, the question at the top of your mind is probably whether or not you can keep your house in a Georgia bankruptcy. Some Georgia debtors avoid filing bankruptcy because they don’t want to lose their homes. This avoidance often leads to even more severe debt issues and stress that could have been avoided. Don’t waste time making assumptions about what you can and can’t do during a Georgia bankruptcy. Just ask your Georgia bankruptcy attorney.

What Can Happen to a Person’s Home After Filing Georgia Bankruptcy?

Several factors come into play to determine whether a Georgia bankruptcy petitioner’s home is safe from seizure in bankruptcy. Researching your situation and consulting with an experienced consumer bankruptcy specialist is imperative before coming to a final decision about filing.

The Types of Bankruptcy:

There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13 bankruptcy. If the primary goal in the bankruptcy is to save the home, Chapter 13 is the safest, but it’s not always necessary. Your home is not automatically taken from you when you file bankruptcy. It’s far more likely that a bankruptcy filer will keep their home regardless of whether they file Chapter 7 or Chapter 13 bankruptcy.

How are Debtors’ Homes Handled During Bankruptcy?

In a typical bankruptcy, when the filer is also a homeowner, the story begins with a struggle to pay overwhelming credit card bills or medical debt, while also maintaining on-time mortgage payments. Many who find themselves in this situation fall behind on their credit card or medical bills, but struggle to stay up to date with their monthly mortgage payments to avoid foreclosure. If the homeowner eventually decides to file bankruptcy and qualifies for Chapter 7, they keep their home in most scenarios. Chapter 7 bankruptcy concludes in a discharge of all dischargeable debt (including home loans). Still, interested homeowners can sign a reaffirmation agreement with their mortgage company, file it with the bankruptcy court, and maintain the mortgage as an official debt that the borrower resumes once the bankruptcy is closed. This series of events enables homeowners to take advantage of the fresh start of a Chapter 7 bankruptcy while maintaining their homeownership.

What If the Home Equity Exceeds the Georgia Homestead Exemption Amount?

The only problem with the “typical” scenario outlined above is if the homeowner/bankruptcy filer has a large amount of equity in their home. Most homeowners with mortgages don’t have enough equity to cause a problem, but the Georgia Homestead Exemption is capped at $21,500 of equity. Bankruptcy filers can also apply $5,000 of any unused portion of the Georgia homestead exemption towards other property.

What If the Bankruptcy Filer is Not Current On Their Mortgage?

When the homeowner is not current on their mortgage payments, they run the risk of foreclosure, whether it happens before, during, or after bankruptcy. But the average debtor will be able to file Chapter 7 bankruptcy and keep their home as long as their mortgage payments are not past due. Bankruptcy filers who want to keep their home, but are past due on their mortgage may need to depend on Chapter 13 bankruptcy instead of Chapter 7 .

Filing Chapter 13 Bankruptcy to Save Your Home From Foreclosure:

Most people hoping to save their homes from foreclosure file Chapter 13 bankruptcy. The bankruptcy process of Chapter 13 is much more conducive to stopping foreclosure since it allows the bankruptcy petitioner to catch up on their mortgage payments during the bankruptcy process.

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Can My Tennessee Bankruptcy Impact My Job Search?

Fri, 29 May 2020 09:09:00 GMT

If you are worried about bankruptcy negatively affecting your employment, you probably shouldn’t bother worrying. It is illegal for employers to fire someone because they filed for bankruptcy. However, the story is a little bit different if you are currently looking for a job and need to file bankruptcy. Being denied employment due to an in-progress or recent bankruptcy is not outside the realm of possibility.

Can an Employer Decline to Hire a Job Applicant Based on a Record of Bankruptcy?

According to the law, private employers may deny an applicant a position if they are in bankruptcy or recently filed bankruptcy , but public employers are not offered this same luxury. Bankruptcy code prevents governmental units (public employers) from denying employment or terminating employment due to bankruptcy. Bankruptcy Code also governs the behavior of private employers, but in a separate section.

What Protection Does the Bankruptcy Code Offer Petitioners with Private Employment?

In Section 525(b), Bankruptcy Code prohibits employment discrimination based on bankruptcy, but it does not prohibit “denying” employment to a bankruptcy petitioner. Bankruptcy code prohibits private employers from terminating employment or discriminating against someone due to bankruptcy, but there is no mention of job applicants being denied work based on bankruptcy.

Can a Private Employer Deny a Job Due to Bankruptcy?

While some may argue that a plain reading of the Bankruptcy Code seems to prevent private employers from denying employment based on bankruptcy , case law has a history of trending in the other direction. The vast majority of cases ended with courts finding that private employers are not subject to liability for denying employment.

Bankruptcy and the Job Search:

If you are considering filing bankruptcy and you are currently looking for a job, you may want to consider some practice advice. Remember that an employer’s hiring or firing decision may be based on any number of multiple factors: the applicant’s credit score, a financial history screening, experience, education, personal demeanor, etc. While an employer may have the right to deny you employment based on a record of bankruptcy, that doesn’t mean that the employer will deny you the job. The potential harm a bankruptcy can have on a job search also depends heavily on what type of job is being considered. For instance, when seeking a job as a financial advisor, it may be given more weight during the hiring process than if applying for a job as a graphic designer.

If you are avoiding bankruptcy because you fear the effect it could have on your job or job search, don’t hesitate. Call Kenneth C. Rannick P.C ., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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What If I Am Unable to Complete My Chapter 13 Bankruptcy?

Wed, 27 May 2020 09:42:00 GMT

If you filed Chapter 13 bankruptcy to obtain relief from overwhelming debt, you agreed to make monthly payments and fulfill a payment plan through the bankruptcy court. In some cases, the bankruptcy petitioner may find that their situation changes after they agree to the Chapter 13 plan payments. What can you do if you can’t make your Chapter 13 plan payments?

Options If You Can’t Make Your Chapter 13 Plan Payments:

Completing a Chapter 13 repayment plan is not easy. Falling behind on your Chapter 13 plan payments may mean the bankruptcy trustee or one of your creditors will ask the court to dismiss your bankruptcy case. However, you do have options that could help you save your bankruptcy and obtain the eventual discharge of debt.

If You Can’t Make Your Chapter 13 Plan Payments: Temporary Financial Hardship

The first option you have if you have fallen behind on your Chapter 13 plan payments is to get current. Temporary financial emergencies may cause bankruptcy debtors to miss plan payments, but most petitioners can catch up on their payments if they have enough time. If you are behind on your payments and you fear your bankruptcy may be dismissed, speak with your bankruptcy trustee. In most cases, you can reach an agreement to bring Chapter 13 plan payments current by a specific date.

If You Can’t Make Your Chapter 13 Plan Payments: Changed Circumstances

If the financial emergency you are facing that resulted in your default is not temporary, you may be able to request the court reduce your Chapter 13 plan payment amount. For example, if you lose your job while during your Chapter 13 repayment plan, the court may grant a request to modify the amount you need to pay. When filing the motion, make sure to propose a new payment amount and offer evidence of your changed circumstances that make the original payment amount impossible. In some cases, the court will not have the ability to reduce your payment amount. For instance, if your plan payment is being applied to nondischargeable debts (i.e., certain tax debt or child support arrearages, etc.) When the full payment amount originally agreed on for the Chapter 13 repayment plan goes towards nondischargeable debt, a payment modification is not possible.

If You Can’t Make Your Chapter 13 Plan Payments: Request a Hardship Discharge

In some cases, changed circumstances may amount to a hardship that the court could recognize as cause to grant a discharge even though you haven’t completed the required plan payments. The bankruptcy court will consider your current financial situation and what is in the best interest of your creditors when deciding whether or not to grant a hardship discharge. It is very rare for the bankruptcy court to give a hardship discharge, and most filers who receive a hardship discharge won’t get any debt wiped out due to the different types of debt and how they are handled during a Chapter 13 bankruptcy.

If You Can’t Make Your Chapter 13 Plan Payments: Convert to Chapter 7 Bankruptcy

If you are currently in a Chapter 13 repayment plan and you cannot make your monthly payment, you may be able to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy. Converting to Chapter 7 is different than receiving a hardship discharge because the Chapter 7 bankruptcy trustee will sell any nonexempt property to pay creditors. If you qualify for Chapter 7 bankruptcy, all qualifying debt is wiped out, but it does not get rid of priority debts or allow petitioners to catch up on past due mortgage payments.

If You Can’t Make Your Chapter 13 Plan Payments: Dismiss the Case and Refile

If none of the above options work for you, you could allow the bankruptcy court to dismiss your case and refile a new Chapter 13 bankruptcy. Refiling may be the best option if you can’t afford your current Chapter 13 repayment plan payment, but Chapter 7 bankruptcy doesn’t suit your circumstances. After you recover a bit financially, you can file a new Chapter 13 bankruptcy. However, the automatic stay is not always issued for successive bankruptcy cases, so depending on when you file the new Chapter 13 bankruptcy, you may need to request that the court extend the automatic stay.

If you need to discuss filing bankruptcy, or if you can’t make your Chapter 13 repayment plan payments , please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Dealing with Creditor Harassment Before, During and After Bankruptcy

Mon, 25 May 2020 09:39:00 GMT

At one time or another, everyone is contacted by a collector. It may be due to accidentally missing a payment or misplacing a bill. You may have fallen behind on your credit card payments, your mortgage, or your car payment. You may have experienced a traumatic or unexpected illness that left you buried in medical bills. Regardless of what, when or why, when a creditor’s payment doesn’t arrive, the collector eventually calls. In some situations, collection calls can begin to feel like a concerted attack.

When Creditors Don’t Stop Calling:

If you are receiving constant or harassing collection calls, you can take action to protect your home and family. Your rights as a consumer are protected, and collectors are required to abide by specific rules. For instance, if you are contacted regarding a debt you do not owe, or with an inaccurate amount, write a letter to the collection company and the original creditor stating that you do not agree you owe the debt or explicitly stating that the amount of the debt they are trying to collect is inaccurate, and request a copy of your payment history.

Advising the Credit Reporting Agencies of Debts in Dispute:

If the debt is reported to credit reporting agencies, contact the agencies directly to inform them the debt is in dispute. Make sure to sign and date any correspondence to collectors, creditors, or credit reporting agencies and keep a copy for your records.

When Collectors Refuse to Stop Contacting You:

If the collectors refuse to stop contacting you, you may send a letter requesting they stop collection communications under the terms of the Fair Credit Collection Practices Act. Additionally, bill collectors are forbidden by the Collection Practices Act from calling at inconvenient times (i.e., before 8 am or after 9 pm). They are also not able to communicate with third-parties such as neighbors, co-workers, etc.

Debt Collectors that Take it Too Far Can Face Consequences:

Debt collectors are prohibited from lying to you to obtain payment. They are not to use false, deceptive, or misleading information to collect credit card debt , or any other type of debt. Collectors are prohibited from using or threatening to use violence to collect a debt or use profane language or harassing behavior. If you feel the collection company attempting to collect a debt from you is doing so illegally, obtain proof by logging calls, recording phone calls, putting them on speakerphone so a third party can witness the interaction, etc. Evidence to support your claims will be needed if you decide to file a complaint with the Federal Trade Commission.

Stop Debt Collectors in Their Tracks with Bankruptcy:

Constant collection calls, letters, emails, and messages can become an all-consuming barrage of negativity and harassment. While laws exist to govern the behavior of creditors and collection agencies, many collectors do not comply with the law, and regularly engage in illegal practices. While consumers can go through various legal channels to report and attempt to control unlawful collections behavior, some find it more advantageous to take advantage of the automatic stay of bankruptcy. Immediately upon filing, the automatic stay goes into effect, prohibiting all collections activity.

Do you have questions about bankruptcy law and how to stop creditor calls by filing bankruptcy ? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

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Can Filing Bankruptcy Increase Your Family’s Quality of Life?

Tue, 19 May 2020 08:36:00 GMT

Deciding to declare bankruptcy is a difficult choice. Bankruptcy may affect future credit opportunities, as well as your reputation and self-worth. However, it can significantly improve a family’s short-term quality of life.

Bankruptcy Improves Quality of Life: Stop Collection Calls

For many, the most immediate improvement to the quality of life due to a bankruptcy filing is that collections calls and letters stop. Immediately upon filing bankruptcy, the automatic stay goes into effect. The automatic stay prohibits all collectors from contacting the petitioner for payment during the bankruptcy process.

Bankruptcy Improves Quality of Life: Providing Much Needed Relief

Many individuals and families buried in overwhelming debt may not realize just how much strain financial problems put on their family relationships. For example, one of the most common reasons cited for divorce is a financial struggle. Many families see an almost immediate improvement in their home life, family relationships, and their productivity on the job, their children’s success in school, etc. Extreme financial trouble can put significant emotional stress on the entire family, and filing bankruptcy can provide a much-needed relief from the constant struggle.

Bankruptcy Improves Quality of Life: Provides a Route to a Better Financial Future

In addition to stopping collections calls, and discharging debt, bankruptcy provides families with a guide to a healthy financial future. All bankruptcy petitioners are required to complete two mandatory credit counseling classes, one before filing, and one before receiving a discharge of debt. Both credit counseling classes have a heavy focus on providing bankruptcy petitioners with all the tools and knowledge they need to make the most of their fresh financial start.

Are You Considering Chapter 7 Bankruptcy?

If you make the difficult choice to file Chapter 7 bankruptcy , make sure you discuss all the advantages and disadvantages of filing with an experienced bankruptcy attorney. Consider possibilities that could mean avoiding bankruptcy entirely, as well as preserving valuable assets if bankruptcy is the best choice in your situation.

If you are considering filing personal bankruptcy and you aren’t sure if it’s the best decision for your family, please don’t listen to conjecture. Instead, get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Are Southerners More Likely to Carry Substantial Credit Card Debt?

Fri, 15 May 2020 09:33:00 GMT

According to a study conducted by a popular online personal finance resource (creditcards.com), credit card debt in certain states may be associated with splurging inspired by southern hospitality. The data indicated that nine out of the ten states with the highest amounts of credit card debt were southern states. The only state on the list of top 10 states with the highest amount of credit card debt that wasn’t in the south was New Mexico.

American Households Dealing with Debt: Nationwide Averages

According to the study, the typical American household earning $61,937 can pay down $8,407 (the average credit card balance) in a little over a year. In doing so, this hypothetical American household would pay approximately $1,005 in interest charges. When you consider this scenario from state to state, the factor that makes the most significant difference to a family’s ability to get out of debt is the income they have to work with, so states with lower median incomes see a different scenario play out.

American Households Dealing with Debt in States with Lower Median Incomes

For instance, in a state with a median income closer to $47,169 (the median income of New Mexico according to the study data), and an average household credit card balance of $8,356 (similar to the nationwide average credit card balance), the time necessary to pay off the debt is closer to 17 months (requiring 15% of income). The total interest the consumer would pay during the 17 months would total approximately $1,339. Considering the two scenarios makes it clear how huge the impact a household’s income has on their ability to pay off credit card debt.

How Are Georgia and Tennessee Dealing with Debt?

The same data put the other 9 in the Top 10 states with the highest credit card debt in the South with Georgia taking the #7 spot and Tennessee coming in just outside the Top 10 as #11. The study found the following data on Tennessee and Georgia:

As evident in the above numbers, Georgia and Tennessee (along with other southern states in top spots on the list) are not carrying more credit card in comparison to the average American family, but they are facing a similar amount of debt alongside a lower median income, which makes it harder (and requires more time) to pay off the debt.

Why Are So Many Southern States Taking Top Spots?

More and more Americans are using credit for purchases. Records maintained by the Federal Reserve indicate that Americans are holding a record $1.04 trillion in credit card debt. The temptation to buy now and pay later is a powerful draw, and with only about 40% of Americans bringing in enough income to pay off their credit card balance in full each month (according to research groups at creditcards.com), the other 60% are dealing with debt. In the southern states, where “southern hospitality” redefines everyday behaviors, individuals and families may find themselves turning to credit cards when their available income is limited, but must face the resulting credit card balances with the same limited income. Southern states with a lower median income and the same average credit card balance as the rest of the nation are left in a tight spot. The same “average balances” in states with a higher median income are not as impossible to manage.

If you have questions about discharging credit card debt or want to discuss filing bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Debts That Are Not Discharged in a Chapter 7 Bankruptcy

Wed, 13 May 2020 09:29:00 GMT

Filing bankruptcy can get you out of debt and provide a fresh start. Many types of debt are discharged in both types of bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy. When a debt is discharged, it is wiped out, but not all debts are dischargeable.

Obtaining a Bankruptcy Discharge: What Is a Nondischargeable Debt?

If a bankruptcy petitioner has nondischargeable debt when they file Chapter 7 bankruptcy, they will still owe the debts after they receive their discharge. If a bankruptcy petitioner has nondischargeable debt when they file Chapter 13 bankruptcy , they will repay most of the nondischargeable debts in full during the bankruptcy court approved repayment plan.

Which Debts are Eligible for Chapter 7 and Chapter 13 Bankruptcy Discharge?

Many types of debt are eligible for discharge through bankruptcy. Some of the liabilities most frequently associated with overwhelming debt are included in the list of dischargeable debts, including:

Are Some Debts Only Discharged in Chapter 13 Bankruptcy?

If you have any of the following debts, you may find it more advantageous to file a Chapter 13 bankruptcy because they can only be discharged through Chapter 13:

Common Nondischargeable Debts: What Debts are Not Discharged in Bankruptcy?

Individuals buried in debt should be aware that some debts are not dischargeable. Nondischargeable debts include some debts that are never discharged, some debts that are not discharged unless you can successfully argue that they should be due to special circumstances. Some are not discharged only when a creditor is successful in arguing that they should not be eligible for discharge.

Which Debts are Never Discharged by Bankruptcy?

Under Chapter 7, additional debts are not discharged, including condo fees, coop fees, HOA fees, debts for retirement plan loans, and debts not discharged in a previous bankruptcy.

Which Debts are Not Discharged Unless You Successfully Argue a Legal Exception?

Certain debts are only discharged if you convince the court that you are an exception to rule or that you meet specific legal requirements. For instance, a bankruptcy petitioner may attempt to get a discharge of student loan debt by convincing the court that they will not be able to repay the debt. Another example is income tax debt. Bankruptcy does not discharge income taxes unless a specific amount of time has passed, and additional requirements are met.

Which Debts Are Not Discharged if a Creditor Successfully Objects?

Some dischargeable debts can become nondischargeable when a creditor successfully argues their case with the bankruptcy court. Some debts that may fall into the category include:

If you are worried about which of your debts will be discharged in bankruptcy, we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C.

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Does Divorce Increase Your Chances of Filing Bankruptcy?

Mon, 11 May 2020 08:27:00 GMT

Is there a connection between divorce and bankruptcy? Does divorce make bankruptcy more or less likely? Which comes first: bankruptcy or divorce? Divorce or bankruptcy? If you are considering filing for bankruptcy and divorce, the timing can be vital.

How Do Divorce and Bankruptcy Affect Each Other?

In most cases, bankruptcy takes precedence over a divorce. So, if you file bankruptcy during divorce , it can delay the division of property until the bankruptcy is complete. The divorce will essentially be put on hold until the bankruptcy case is finished. Considering this, you cannot really “do” both divorce and bankruptcy at the same time. Since debts are associated with an individual’s name or social security number, it can affect how the debts are handled in the divorce. The bankruptcy court also treats income differently based on the filer’s status upon filing: married, separated, or divorced.

Does It Make More Sense to File Bankruptcy Before or After Divorce?

If a divorcing couple is on good terms, they may want to consider filing bankruptcy before the divorce. Filing jointly means all debt is addressed in one bankruptcy case with joint debts wiped out together. It may also mean bankruptcy exemption amounts are higher due to the “joint” filing. Filing bankruptcy before divorce may also be helpful if one spouse makes all the money in the marriage as it will increase the chances of qualifying for Chapter 7 bankruptcy. Filing bankruptcy before divorce is also a good idea if there are financial obligations/loans that neither party wants to be responsible for, such as car loans, mortgages on houses that are underwater, etc.

Removing Debt from the Divorce Process Can Expedite the Process:

If you qualify for Chapter 7 bankruptcy, the process of filing and receiving a discharge of debt should be completed in a few months. If a couple files Chapter 7 bankruptcy before their divorce, unsecured debt can be eliminated. Receiving a discharge of debt before filing divorce can greatly benefit couples because it removes the fight over who is responsible for the debt. The division of property during divorce includes all assets and liabilities (including debt). The division of debt is one of the areas of divorce most likely to get contentious, so removing it entirely or removing a large portion of it before filing, might be a good idea.

When is Filing Divorce Before Bankruptcy a Good Idea?

If a couple’s joint income is too high to qualify for Chapter 7 bankruptcy, it may make sense to file after divorce. If you make significantly less than your spouse, you may be eligible to file Chapter 7 bankruptcy on your own after the divorce. And in some cases, both spouses may qualify for Chapter 7 bankruptcy after divorce. Completing the divorce first, before filing bankruptcy also means that any child support payments or spousal support payments are considered.

If you are buried in debt and facing a divorce, we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. to help you determine your best options. We help good people through bad times every day, and we can help you, too.

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Potential Bankruptcy Filers Beware: Common Debt Settlement Scams

Thu, 07 May 2020 09:24:00 GMT

Debt, in itself, is not a bad thing, but when an individual or a family has more liability than they can handle, it can be scary. When debt reaches insurmountable levels, it can become an overriding and overwhelming concern. The situation only escalates when creditors become involved, particularly when the creditors’ involvement increases to the level of harassment. Individuals and families facing constant creditor harassment can become desperate for a solution to the problem. People in this situation are often targeted by “debt settlement companies,” promising to make the debt go away. Sadly, a lot of groups claiming to be debt settlement companies are running scams that can lead to even more problems for people buried in debt and seeking relief.

Bankruptcy Filers Beware: Is it a Debt Settlement Scam?

Consumers, and potential bankruptcy filers specifically, need to be aware that debt settlement companies that run scams are a threat. They promise the impossible: a debt-free life with little effort and little money required. After making these promises, they very rarely keep them. Once the consumer realizes the reality of the situation, it’s too late. The consumer already fell for the promise, and they may end up paying more than the total of their original debt.

Signs of Common Debt Settlement Scams:

There are signs consumers can look for that indicate a supposed debt settlement company may be committing fraud.

When the truth comes to light, and the consumer realizes the company they thought was helping them settle their debts was scamming them, the fraudulent debt settlement company usually ends up taking the person’s money and disappearing. In most cases, they disappear without taking any steps towards settling the individual’s debt.

If you know you need help getting out of debt, but you aren’t sure where to turn for help, contact the law office of Kenneth C. Rannick P.C. We can help you determine the best options in your situation. You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists . We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process so you can get a fresh financial start.

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Why Are Bankruptcy Filers Required to Complete Credit Counseling?

Tue, 05 May 2020 09:20:00 GMT

Did you know that every bankruptcy petitioner is required to complete a credit counseling course before they file bankruptcy ? They are required to complete two credit counseling classes – one before filing and one before they receive their discharge of debt. For many consumers, bankruptcy is the last resort after savage struggles against the impossible nature of overwhelming debt. The decision to file bankruptcy is not made lightly. It does not come without consequences, as the bankruptcy stays on your record for years to come (and it is not seen as a positive mark on the report). If you are at the point of filing and you aren’t sure why you need to complete credit counseling classes when you have already been through the wringer, or what they will require from you, consider the following information.

Filing Bankruptcy: Why Do You Have to Take Credit Counseling Classes?

When you decide to file bankruptcy, you will need to complete mandatory credit counseling. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 reformed bankruptcy law and makes both courses mandatory. The bankruptcy court will only accept credit counseling classes completed through programs approved by the Executive Office for U.S. Trustees, so work from the list of approved courses provided by your bankruptcy attorney or the bankruptcy court. The Executive Office for U.S. Trustees is the part of the Department of Justice that oversees bankruptcy cases. The first required credit counseling class is known as pre-filing bankruptcy counseling. The second required credit counseling class is known as a pre-discharge credit counseling course.

Filing Bankruptcy: What to Expect from Required Credit Counseling Classes

Mandatory pre-filing credit counseling courses focus on a review of the current financial situation, alternatives to bankruptcy, and understanding the consequences of filing. The process of completing pre-filing credit counseling takes approximately one hour, and the price varies depending on where you take the course. Many choose to take the course through an online program. The mandatory pre-discharge credit counseling class takes closer to two hours to complete. It focuses on more in-depth finance topics (like budgeting, different products, and tools, credit scores, etc.). Petitioners can expect pre- and post-tests measuring their retention of the info offered on the various topics, including methods of re-establishing credit post-bankruptcy, and avoiding getting back into debt. Online courses are also available for pre-discharge credit counseling.

Why Are Bankruptcy Petitioners Required to Complete Credit Counseling?

Bankruptcy petitioners completing the mandatory credit counseling classes receive services from reputable agencies do so because bankruptcy law requires it to file or receive a discharge of debt. However, the intention behind the law is to prevent consumers who have better options from filing if they have not yet considered other, more appropriate choices in their circumstances, to educate bankruptcy petitioners about what it means to file bankruptcy and to ensure bankruptcy filers have the tools they need to make the most of their fresh financial start after the bankruptcy is complete.

If you have questions about the bankruptcy process, or if you need to discuss the protections offered by bankruptcy, we can help. Ask about stopping wage garnishment immediately by filing; get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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Does Religious Private School Tuition Fall Under a “Reasonable Expense” During Bankruptcy?

Fri, 01 May 2020 09:16:00 GMT

If your family is struggling with overwhelming debt and you need the protections offered by bankruptcy, don’t hesitate to get in touch with an experienced bankruptcy attorney. Don’t assume that filing bankruptcy will mean living in poverty, giving up everything except the bare minimum necessities, or pulling your kids out of school because you currently pay private school tuition. When filing bankruptcy, the bankruptcy trustee assigned to your case examines your income and your expenses to determine allowable and reasonable costs.

What are Common “Reasonable” Expenses in Bankruptcy?

How To Establish a Reasonable Expense for Bankruptcy:

The most effective method of establishing a reasonable expense during bankruptcy is to keep a record of services/items purchased regularly. Examples of regular purchases that you may want to include in a track record may be haircuts, recreational expenses, parking, dry cleaning, other grooming services, etc. A record of purchases can establish a history of spending to present to the bankruptcy court.

Is Private School Tuition Considered a Reasonable Expense?

When filing bankruptcy, the court may question private school tuition expenses; particularly if they are exorbitant. The amount the bankruptcy court will typically deem “reasonable” for private school tuition expenses is subject to adjustment every few years, so consult an experienced bankruptcy attorney if you need to consider private school tuition during a bankruptcy. However, some cases involving private school tuition that exceeds what the court would typically deem reasonable may be considered as reasonable under special circumstances or if a compelling reason exists for the expense.

What Constitutes a Compelling Circumstance For Private School Tuition Costs?

Some examples of a situation that the bankruptcy court may recognize as a compelling circumstance to justify private school tuition above the typically acceptable amount during bankruptcy include:

It’s important to note that approaching the court for an exception to what they deem a “reasonable” expense for private school tuition based on preference for the private school over other options or religious purposes is not generally enough to constitute a compelling circumstance.

Establishing the Sacrifice of Other Expenses to Support Private School Tuition in Bankruptcy:

In some bankruptcy cases, parents may present a record of expenses and past expenses, showing that they are sacrificing other reasonable or necessary expenses to cover the costs of private school tuition. For instance, maybe parents cut back on the costs of their health care, canceled their dental or vision coverage, etc. When parents sacrifice other reasonable and necessary expenses to fund private school tuition costs above what the court would typically consider reasonable, the court may recognize the tuition as justified.

There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Do I Have to Stop Making Charitable Donations During Bankruptcy?

Wed, 29 Apr 2020 09:11:00 GMT

Did you know that America is full of charitable people? It’s true. Even during recessions and times of high unemployment, approximately 80% of Americans continue giving to charities. Many people continue to struggle to make contributions to churches, groups, organizations, and causes that they believe in after losing their job or while struggling to stay afloat amid overwhelming debt. Some people may even delay turning to bankruptcy for relief because they fear filing will mean they can no longer donate. They may also be afraid that the bankruptcy trustee will have the power to force a church, group, etc. to return charitable donations made in the year before the bankruptcy.

Is There a Similar History of Donations?

It’s a shame that good people delay turning to bankruptcy for relief since bankruptcy law protects both a debtor’s right to donate and a charity’s right to retain a donation. When taking the means test to determine Chapter 7 bankruptcy eligibility , debtors can allocate as much of their income to charity as they want as long as doing so is not out of the norm for them according to their history of donations.

When Charitable Donations Are Not Acceptable to the Bankruptcy Court:

If a history of similar donations does not support the charitable donation, the bankruptcy court will recognize it as a strategy to pass the Chapter 7 means test. If filing for Chapter 13 bankruptcy, the court will watch for out of the norm charitable donations that could be a strategy to reduce the disposable monthly income and the resulting Chapter 13 monthly plan payment.

Bankruptcy Law Protects Debtors’ Rights to Make Charitable Contributions:

The Religious Liberty and Charitable Donation Clarification Act of 2006 built on another act of Congress, the Religious Liberty and Charitable Donation Act of 1998. The 2006 legislature clarified that Chapter 13 bankruptcy filers have the right to make charitable donations. Under the 1998 act, gifts up to 15% of the donor’s income in the year preceding bankruptcy were not recoverable by the bankruptcy court. Contributions over the 15% threshold could be exempt if the debtor could show the court that donations were consistent with past donations. For example, if a bankruptcy petitioner donated 18% of their income in the year preceding bankruptcy to their church, but they have done so consistently over the past five years, the bankruptcy court would not attempt to recover the donations.

If you have questions about how filing bankruptcy could affect your ability to donate, or if you are afraid the bankruptcy court may attempt to recover funds you have donated, don’t hesitate. Call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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When Should Bankruptcy Filers Start Rebuilding Credit?

Mon, 27 Apr 2020 09:14:00 GMT

What Does It Mean to Be a Subprime Borrower?

Bankruptcy filers and potential bankruptcy filers frequently hear the phrase “subprime borrower” in reference to obtaining post-bankruptcy. Subprime borrower is a phrase that refers to borrowers that lenders see as a higher credit risk. Consumers recognized as subprime borrowers typically pay higher interest rates, and higher penalties for defaults because lenders consider them a significant risk.

What Is the Immediate Effect of Bankruptcy On Your Credit Score?

Bankruptcy is a negative “mark” on a consumer credit report. Yet it also results in a discharge of debt . Since many bankruptcy filers were struggling for a time before filing, they already had a low credit score. So, it’s not uncommon for bankruptcy filers to see their credit score increase after filing due to the immediate and dramatic reduction of their debt-to-income ratio. Filing Chapter 7 also eliminates the consumer’s ability to qualify to file Chapter 7 for another eight years, which lenders can see as a positive when weighing risk factors.

Do Chapter 13 Bankruptcy Filers Have an Easier Time Obtaining Credit Post-Bankruptcy?

Chapter 13 bankruptcy filers will often see a reduction in the debt-to-income ratio that can positively affect their credit score, but the change doesn’t occur as quickly. Chapter 13 debtors are required to stick to a strict budget for the duration of their repayment plan (3-5 years), and many lenders assume (for a good reason) that they are now much more equipped to manage their finances efficiently.

How Quickly Should a Bankruptcy Filer Seek Out New Credit After Receiving a Discharge?

Bankruptcy filers should try not to borrow significant sums of money too quickly. The best idea is generally to obtain a small amount of credit and handle it carefully, making on-time payments every month to re-establish credit. Once a positive pay history has been established, the filer will have access to more favorable terms. Waiting until the credit score has increased is a good idea. If you aren’t sure when you should consider seeking out a loan post-bankruptcy, you can start with the general rule of thumb that a credit score of 650 or above should offer decent options.

Keep a Close Eye On Your Credit Rating After Bankruptcy:

After bankruptcy, consumers should keep a close watch over their credit report and their credit score. It is a good idea to obtain a copy of reports from all major credit reporting institutions annually, including Experian, TransUnion, and Equifax. Examine the reports for errors, inaccurate information, etc.

If you need to discuss filing bankruptcy or if you have questions about how bankruptcy will affect your credit, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Bankruptcy Law: When is it Too Late to Stop a Foreclosure?

Wed, 15 Apr 2020 08:03:00 GMT

When Is the Absolute Latest You Can File Bankruptcy to Stop Foreclosure?

The shortest answer is that you can file bankruptcy to fight a home foreclosure right up until the day of the sale. It’s not over until it’s over (and by over, we mean the foreclosure is complete, and the property sold).

What is the Expected Sequence of Events in a Home Foreclosure?

A typical foreclosure starts with the lender sending the borrower a notice of default. When a homeowner receives the notice of default, they still have an opportunity to repay the delinquent balance and rehabilitate the loan according to a deadline set by the lender. If the borrower does not pay the delinquent balance by the deadline, the lender proceeds with foreclosure. A foreclosure typically starts about 90 days after the last payment. After 120 days have passed, the lender is required to issue a notice of intent to sell before they sell the home at a public auction. As long as the deed is not transferred to someone else, the foreclosure can be stopped at any time, including the date of the foreclosure sale.

Declaring Bankruptcy Immediately Delays the Foreclosure Sale:

When a bankruptcy petition is filed, the court immediately issues an injunction called the automatic stay. The automatic stay prevents all further creditor collection activities, including foreclosure. For this to work, you must be able to repay the past due amount, costs of the foreclosure, and meet future mortgage payment requirements on the house. Declaring bankruptcy puts the automatic stay in place for the duration of the bankruptcy and immediately stops the sale, but it does not stop the foreclosure. It stalls the foreclosure sale.

In some cases, the creditor will request that the court lift the injunction. The court may grant the request if they can show that the homeowner has no intention of making payments on the home or that the homeowner does not have the financial ability to make the required payments. The court may lift the automatic stay, but the homeowner still bought some time.

If you are facing a home foreclosure, you have options, and we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. Please get in touch. You are in good hands with Kenneth C. Rannick P.C .

The post Bankruptcy Law: When is it Too Late to Stop a Foreclosure? appeared first on Kenneth C. Rannick, P.C. .

Filing Chapter 13 Bankruptcy to Stop a Lawsuit

Mon, 13 Apr 2020 08:00:00 GMT

Bankruptcy is Designed to Protect Consumers and Creditors:

Bankruptcy is a legal process offering consumers legal protections against overwhelming debt. For many, filing bankruptcy brings order to chaos. One way in which bankruptcy creates order and fairness is by attempting to even out the playing field for creditors. Bankruptcy protects smaller, less powerful creditors from being entirely outplayed by large, powerful creditors.

How Does Bankruptcy Offer Protection?

The bankruptcy code defines the protections of bankruptcy. One of the most potent tools bankruptcy code offers bankruptcy petitioners is the automatic stay, an injunction that takes effect as soon as a petition is filed and prevents creditor collection actions during bankruptcy. Collection activities are stopped during bankruptcy to allow the court the time to administer the case. If collection activities weren’t blocked, it would make managing the case significantly less worthwhile and, in some cases, impossible. Some aren’t sure what “collection activities” means precisely. When discussing the effects of the automatic stay and how it stops all collection activities, it refers to creditor phone calls, demand letters or emails, new filings with the court seeking payment through legal actions like foreclosure, wage garnishment, and other lawsuits.

How Does Bankruptcy Affect Different Types of Lawsuits?

Collection of a Debt: Creditors that file lawsuits to collect a debt expect the court to enter a judgment in its favor to settle any questions about liability and the amount owed. Once the creditor receives a judgment, the law provides them with additional collection powers, including seizing bank accounts, wage garnishment, etc. Judgments can also act as a lien against any real estate in the name of the borrower. Debt collection lawsuits are in the jurisdiction of the bankruptcy court, so the automatic stay stops this type of lawsuit immediately. A “Suggestion of Bankruptcy” is filed in the collection suit telling the judge that a bankruptcy case is pending. All activity stops (at least until the bankruptcy court enters a discharge). In most cases, the state court will dismiss the case once the debtor receives a discharge in bankruptcy court .

Judicial Foreclosure Actions: Georgia is a non-judicial foreclosure state and Tennessee has the option for non-judicial foreclosure, so real estate foreclosures faced by Georgia and Tennessee homeowners do not require the lender to file a lawsuit, but if a filer happens to be dealing with a judicial foreclosure in Tennessee, lenders must obtain permission from the court to foreclose on a property. And filing a bankruptcy case stops the judicial foreclosure. For more information about when and how bankruptcy can help you avoid foreclosure in Georgia and Tennessee, contact an experienced bankruptcy attorney.

Child Custody, Divorce, or Other Domestic Actions: Many family law related lawsuits are not stayed or postponed by a bankruptcy filing. Family court judges may put a case on hold if they feel it is best – this frequently called a “comfort order.” Bankruptcy court generally has little interest in domestic relations or family matters and does not interfere with marriage dissolutions, parental rights, etc.

Spousal Support and Child Support Actions: While the bankruptcy court doesn’t interfere with divorce or custody, the family court’s imposition of child support or spousal support orders can affect a bankruptcy case. An order requiring this type of financial responsibility on the part of the petitioner can have a significant effect on their resources. Bankruptcy courts may reserve jurisdiction over a property settlement to avoid severe depletion of a debtor’s resources in favor of a single creditor (in this scenario, the bankruptcy court considers the soon to be ex-spouse as one of the petitioner’s creditors seeking payment). Yet bankruptcy courts rarely get involved unless a property settlement is far outside the realm of what is typical. A child support creditor (the other parent or a state agency) is subject to the automatic stay, but with a difference. Debts associated with child support are not discharged in bankruptcy. In a Chapter 13 bankruptcy, the petitioner pays off their past-due child support during their 3-5 year repayment plan. In Chapter 7 bankruptcy, the debt survives the bankruptcy and is still in place once the discharge for all eligible debt is received. Once the discharge is entered, the child support creditor can resume collection activities.

Code Enforcement & Nuisance Actions: Often related to enforcing building or construction codes, this type of lawsuit is typically allowed to proceed.

Evictions: If a lawsuit seeks eviction of a petitioner, special rules apply depending on the state of residence and the timing of the lawsuit and the bankruptcy filing. If the court has not yet issued the writ of possession, the automatic stay will stop an eviction. There is an exception if the property is endangered or illegal drug use is occurring on the property.

Criminal Cases: The bankruptcy court and bankruptcy’s automatic stay do not interfere with criminal cases involving murder or robbery, but cases involving money or property (such as bad checks or fees, etc.) may be affected. Generally speaking, if the lawsuit’s goal is reimbursement to the government for financial losses, the case is subject to bankruptcy’s automatic stay. For example, a highway toll case would be affected by the automatic stay, but a case involving a string of bad checks (even though it may involve financial restitution) focuses mainly on punishing someone for breaking the law, so it is not affected by the automatic stay.

Administrative Actions: Whether or not administrative actions are affected by bankruptcy’s automatic stay is determined on a case-by-case basis. Some administrative actions are primarily monetary, while others are primarily focused on police powers.

Lawsuit Filed by the Petitioner Against Another Party: Typically, the automatic stay does not prevent a debtor from filing suit against a third party as the automatic stay is in place to protect the debtor and the debtor’s property. This may lead to countersuits that could potentially be affected by the automatic stay, and filing suit against a third party during bankruptcy may not be beneficial in the long term.

If you are buried in debt and facing a lawsuit, we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. to help you determine your best options. We help good people through bad times every day, and we can help you, too.

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Chapter 7 Bankruptcy: How to Surrender an Underwater House

Thu, 09 Apr 2020 08:57:00 GMT

How to Surrender Your House in Chapter 7 Bankruptcy:

When you put collateral up to secure a loan (a car, a home, or other property), you are required to either pay the debt as agreed or release ownership of the property designated as collateral. The collateral property is surrendered to the lender when secured debt goes unpaid. During Chapter 7 bankruptcy, petitioners wishing to surrender their house tell the lender and the court using the appropriate bankruptcy form ( Statement of Intention for Individuals Filing Under Chapter 7). The proper form needs to be submitted to the court within 30 days of the bankruptcy petition date or before the meeting of the creditors (if the meeting is scheduled within 30 days of filing).

What Does It Mean to Surrender Your House?

When a bankruptcy petitioner has secured debt, they have three options. They can surrender the property associated with the secured debt, they can redeem the debt, or they can reaffirm the collateralized property. Redeeming the debt means paying the value in a lump sum. Reaffirming means entering a new contract for the property to keep it after bankruptcy. Those who do not wish to keep their house (or other property) can surrender the property or give it back to the creditor. During Chapter 7 bankruptcy, surrendering property means giving the property back to the lender voluntarily or of your own accord. The borrower is not responsible for any deficiency amount still owed on the loan once the creditor sells the property.

What Is the Definition of Secured Property?

Any property used as collateral for a debt or loan is referred to as secured property. If a borrower stops paying on a secured loan, the creditor has the right to take the “secured” property and sell it to pay toward the balance of the debt. For example, a mortgaged home is “secured” property, and financed vehicles are “secured” property. Other types of property that are frequently used to secure debt include jewelry, household appliances, electronics, etc. that are financed at purchase.

Why Do Creditors Prefer Secured Debt?

Creditors prefer secured debt to unsecured debt. When dealing with secured debt, the creditor has two methods of obtaining payment. The lender can hold the borrower personally liable for the full balance of the loan. If the borrower does not pay, the lender can turn to their second method of obtaining a payment – selling the secured property and using the proceeds of the sale to pay toward the balance owed on the debt. When the sale of the secured property does not cover the full balance of the loan, the borrower is left responsible for the remaining balance or “deficiency.” When the borrower obtains a Chapter 7 discharge , the liability (and any deficiency) is wiped out, but the secured creditor still has the right to the secured property. The borrower does not get to wipe out their auto loan debt without returning the car. Still, the lender loses the right to go after the borrower for any remaining balance left on the loan after the proceeds of selling the vehicle are applied.

When Does Surrendering Property in Chapter 7 Bankruptcy Make Sense?

Most people who voluntarily return secured property or “surrender” property, either can’t afford it or they no longer want to make the payments. In some cases, the property is not worth keeping because it is worth so much less than the amount owed on the loan balance. In other cases, the petitioner places another piece of property at a higher priority, and they use their bankruptcy exemptions to protect the other property and willingly surrender others. If you aren’t sure what you should do, discuss your options with an experienced bankruptcy attorney.

If you know you need help getting out of debt, but you aren’t sure if you should surrender your property or not, contact the law office of Kenneth C. Rannick P.C. We can help you determine the best options in your situation. You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists. We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process so you can get a fresh financial start.

The post Chapter 7 Bankruptcy: How to Surrender an Underwater House appeared first on Kenneth C. Rannick, P.C. .

How to Stop a Wage Garnishment with Bankruptcy

Tue, 07 Apr 2020 08:54:00 GMT

Does Declaring Bankruptcy Help with Wage Garnishment?

Many who have their wages garnished or fear they may soon be facing wage garnishment, consider bankruptcy. But will filing bankruptcy stop wage garnishment ? Does it make a difference whether you file Chapter 7 or Chapter 13? Which type of bankruptcy is best when attempting to stop wage garnishment?

Wage Garnishment and Bankruptcy:

Did you know that approximately 7% of U.S. employees have their wages garnished? The average non-garnished American worker earns about 25% more annually than workers with garnished wages. Considering this, it’s not surprising that people often turn to bankruptcy, hoping to stop wage garnishments by discharging debt or reorganizing debt. Bankruptcy is a possible solution for wage garnishment, but it is not an easy solution or a fix-all.

Does Bankruptcy Stop All Wage Garnishments?

No, bankruptcy does not stop all wage garnishments. Some debts are not dischargeable through Chapter 7 bankruptcy. Some examples of non-dischargeable debt include child support, student loan debt, and some taxes. So declaring Chapter 7 bankruptcy doesn’t stop wage garnishments related to these types of debt. However, Chapter 13 bankruptcy, can help in these situations. The purpose of a Chapter 13 repayment plan is to pay off debts as much as possible throughout a pre-determined payment plan (typically lasting 3-5 years). Garnishments stop as long as Chapter 13 bankruptcy filers comply with their Chapter 13 repayment plan. This does not necessarily mean that the wage garnishment doesn’t exist, but the court may order that the wage garnishment fulfills the repayment plan.

When and How Does Wage Garnishment Stop After Filing Bankruptcy?

After the bankruptcy petition is filed with the court, the automatic stay is issued immediately, including a notification to the petitioner’s employer to stop garnishing wages and letting the creditor know they will no longer be receiving the wage garnishment payments. Remember that the automatic stay is only valid for creditors listed in your list of creditors, and, when filing Chapter 7, debts associated with the creditor must be eligible for discharge. Since the automatic stay is issued automatically upon filing a compliant bankruptcy petition with the court, the petitioner should see all eligible garnishments removed from their next paycheck. In some cases, it can be helpful to let your employer and the creditor associated with the wage garnishment know it is happening beforehand so avoid any potential delays that could occur due to them not receiving the notice from the court. In some cases, a creditor may respond to a bankruptcy filing by filing a request to have the automatic stay lifted, or if the petitioner has filed multiple bankruptcies, the court may allow the wage garnishment to continue.

If you have questions about stopping wage garnishment , or if you need to discuss the protections offered by bankruptcy, we can help. Ask about stopping wage garnishment immediately by filing; get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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3 Benefits of Bankruptcy’s Automatic Stay

Fri, 03 Apr 2020 08:51:00 GMT

What is the Automatic Stay that Goes Into Effect During Bankruptcy?

If you’re wondering exactly what an automatic stay is, you aren’t alone. Legally speaking, it is an injunction that goes into effect as soon as a bankruptcy petition is filed. The automatic stay injunction prevents a bankruptcy petitioner’s creditors from moving forward with any debt collections or debt collection related proceedings once the bankruptcy is filed. According to bankruptcy code, the automatic stay is in effect as soon as the bankruptcy petition is filed.

1st Benefit of Bankruptcy’s Automatic Stay: No More Collections

Bankruptcy’s automatic stay puts an immediate stop to all collections and collections processes; any action a creditor might otherwise take to attempt to recoup the money they are owed. Once the automatic stay of bankruptcy is in place, collection activities are prohibited by the bankruptcy court. For instance, collectors are not allowed to call you to ask for payment or file for wage garnishment. Since the automatic stay goes into effect as soon as the bankruptcy petition is filed, delaying filing is typically not beneficial.

2nd Benefit of Bankruptcy’s Automatic Stay: Protection from Certain Financial Repercussions of Debt

The automatic stay doesn’t protect you from everything, but it offers some essential protections that are much appreciated by many bankruptcy petitioners. For instance, when the automatic stay goes into effect, utility disconnections like water, electric, or gas may be blocked for up to 20 days. The automatic stay stops wage garnishments. And collections for overpayment of public benefits may be stopped temporarily. It is important to note that there are exceptions to the protections offered by the automatic stay like judgments for past-due child support or IRS debt proceedings.

3rd Benefit of Bankruptcy’s Automatic Stay: Protect the Filer Against Losing their Home

The automatic stay can temporarily halt the foreclosure process. Additionally, landlords may not be able to evict you (unless the eviction process is already in process on the date of the bankruptcy filing).

How to Make the Automatic Stay Work for You:

If you filed bankruptcy and creditors continue to pursue you even though they are prohibited from doing so by the automatic stay, contact an experienced bankruptcy attorney for guidance. It is appropriate to immediately advise any creditor who contacts you after filing your bankruptcy and your case number. Once they have been advised that you have filed bankruptcy, they should immediately cease contact. If they continue, they can be fined.

There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post 3 Benefits of Bankruptcy’s Automatic Stay appeared first on Kenneth C. Rannick, P.C. .

Can Chapter 13 Bankruptcy Help Resolve IRS Debt?

Wed, 01 Apr 2020 17:51:00 GMT

Why Isn’t IRS Debt Automatically Included in a Bankruptcy Discharge?

Tax debt is considered a priority debt during bankruptcy. As a priority debt, tax debt is paid first when assets are liquidated (in a Chapter 7 bankruptcy) and included and paid in full in a Chapter 13 payment plan. Chapter 13 bankruptcy is based on a court-approved payment plan that allows the debtor to reorganize their debt and pay off as much as possible during a 3-5 year repayment plan (determined by the court in advance). The goal of Chapter 13 is to pay off creditors in full by completing the repayment plan as agreed, but remaining unpaid balances may be discharged once the plan is complete. As a priority debt, tax debt would be paid before other debts during the Chapter 13 repayment plan. Priority tax debts are not dischargeable in Chapter 13 bankruptcy.

Also of note: While a bankruptcy petitioner in a Chapter 13 bankruptcy is eligible to receive a tax refund during their bankruptcy, the return would most likely be rerouted to cover tax debt.

Can IRS Debt Be Discharged Through Any Type of Bankruptcy?

In minimal cases, tax debt may be dischargeable under Chapter 7 bankruptcy if the petitioner’s situation meets five criteria:

Bankruptcy law is very clear about laying out the exact criteria regarding how old a tax debt must be before it may be eligible for discharge. All the requirements must be met for the IRS debt to be eligible. Applying the exact criteria to each year’s tax debt could mean that some unpaid balances are dischargeable while others are not.

Are There Other Rules and Qualifications Regarding Discharge Eligibility for IRS Debt?

Bankruptcy petitioners are also required to prove that their past four years of tax returns have been properly filed before receiving their bankruptcy discharge. The past four years of tax returns have to be filed before the date of the petitioner’s first creditors meeting for the current bankruptcy case. The petitioner is also responsible for providing a copy of their most recent tax return to the trustee. Creditors are allowed to request a copy as well, and if a request is made, the petitioner must provide an additional copy to the creditor.

Do You Have More Questions About IRS Debt and Bankruptcy?

If you have questions about how filing bankruptcy could help with IRS tax debt, or if you need help getting out of debt, don’t hesitate. Call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post Can Chapter 13 Bankruptcy Help Resolve IRS Debt? appeared first on Kenneth C. Rannick, P.C. .

Common Signs That You May Need to Discuss Filing Bankruptcy

Thu, 26 Mar 2020 09:32:00 GMT

Filing for Chapter 7 Discharge Means Wiping the Slate Clean:

The Chapter 7 bankruptcy ends with a discharge of all debt not exempt under bankruptcy law. It wipes the slate clean and provides the petitioner with a new start. It is also recorded on the bankruptcy petitioner’s credit report for ten years. While bankruptcy is designed as a last resort, in some cases, filing is the best response.

Common Signs that You May Need to Consider Bankruptcy:

You’re Missing Payments: If you consistently miss minimum payments or regularly scheduled payments (like utilities or the water bill, etc.), you may need to take a closer look at your finances and reevaluate how you’re handling them. If there is not enough money available to cover your costs of living and debt repayment, you may need to talk to an experienced bankruptcy attorney.

You Don’t Qualify for a Debt Management Plan: If you attempted to work with your creditors or an outside company to qualify for a hardship plan or debt management plan, and you didn’t qualify, you may need to discuss your options with an experienced bankruptcy attorney.

You’ve Already Taken Out Additional Debt to “Consolidate” – and it Didn’t Work: If you attempted to solve the problem by taking out a home equity loan, personal loan, or other loan to pay off the problem debt, and you ended up maxing out your cards again, you may need to discuss your situation with a local bankruptcy attorney.

You’ve Stopped Answering Your Phone & Don’t Open Your Mail: If creditors are contacting you for payment regularly and you have stopped responding, you should discuss the situation with a bankruptcy attorney. Immediately after filing, the automatic stay goes into effect prohibiting all collection action.

You’ve Spent Your Savings: If you tapped into your savings or your retirement account to make ends meet or to help maintain your debt, you might benefit from looking into the protections offered by bankruptcy.

You’re Using Your Credit Cards More: If you find yourself depending on your credit cards more and more to make ends meet each month, you should consider discussing your options with a bankruptcy attorney.

You’re Using Loans to Pay Bills: If you are using credit cards or loans to pay your bills, you should talk to your bankruptcy attorney about how to obtain a discharge of debt.

You’re Behind on Your Mortgage Payment or Rent: If you are behind on your housing payment, or you fear foreclosure or eviction, please get in touch with an experienced bankruptcy attorney to discuss how bankruptcy could protect you.

Your Credit Cards Are Maxed Out: If you are juggling maxed out credit cards and limited funds to pay more than the minimum payment, you should discuss the situation with a bankruptcy attorney.

Filing bankruptcy is a big decision and not one that you should make lightly. In a lot of situations, hard work, budgeting, and patience can go a long way toward getting out of debt. Still, in more extreme cases, robust legal protections may be necessary. If your finances have spiraled out of control, get in touch with an experienced bankruptcy attorney to weigh the pros and cons of filing bankruptcy so you can make sure it’s your best choice.

If you need to discuss filing bankruptcy or if you have questions about how bankruptcy can help you, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Common Signs That You May Need to Discuss Filing Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

IRA Protections: Federal Law Protects Retirement Accounts During Bankruptcy

Tue, 24 Mar 2020 09:30:00 GMT

ERISA and Non-ERISA Qualified Plans:

Bankruptcy law provides different types of protections for retirement accounts, depending on whether the account is an ERISA (Employment Retirement Income Security Act) qualified plan or a non-ERISA plan. ERISA qualified plans are established by the employer, adhere to specific IRS guidelines, and are tax exempt. IRAs (Individual Retirement Accounts) are the most common type of non-ERISA plan, but all non-ERISA plans are included under BAPCPA’s umbrella of protection. If you aren’t sure if your retirement account is an ERISA-qualified plan or a non-ERISA plan, ask your employer.

You Don’t Have to Worry About ERISA-Qualified Plans During Bankruptcy:

The United States Supreme Court ruled that ERISA-qualified retirement plans are not property included in bankruptcy and cannot be taken by the bankruptcy trustee to pay creditors. Therefore, you don’t need to worry about your ERISA-qualified plan during Chapter 7 bankruptcy. Some common types of ERISA-qualified plans include 401(k)s, 403(b) or profit-sharing plans, 457(b) deferred compensation plans, governmental plans, and tax-exempt organizational plans.

Another Advantage of ERISA-Qualified Retirement Plans:

ERISA-Qualified retirement plans offer another significant advantage. They are protected up to the cap determined by federal law. Any assets that fall within the cap, cannot be lost during bankruptcy. This is important not only to those filing bankruptcy now, but to individuals considering tapping their retirement accounts to pay off debt that is eligible for bankruptcy discharge. It’s relatively common for consumers to consider accessing retirement funds to pay off debt to avoid declaring bankruptcy, yet doing so should be considered only as a last resort. It is best to step into a fresh financial start after bankruptcy with retirement funds still in place.

What About Non-ERISA Qualified Plans?

Non-ERISA retirement accounts also enjoy protections offered by federal bankruptcy law. Common types of non-ERISA qualified plans include IRAs, Roth IRAs, SEP-IRAs (for owners of small businesses), Simple IRAs (for the self-employed), and similarly structured retirement plans.

What Protections Are Offered Traditional and Roth IRAs?

Unlike ERISA plans, traditional and Roth IRA protections are capped at $1,362,800 if the case is filed after April 1, 2019, and before March 31, 2022. The cap applies to multiple accounts, so if you have more than one traditional or Roth IRA, only $1,362,800 of the combined total can be protected (the protected amount is not per account). Any amount between the accounts that surpasses the cap is available to the bankruptcy trustee when repaying creditors. The federal cap is adjusted for inflation every three years with the next adjustment scheduled for April 1, 2022.

When Do Federal Protections for Retirement Accounts Not Apply?

In some instances, the federal protections for retirement account balances do not apply. For example, once money is withdrawn from a retirement plan, it is no longer protected by the federal exemption. The IRS may also be able to access retirement assets if there is a valid tax lien against you. Divorcing spouses may also gain access to retirement accounts in certain situations.

Do you have questions about bankruptcy law and retirement accounts? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

The post IRA Protections: Federal Law Protects Retirement Accounts During Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Does Filing Bankruptcy Pose a Risk to My Career?

Fri, 20 Mar 2020 09:26:00 GMT

Can I Get Fired Because I Filed Bankruptcy?

Your employer cannot fire you because you filed for bankruptcy . Bankruptcy code is federal law, and it contains most laws affecting any bankruptcy case across the nation. One provision explicitly prohibits discrimination in a variety of situations, including employment. Once hired, your employer (private or government) is not allowed to discriminate against you because you file bankruptcy. The bankruptcy cannot serve as the sole reason for a firing, demotion, reprimand, or disciplinary action.

Are There Employment Situations in Which My Bankruptcy Would be a Factor on the Job?

In right-to-work states, an employer can fire a worker for any reason (or no reason). So sometimes the issue isn’t whether or not the employer’s action was discriminatory, it’s whether or not you can prove that the employer’s action was taken as a direct response to the bankruptcy. Additionally, while bankruptcy code prohibits employers from discriminating in the workplace due to bankruptcy, there is nothing preventing employers from basing employment decisions on other factors in your credit history.

For example, if you work in the finance industries, your employer could decide that a history of late payments, settled accounts, repossessions, and charged off balances if of particular interest since your job leaves you responsible for handling company funds or client funds. In this type of situation, your employer would be unable to use the bankruptcy as a means of taking action against you in the workplace, but entirely free to base adverse employment decisions on other elements of your credit history.

Can A Bankruptcy Petitioner be Denied a Job Because They Filed Bankruptcy?

Yes. While bankruptcy code explicitly prohibits government employers from denying employment based on bankruptcy, the section addressing private employers does not include this wording. In Section 525(a), the section addressing government employment, discrimination is prohibited in virtually every aspect of government-employee relations. According to Section 525 (a), the government cannot “deny employment to, terminate the employment of, or discriminate with respect to employment against” a person who filed bankruptcy. (11. USC. § 525(a).) Private employers are addressed separately in Section 525(b), but the phrase “deny employment to” is not included. Multiple courts have considered the issue, but most have held that Congress intentionally left the phrase out. Therefore, bankruptcy code does not prevent private employers from using bankruptcy as the reason to deny employment.

Does Bankruptcy Put My Professional License in Jeopardy?

If you are a licensed professional such as a doctor, cosmetologist, lawyer, pharmacist, insurance agent, etc., you know that to qualify for your license, you were required to submit background checks and often a credit check. Bankruptcy code protects you against discrimination based on bankruptcy when applying for your license, but most professionals subject to licensing boards for renewal may be required to meet specific standards, including moral or character-based requirements. Therefore, financial matters considered “neglectful” may be seen as a factor considered by the licensing board during renewal.

Does Bankruptcy Mean Losing Security Clearance?

Filing bankruptcy does not disqualify you from a security clearance; it can actually enhance your chances of qualifying. In most cases, security clearances issued to government employees or government contractors are investigated by the DOD (Department of Defense). The investigation includes many areas of your life, including financial health (which is of particular interest). The DOD considers individuals in a precarious financial situation vulnerable, more likely to be susceptible to blackmail, and more likely to make unwise decisions or break the law to obtain money.

Debt, Bankruptcy, and Debt Protection:

Dealing with significant debt can be a considerable burden, especially when the rumor mills get going. Hopefully, you can take comfort in the fact that bankruptcy is a legal process, provided to the American people by way of the Constitution. It offers people just like you protection from debt. It is not a punishment.

If you are filing personal bankruptcy and you are worried about how it could affect your job or your career, please don’t listen to rumors. Instead, get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Does Filing Bankruptcy Pose a Risk to My Career? appeared first on Kenneth C. Rannick, P.C. .

Credit Card Use and Bankruptcy: Is There a Good Way to Use Credit Cards?

Wed, 18 Mar 2020 09:24:00 GMT

Credit Cards Can be Convenient and Secure Payment Methods:

When used correctly, credit cards are quite convenient. They provide a secure payment alternative to cash and debit for everyday expenses. Many credit cards come with fraud or purchase protection so, unlike cash, if your credit card is lost or stolen, it can be replaced without significant financial loss. They can help you: a) build credit (necessary in this day and age), b) earn rewards (many credit cards come with advantageous rewards programs based on account longevity, and amounts purchased), or c) finance necessary purchases over months that would have caused financial strain if paid in one lump sum. The only problem is that unless you are incredibly cautious, credit cards will lead to high-interest charges, growing debt, and negative marks on your credit report.

How to Use Your Credit Card While Avoiding Unnecessary Debt:

How to Use Your Credit Card Without Negatively Impacting Your Credit:

Since so many families come to us burdened by overwhelming credit card debt and looking for relief through bankruptcy, it can be tempting to blame credit cards. Yet there are benefits available through credit cards – they require careful handling.

If you have questions about discharging credit card debt or want to discuss filing bankruptcy , please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Credit Card Use and Bankruptcy: Is There a Good Way to Use Credit Cards? appeared first on Kenneth C. Rannick, P.C. .

The Danger of Making Minimum Payments or Taking Out Payday Loans

Mon, 16 Mar 2020 09:21:00 GMT

What is the Debt Cycle?

A debt cycle is a continuous cycle of borrowing that generates more debt, more costs (associated with the debt), and eventual default on the debt. Spending more than you make means going into debt, and eventually, the interest associated with debt becomes a significant monthly expense increasing debt even more. Eventually, some in the debt cycle will decide to take action by taking out loans to pay off the debt or even just to make minimum payments that are past due. Sometimes obtaining a loan to pay off debt can be useful. In some cases, debt consolidation makes sense if it enables the borrower to spend less money on interest and simplify their finances. Still, when the loan is a means of “keeping up” on payments or funding continued expenditures, additional loans will only add to the problem.

Are You In Debt?

If you want to get out of the debt cycle, you must acknowledge that you are in over your head. You have too much debt. Don’t bother with recriminations or guilt; what’s done is done. But to take action, you have to acknowledge where you are and start planning with a realistic view of your situation.

But I’m Okay If I Can Make All My Minimum Monthly Payments, Right?

If you can afford to make all of your minimum monthly payments, you may think you’re fine. However, you are already in the debt cycle. By staying in debt, you are trapping yourself in the current lifestyle. The need to maintain that debt will be a massive limitation as you move through life. Changing careers, quitting your job to care for family, moving, and eventually retiring all become next to impossible as long as the need to maintain the debt continues. While making minimum monthly payments keeps you “current,” it does not pay off your debt; it merely keeps it there as your constant companion.

Minimum Payments Aren’t the Only Danger: Payday Loans

While making minimum payments creates the opportunity for you to have debt as your constant companion for the rest of your life, payday loans create the opportunity for your card table to be ripped out from underneath your house of cards. Payday loans offer instant relief from a pressing need for cash, but most aren’t able to get out from under them. They stick around demanding all the available funds and making it nearly impossible to see your way clear of debt.

Once You Recognize Your Debt Cycle, Start Working on Solutions:

Once you recognize the need to get out of the debt cycle, you can start working on solutions. You may be able to get clear by actively understanding your finances, identifying your income, and controlling your expenditures. Try creating a spending plan to you know how much discretionary cash there is to spend each month (and don’t spend more than you have). Hide your credit cards, so you aren’t tempted to pull them out when you know you’re out of cash in your checking account. Changing your habits little by little can go a long way towards ending the debt cycle for good.

What If Changing My Habits Isn’t Enough to Get Free of Debt?

In some cases, recognizing that you are in a debt cycle and changing your habits to reflect your income isn’t enough to get free of debt. Regardless of why you’re in a debt cycle, now that you’re there, you don’t have enough available funds to pay your bills each month. If this is the case, you may need a more powerful solution.

Ask Your Tennessee and Georgia Bankruptcy Attorney About Filing:

If you have questions about discharging your debt through bankruptcy , please get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. You are in good hands with Kenneth C. Rannick P.C.

The post The Danger of Making Minimum Payments or Taking Out Payday Loans appeared first on Kenneth C. Rannick, P.C. .

Why Are More Millenials Seeking Debt Relief Through Bankruptcy?

Thu, 12 Mar 2020 09:17:00 GMT

Why Are So Many Millenials Buried in Debt?

Older generations regularly toss around jokes about “millennials.” People falling into this generational definition tend to be the butt of jokes about poor lifestyle choices, being outrageously spoiled, and simply choosing not to grow up as they age. Due to these stereotypes, many upon hearing that the number of millennials declaring bankruptcy is on the rise will immediately scoff and blame their poor lifestyle choices, spoiled nature, irresponsible actions, etc. However, the truth is that many millennials that are buried in debt can easily trace their path down the road to financial struggle back to the rippling effect of student loan debt.

The student loan debt held by millennials is significantly larger than the typical student loan debt held by older generations. Additionally, most millennials entered the workforce after the Great Recession hit. At the time they were leaving school and looking for a “grown-up” job, the jobs offering a livable wage proportionate to the millennial’s education (and student loan debt balance) were rare.

Many quickly found themselves facing the harsh reality of living paycheck to paycheck, having no money left over to put into savings, and learning how easy it is to obtain credit cards. More than 50% of millennials who hold student loan debt are anxious about their inability to pay the debt. Many turned to credit cards (usually with high-interest rates), auto title loans, payday loans, or rent-to-own financing to make ends meet.

How Can Bankruptcy Help Millenials with Overwhelming Student Loan Debt?

Bankruptcy cannot wipe out federal student loan debt, but bankruptcy can wipe out credit card debt and other loan debt. Consumer debt can be discharged outright when filing Chapter 7 bankruptcy and managed through Chapter 13 bankruptcy . By effectively relieving millennials of their “other” debt, bankruptcy can give them a hand up out of impossible financial situations.

Are You Overwhelmed by Student Loan Debt?

If you are buried in student loan debt and need to discuss how filing for bankruptcy could change your situation, we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.

The post Why Are More Millenials Seeking Debt Relief Through Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Bankruptcy Can Often Help Relieve Emotional Stress Caused by Financial Struggles

Tue, 10 Mar 2020 09:14:00 GMT

What Are the Common Stressors Associated with Financial Struggle?

Fear of Losing the Family Home: Many families dealing with financial hardships find themselves facing foreclosure. The potential loss of a home causes extreme stress as it is both a vital necessity to provide a home for your family and profoundly emotional with many homeowners placing great sentimental value on their home.

Fear of Vehicle Repossession: During a financial struggle, many consumers fall behind on their car payments. When a car loan is past due, the lender may move quickly to repossess the vehicle securing the loan. Wondering whether or not the car will be available when it’s time to go to work or time to go home for the day or pick the kids up at school can be a weighty burden.

Inability to Pay Basic Bills: Constant worry about which bill to pay to keep the lights on, the phones active, and the water running can be wildly stressful for those during a financial struggle, especially if the situation is long-term or a part of a repeating cycle.

Limited Access to Extracurricular Funds: While not having the money for necessities is an obvious stressor, some don’t consider the additional stress that comes from having little to no access to funds necessary to engage in the usual extracurricular activities that serve as stress relief.

Harassing Phone Calls from Collectors: One of the most stressful aspects of being past due on bills or overwhelmed by debt is the eventual call from a collector that quickly turns into many calls from many collectors.

Many dealing with chronic or extreme financial struggles eventually turn to bankruptcy for relief. Filing bankruptcy is often tied to a major event (or multiple significant events) in a person’s life that create financial strain. Common “major events” frequently related to bankruptcy include divorce, job loss, illness, loss of a loved one, etc.

Call a Chattanooga Bankruptcy Attorney for Help Discharging Debt:

If you are dealing with the many stressors that come along with financial struggle and you need help, contact the law office of Kenneth C. Rannick P.C. We can help you determine if bankruptcy is a good option in your situation and review Chapter 7 and Chapter 13 qualifications . You don’t have to deal with the financial struggle alone. Bankruptcy can be an overwhelming process, but at the law offices of Kenneth C. Rannick P.C., you’ll work with Consumer Bankruptcy Specialists. We help relieve the stress, ensure all bankruptcy paperwork is appropriately filed, and work to expedite the bankruptcy process so you can get a fresh financial start.

The post Bankruptcy Can Often Help Relieve Emotional Stress Caused by Financial Struggles appeared first on Kenneth C. Rannick, P.C. .

What To Do When a Debt Collector Calls You?

Fri, 06 Mar 2020 09:11:00 GMT

When a Debt Collector Calls, Make Sure You Have Time to Talk:

If you receive a call from a debt collector, you need to have enough time to write down a few notes about the collector, the account, the debt, etc. If you don’t have time (or the ability) to do this when you receive the call, tell them you can’t talk at the moment and request that they call back at another time when you would be available to speak. Even if all you want to accomplish is to stop the collector from calling, you should request a call back when you have time to talk since, to stop the calls, you would need their name and mailing address to send a cease and desist letter.

Have a Pen and Paper Ready During the Call:

When on a call, debt collectors take notes. It would be best if you took notes while on the call, too. Any records you create will be convenient if you ever face the debt collector in court or if you need to discuss something that came up on a previous phone call. Try to include the time and date of the call, name of the individual on the phone, collection company name and address, amount of the debt referred to, original creditor’s name, and any other details discussed.

Request Additional Information About the Debt:

Let the collector know that you need more information. Try to keep it simple. Let them know you don’t recall the debt they are referring to and you will need them to send you more information about the debt. Or advise them you don’t believe you owe the debt and you need more information about it. In order to send additional info, the collector will need to verify your mailing address. Do not say anything to the debt collector that implies you are liable for the debt.

Don’t Accept Responsibility for the Debt Over the Phone:

You should consider a call from a debt collector to be a type of interrogation. You’re “innocent” of the debt until you’re proven guilty. Before making any payments, or agreeing to make any future payments, you should always verify: 1) the debt, 2) that you are responsible for the debt, and 3) that the debt collector is legally able to collect the debt. Some “debt collectors” makeup debts or collect on debts they have no legal right to collect. The simplest way to obtain proof that the debt is yours, and that the collector can collect on it is to write a letter requesting that the collector send proof that the debt being referenced is your debt.

If you are receiving excessive calls from collectors because you are buried in debt or if you need to discuss the protections offered by bankruptcy, we can help. Stop collection calls immediately by filing; get in touch with Kenneth C. Rannick P.C., Tennessee and Georgia bankruptcy attorney as soon as possible.

The post What To Do When a Debt Collector Calls You? appeared first on Kenneth C. Rannick, P.C. .

Why Personal Loans Are Not Usually a Great Answer for Debt Relief

Wed, 04 Mar 2020 08:07:00 GMT

Consumers like them because they are not limited like many other forms of lending: mortgages are for houses, auto loans are for vehicle purchases, etc. The personal loan can be used for any number of purposes. Yet this is one of the main problems – just because you can use a personal loan for almost anything doesn’t mean that doing so is a good idea.

For many, consolidating high-interest credit card debt with a personal loan is not a good idea.

Many Consumers Find Themselves Trapped in a Debt Cycle:

Consumers who take out a personal loan to consolidate their debt often forget that they still have their same old debt. It’s just in a new package. A significant number of consumers wipe out their credit card debt by taking out a personal loan to pay off their balances only to slowly, but surely, start charging on their credit cards again. In the end, they end up with their new personal loan balance and new balances on their credit cards. It’s a debt cycle that leaves consumers facing twice as much debt.

Don’t They Have Great Interest Rates?

While personal loans are not typically attached to outrageous interest rates or terms (like payday loans, for instance), they are also not the most efficient way to borrow money. If a borrower has good credit, they will most likely be able to get a better interest rate on a home equity loan than on a personal loan. If you are considering taking out a personal loan, take into consideration that the interest rate advertised is generally the “best” rate available. Still, it’s only available to those who qualify (so borrowers with outstanding credit).

Do Personal Loans Have “Other” Fees?

Many personal loans come with “other” fees. The most common is the origination fee of 1 to 6% of the initial loan balance. The origination fees cover the costs of processing the loan, and the amount is rolled into the loan balance or taken out of the amount the lender disburses. Additionally, for those concerned about the long term financial benefits or consequences associated with a personal loan, you could be penalized for paying the balance off early. Some consumers also run into trouble with personal loans because the monthly payment amount is fixed. If the consumer is used to dealing with varying payment amounts based on balances on credit cards and having as much time as necessary to pay off the full balance, they could find the fixed payment amount to be a struggle.

Personal loans can be the right solution depending on the individual and their financial situation, but for many, repositioning debt is not helpful. For others, it is actually damaging. If you are overwhelmed by debt and need debt relief , you may want to consider filing for bankruptcy to get a discharge of debt.

There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee and Georgia bankruptcy attorney. We help good people through bad times.

The post Why Personal Loans Are Not Usually a Great Answer for Debt Relief appeared first on Kenneth C. Rannick, P.C. .

Is Finding Debt Relief One of Your 2020 New Year’s Resolutions?

Mon, 02 Mar 2020 09:03:00 GMT

If you are hoping to find debt relief in 2020, consider these suggestions. They could help you end up one of the lucky ones that accomplish their New Year’s resolution before the next year rolls around.

If you have a 2020 New Year’s Goal to Find Debt Relief, start with these tips:

If you have a significant amount of consumer debt that you can’t seem to get under control, it could be because you have to continue making your student loan payment each month. Consider contacting the lender to see if there are any available programs or temporary payment options that would enable you to have a lower payment temporarily while you paid down other debt. If the situation is too far out of control for a short-term reprieve to be helpful, you may need to consider the potential benefits of filing bankruptcy to obtain a debt discharge of consumer debt, medical debt, etc. The student loans are not discharged, but many can handle the student loan debt once the rest of their debt is discharged, and they are no longer liable.

If you have questions about how filing bankruptcy could help in your situation, or if you need help getting out of debt, don’t hesitate to call Kenneth C. Rannick P.C., Tennessee and Georgia bankruptcy attorney . We help good people through bad times.

The post Is Finding Debt Relief One of Your 2020 New Year’s Resolutions? appeared first on Kenneth C. Rannick, P.C. .

The Dangers of Cosigning on a Debt

Thu, 27 Feb 2020 09:20:00 GMT

What is a Cosigner?

As a cosigner, you apply for a loan with someone else and legally agree to pay off the debt associated with the loan if they do not make the payments. The most common reason someone will need a cosigner is because they can’t get approved on their own due to either a low credit score, a lack of income, or existing debt. Cosigners are often friends or family members of the borrower who has a steady income and a solid credit score. Lenders are also more likely to offer favorable terms when a loan has a cosigner (i.e., lower fees or lower interest rates).

Why Do Lenders Require Cosigners?

While agreeing to cosigning feels a lot like helping out someone you love or respect, it also comes with a lot of risks. The other person’s actions could negatively affect you. If you step back and think about it, if the lender thought the borrower was capable or likely to follow through on the terms of the loan and make their payments, they wouldn’t require them to have a cosigner. Lenders make their decisions based on decades of data to pinpoint the likelihood that a borrower will pay back a loan. If they aren’t willing to bet on the borrower, you probably shouldn’t either.

Before You Decide to Cosign, Consider This:

Being a Cosigner is High Risk and Low Reward – Cosigning means all the responsibility to pay for a car or a home without actually living in the house or driving the car. Cosigners may see a slight benefit to the credit score if payments are made on time, but if the lender recognized them as an appropriate cosigner, they probably don’t need the slight improvement to their score the cosigned loan could create. Cosigners get all the risk if the loan is not repaid, but very little reward.

Lenders Go After Cosigners First: If problems arise and the loan is not paid as agreed, lenders tend to go after the cosigner first for payment. You may find yourself facing a lawsuit for nonpayment.

Cosigning Puts Relationships at Risk: Cosigning puts a strain on otherwise healthy relationships. The cosigner may feel it necessary to pressure the borrower to make their payments on time, the borrower may feel indebted to the cosigner, if the borrower doesn’t make payments on time, the cosigner could hold them responsible for the damage to their credit score, etc.

You May Be Unable to Obtain a Loan of Your Own: By agreeing to be a cosigner, you may find yourself unable to get approved for a loan of your own when the time comes that you want to make a purchase of your own.

If you are considering cosigning on a debt, make sure to consider the potential consequences. If you need to discuss how a cosigned loan is handled during a bankruptcy or if you need to file bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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5 Common Reasons Bankruptcy Cases Are Dismissed

Tue, 25 Feb 2020 09:18:00 GMT

Reasons a Bankruptcy Case May Be Dismissed:

Do you have questions about filing bankruptcy , or bankruptcy law? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

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How To Determine Your Household Size for the Bankruptcy Means Test

Fri, 21 Feb 2020 09:09:00 GMT

What is Included in the Chapter 7 Means Test?

The Chapter 7 means test can seem confusing, but it can be broken down into two main sections/forms: the statement of current monthly income and the means test calculation. In the first form, information focuses on marital and filing status, and monthly income in comparison to the state’s median income. The second form focuses on calculating disposable income based on income and expenses.

Why is Household Size So Important?

One of the most important calculations included in the means test is the household size. If the household size is incorrect, it can mean the difference between passing and failing. And since passing and failing in regards to the Chapter 7 means test is the equivalent of qualifying to file Chapter 7 and not qualifying to file Chapter 7, it’s fair to say that this is a vital calculation. The means test compares your average household income during the six months prior to filing bankruptcy with the median income of a same-size household in your state. If your income falls below the median, you pass the means test with no further information required. Since the state median income increases as the household gets bigger, you can have a higher income and still pass the means test if your household is big enough to keep you below the state median.

When income falls above the state median, potential filers must complete the rest of the means test form to determine eligibility.

Calculating Your Household Size for the Chapter 7 Means Test:

Bankruptcy law does not actually define a “household.” Since there is no official definition of household for bankruptcy, courts may hold differing opinions on who can count towards “household size.” Some of the common methods used by courts to determine household size include:

“Heads-on-Beds” Approach – following the Census Bureau’s definition of a household, the heads-on-beds approach includes anyone living in the house. Most courts feel this definition is too broad because it doesn’t consider financial contributions or relationships. Few courts adhere to this standard since it holds the potential to drastically inflate household size.

Income Tax Dependent Approach – Some courts allow debtors to count anyone they claim as dependents on their tax return. This is the most restrictive approach, but as such is the most universally accepted by courts.

Economic Unit Approach – Some courts use the economic unit approach to determine household size. This approach looks at how many people in the household behave as a single economic unit – meaning a unit that is financially supported by the debtor or whose finances are closely intermingled with the debtor’s.

If you are filing personal bankruptcy and you are worried about how to calculate household size, please don’t hesitate to get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Can a Second Mortgage Company Foreclose On My House?

Wed, 19 Feb 2020 09:04:00 GMT

Why Would a Second Mortgage Company Foreclose On Your Home ?

If you have a second mortgage loan in place, the lender has the right to foreclose on the house. When a loan is “secured” using collateral (in the case of a mortgage or second mortgage, the collateral used is the house) the collateral is on the line if the loan becomes past due. The lender forecloses with the intention to sell the property in order to recoup what they are owed.

Why Would a Second Mortgage Company Not Foreclose on Your Home?

When a foreclosed home is sold by a lender, there are expenses that must be paid from the proceeds. The sale of the home will come with real estate fees, taxes, etc. All associated fees from the sale of the home must be paid before any money can be paid towards mortgages. Once expenses are covered, the mortgages are paid off in priority order: first mortgage, then second, etc. Until the first mortgage balance is paid in full, the second mortgage lender receives nothing. In some cases, the second mortgage company may voluntarily choose not to foreclose on your home because there may not be enough left for them after the sale of the home.

Second Mortgage Lenders Are More Likely to Negotiate:

Due to the nature of the foreclosure process and the fact that they are less likely to get full payment, second mortgage lenders are far more likely to negotiate and work with borrowers. They may be willing to arrange a payment plan. If you are behind on your second mortgage, be sure to communicate with them about your situation. They may be able to assist you. The lender is less likely to negotiate or offer helpful options if you have a track record of late payments or poor credit history.

If you have questions about avoiding a second mortgage foreclosure or want to discuss filing bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Can I Still Collect Rent If I’m Surrendering Properties in a Bankruptcy?

Tue, 11 Feb 2020 08:58:00 GMT

Can a Bankruptcy Petitioner Still Collect Rent on Surrendered Properties?

Difficult situations arise constantly, and many rental property owners find themselves facing a difficult decision: to file bankruptcy or not to file bankruptcy. If you are considering this particular choice, you should probably hear the details about rent collection on surrendered properties before you make your final decision. When you file bankruptcy, you surrender the extra properties (rental properties) and the mortgages that come along with the properties. When you surrender a property, you surrender your interests and rights in the property, so you no longer have the right to collect rent.

If rent is received during the bankruptcy proceedings, the bankruptcy trustee will define them as unprotected funds. The unprotected funds will be directed to go to your creditors. Additionally, tenants of surrendered properties are informed when a property they are renting is surrendered in bankruptcy. Tenants who are aware of their rights and bankruptcy law, may feel responsible for reporting it if a petitioner attempts to collect rent on a surrendered property during bankruptcy.

What To Do If You Own Rental Property & You Are Declaring Bankruptcy:

If you are a rental property owner and you are declaring bankruptcy, stop collecting rent when you decide to file. The tenants in the home, if they would like to stay, will instead pay rent to the bankruptcy trustee for the duration of the case. By handling the transition in this way, you will avoid any situation that could negatively affect your bankruptcy case.

If you are a rental property owner and you need to discuss filing for bankruptcy , we can help. Trust the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.

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What is a 2004 Examination in Bankruptcy?

Mon, 10 Feb 2020 09:01:00 GMT

The Beginning: The Schedules and the Meeting of the Creditors

The petitioner is responsible for providing a lot of information to the bankruptcy court, their Trustee, and their creditors. In the required schedules and statements, the petitioner lists debts, assets, income, expenses, and financial details (particularly any financial transactions that occurred in the two years prior to the bankruptcy filing). In some cases, financial transactions will need to be listed in detail for up to six years preceding the filing. All the information included in the schedules can have an effect on the bankruptcy case.

Every bankruptcy petitioner is also legally required to attend a proceeding called a meeting of creditors or a Section 341 meeting, even though very few creditors ever actually appear at the meeting. In almost all cases, the meeting of creditors is actually used by the Trustee to take the testimony of the debtor. The meeting of the creditors is generally short, and straightforward with the Trustee simply requesting that the debtor verify information from their own bankruptcy petition. In rare instances, if more information is needed and the Trustee needs more time, the meeting of the creditors may be adjourned to another date for additional testimony, or documentation.

When the Bankruptcy Trustee Wants More Information:

The schedules, statements and meeting of the creditors are fairly comprehensive and the vast majority of cases need no additional info. However, in cases where they don’t quite capture all the information the Trustee or a creditor needs to move forward, the Trustee may contact the filer directly. Since bankruptcy filers are obligated to cooperate with the court throughout the process, an informal question or two is not wildly abnormal. The Trustee may simply get in touch to request a copy of a tax return or a deed. In cases where something more formal is necessary, a Rule 2004 Exam may be requested.

What is a Rule 2004 Exam?

Rule 2004 provides the option to examine anyone who may have knowledge regarding the debtor’s finances, schedules, plans, property, reorganization plans, ability to pay, etc. The scope is so broad that many see Rule 2004 as a fishing expedition – a chance to seek out anything that may be used to trip up the debtor without any real idea what may be there to find. Since Rule 2004 is so easily misused, filing a motion requesting one can lead to a fight with the court attempting to determine the relevance of the request and what information will be sought.

Who Can Request a Rule 2004 Exam?

Anyone with a legitimate interest in the bankruptcy case can file a motion requesting the court order a Rule 2004 Exam. Interested parties could include: the debtor, the debtor’s spouse, the debtor’s creditors, owners, shareholders, bondholders, or anyone else directly affected by the bankruptcy. The court has the ability to order anyone or any group to submit to a Rule 2004 Exam if they have knowledge of the debtor’s property or finances.

If you have questions about the Rule 2004 Exam or if you need to file bankruptcy , please get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. You are in good hands with Kenneth C. Rannick P.C.

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Do I Need to List My Business Assets in My Personal Bankruptcy?

Wed, 05 Feb 2020 09:54:00 GMT

Filing personal bankruptcy can take a toll on businesses owned by the petitioner. How much the personal bankruptcy affects the business depends on the legal structure of the business and the type of bankruptcy petition that is filed with the bankruptcy court. There are two types of bankruptcy filings for individuals: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy & Your Business Assets:

Chapter 7 is the most common type of bankruptcy filing. Chapter 7 is often referred to as a liquidation bankruptcy because the court-appointed Trustee oversees the liquidation of the filer’s non-exempt assets to satisfy debt claims. During a Chapter 7 bankruptcy, the petitioner’s business could be considered an asset to be liquidated.

Chapter 13 Bankruptcy & Your Business Assets:

Chapter 13 bankruptcy is the second type of bankruptcy filing. Chapter 13 is often referred to as a reorganization bankruptcy. In a Chapter 13 bankruptcy, the petitioner’s creditors agree with the bankruptcy trustee on settlement or repayment plans that take into consideration the petitioner’s assets, debts, and sources of income. Sole proprietors or individuals owning shares in a corporation can file a personal Chapter 13 bankruptcy and list property interest in schedule B to exempt the equity/property interest they have in the corporation.

In a Chapter 13 bankruptcy, the court mandates a strict repayment plan with accompanying personal living budget. The filer must agree to abide by the repayment plan and budget and they may be in place for several years. Business ownership assets could be affected since some portion of the funds for debt repayment are likely to come from the business.

How Your Business is Structured Could Affect Bankruptcy Outcome:

Small businesses generally have one of three legal organizations: sole proprietorship, an LLC (limited liability corporation), or a corporation.

Sole Proprietorship: When a business is operating as a sole proprietorship, the law does recognize a distinction between the owner and the business. The court will generally regard the business as just another personal asset to be liquidated.

LLCs or Corporations: LLCs and corporations are legally recognized as separate entities, so if an individual with corporate interests in these types of entities declares bankruptcy, only the bankruptcy filer’s portion of the business is affected. The business continues to operate, and the petitioner’s equity in the business becomes an asset in the bankruptcy.

If you are a business owner considering bankruptcy and you need to discuss the pros and cons, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff . Our office is the only one in the Chattanooga area with two! You are in good hands with Kenneth C. Rannick P.C.

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Can a Homeowner’s Association Foreclose on My House?

Mon, 03 Feb 2020 08:50:00 GMT

Can the HOA Really Foreclose on My Home?

Many residents find the idea of their HOA foreclosing on their home to be astounding. HOA fees are typically nowhere near the value of an entire property. They just can’t wrap their mind around the thought that the HOA could take their house. Yet it is a possibility. If your HOA has threatened foreclosure, don’t disregard the threat entirely. Learn the facts. Ask questions. Seek out legal advice.

How Does an HOA Foreclose on Your Home?

Your HOA may be allowed to foreclose on your home if you fail to make your HOA payments as agreed. An HOA can file a claim of lien if a resident fails to pay their assessed fees. Depending on state law, the HOA may also file a claim for unpaid fines due to non-compliance with the association’s governing documents. The “lien” takes a legal claim for money that is owed and asserts it against the property. The HOA can assert their claim for unpaid fees against both the resident individually and the resident’s property.

The HOA Foreclosure Process:

The HOA’s claim on the property is recorded with the county land records, which means the general public is considered to have “constructive notice” or notice that the property is subject to a debt. When a property is “subject to a debt,” any refinance, sale or transfer of the property is first made subject to the claim against the property.

The lien effectively enables the HOA to sell your property to pay the past due fees. The lien also acts as a cloud on the property’s title that blocks you, as the resident/owner, from selling or refinancing your home without satisfying the debt.

How Easy Is It For an HOA to Foreclose?

In the state of Tennessee, an HOA can foreclose on a property as soon as the lien is attached. HOAs can exercise judicial foreclosures or, if permitted by the HOA’s declaration documents, they may exercise a non-judicial foreclosure. Some feel that the ease with which an HOA can foreclose lends itself to potential abuse.

If you are hoping to avoid an HOA foreclosure by filing bankruptcy or you have questions about bankruptcy, we can help. Don’t waste time, get in touch with Kenneth C. Rannick P.C., Tennessee and Georgia bankruptcy attorney as soon as possible.

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How To Determine Jewelry Value During Bankruptcy

Thu, 30 Jan 2020 09:47:00 GMT

Listing Property During Bankruptcy:

Filing bankruptcy is a legal process with specific requirements. Bankruptcy petitioners will notice when they begin going through the process with their attorney that they are required to list all their personal property in the paperwork. When referring to bankruptcy, “personal property” refers to all assets you may own, including houses, vehicles, cash, checking and savings accounts, furniture, clothing, jewelry, etc. Each asset will need to have a value listed. Determining the value of an asset is sometimes simple, but in some cases, depending on the asset, the purchase history, etc. the bankruptcy petitioner may find themselves at a loss as to how to come up with a valid value for the bankruptcy court.

What is the Value of Property During Bankruptcy?

In most cases, bankruptcy petitioners can use tax value for their home, NADA value for their cars, Goodwill Store pricing/values for furniture, household goods, and clothing. But for jewelry, the process is a little different. It’s not normal to find fine jewelry at a garage sale or yard sale. So providing a “value” for the court based on yard sale or garage sale pricing doesn’t work. So how should a bankruptcy petitioner find an acceptable “value” for their rings, necklaces, bracelets, wedding bands, watches, etc.?

Types of “Value” to Assign to Fine Jewelry:

When it comes to assigning a value to fine jewelry there are several different “values” to consider working with and the trick is determining which is most appropriate for your piece.

For the purposes of bankruptcy, the bankruptcy code requires us to use the replacement value meaning the price a reseller of used jewelry would charge for property of that kind, considering the age and condition of the jewelry at the time is is appraised. In other words, we look at pawn shop retail pricing. We have a local jeweler who does appraisals for us at no charge or a very nominal fee, if needed.

There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Don’t hesitate to call Kenneth C. Rannick P.C. , T ennessee and Georgia bankruptcy attorney . We help good people through bad times.

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Financial Hardship Can Happen to Anyone: Coping with Financial Loss

Tue, 28 Jan 2020 15:45:00 GMT

Responses to Financial Loss Often Include:

Coping with Financial Loss Is Difficult – It’s Best to Proactively Avoid Disaster

It sounds simple: avoid debt. If you aren’t in debt currently, avoid it like the plague. If you are in debt, don’t wait for an outside trigger event to accept that there could be a problem. If you continue forward in denial without curbing the increase of debt until you receive a denial of credit, a foreclosure notice, an insistent call from a debt collector…you’ve denied your situation too long. Don’t live in denial – be aware of your situation and make changes for the better.

Are You Struggling to Deal with Massive Stress Due to Financial Difficulty?

The opposite of living in denial, many find themselves struggling to take any action at all because they are paralyzed by extreme stress about their situation. According to countless studies, debt and stress are almost inseparable. An American Psychology Association study stated that 72% of Americans said they felt stressed about money. Regardless of how stress shows itself in your life, it can have a profound effect on your life. You could see its presence reflected in every aspect of your life. For some, stress can even escalate to levels of intense fear or panic. With a past due notice resulting in a racing heart, shortness of breath and a headache.

Have You Heard of Debt-Anger Syndrome?

In medical circles, Debt-Anger Syndrome refers to the rise of anger issues following a recession or economic downturn. Instead of being afraid, panicking or denying the situation, some victims of overwhelming debt get angry. They are angry at the creditors who send them bills, they are angry at the mailman for delivering the bills, they are angry at their employer for not paying them more, they are angry at their significant other for not making more money, they are angry at their kids for needing things that cost money, and they are angry at themselves for being in such an impossible financial situation. They are angry at life in general – and it all leads back to not having enough money to pay the bills and sustain their lifestyle.

Sometimes Depression Affects People in Response to Impossible Financial Situations:

People struggling with debt are twice as likely to suffer from depression. The situation can seem hopeless, and self-esteem can hit a new low. Some seek a respite from the depression by shopping or treating themselves to a “well-deserved getaway,” but this usually just leads to more debt.

Coping with the Many Consequences of Financial Loss:

The good news about debt and the all-inclusive repercussions is that the solution is simple: get out of debt. Reduce your expenses, increase your monthly payments to creditors, reduce interest rates and pay bills by the due date. For some, this is a plausible plan in and of itself. For others, it is not. If you are ready to deal with your debt, but you don’t think you can dig your way out of the financial hole on your own, filing bankruptcy could be the answer you seek.

If you need to file bankruptcy or you have questions about how filing bankruptcy could help in your situation, don’t hesitate to call Kenneth C. Rannick P.C ., Tennessee and Georgia bankruptcy attorney. We help good people through bad times.

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Can Filing Bankruptcy Eliminate Tax Debt?

Thu, 09 Jan 2020 09:37:00 GMT

No matter which type of bankruptcy you file , some debts are exempt from bankruptcy discharge. You can discharge unsecured debt like credit card debt, medical bills, personal loans, etc. Other debt like student loans, child support arrears, past due alimony, legal fines, etc. cannot typically be discharged.

What About Tax Debt? Can Tax Debt Be Discharged by Bankruptcy ?

Laws related to bankruptcy and taxes are complicated (from both directions). So it’s important that bankruptcy filers interested in learning more about how the bankruptcy court will handle their tax debt understand the details before they file. It’s also helpful to know how bankruptcy can affect your taxes during and after filing.

While some debts are never dischargeable, the rules for other types of debt (like tax debt) aren’t as black and white. Here are a few black and white, unarguable facts about tax debt and bankruptcy:

For tax debt to be dischargeable, three elements must be satisfied:

It’s always best to consult with an experienced local bankruptcy attorney before making any decisions about filing bankruptcy.

Do you have questions about filing bankruptcy, or about bankruptcy’s potential effect on your tax debt? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

The post Can Filing Bankruptcy Eliminate Tax Debt? appeared first on Kenneth C. Rannick, P.C. .

How Chapter 13 Bankruptcy Affects Business Owners

Mon, 06 Jan 2020 09:33:00 GMT

Do Bankruptcy Filers Who Own a Business Have to Close Their Business?

Business owners filing a Chapter 7 personal bankruptcy may need to shut down their business. Still, if the company is an LLC or corporation with additional owners, you may not need to close down shop even if you are personally liable for a large portion of the company’s debt.

Sole Proprietorship:

If you are the owner of a sole proprietorship, the bankruptcy trustee may require that you close the business when filing a personal Chapter 7 bankruptcy. They may need time to assess the value of the company, determine a likely sale price of any business assets in the bankruptcy estate, etc. This type of assessment generally takes at least two months. Requiring that you close the business also prevents you from incurring any additional liabilities during the bankruptcy case (regular business debts, potential legal claims against your business, etc.) Companies that operate with little to no assets like consultants, service providers, freelancers, etc. may be allowed to remain open during bankruptcy, especially if the risk of running up debt or liability is minimal. Although, even a small service business may be shut down by the trustee if they feel there are significant accounts receivable with the potential for collection. For example, a small real estate business with commissions that have not yet paid out will likely become part of the bankruptcy estate as will other proceeds the company generates while bankruptcy is in process.

Partnerships and Multimember LLCs:

If you are an owner in a business partnership or a multimember LLC, your share of the business will be part of your bankruptcy estate. However, unless you are a majority owner, most states prohibit the bankruptcy trustee from interfering with the business or taking any business assets. The possibility exists that the trustee could obtain a “charging order” against your interest in the company. The charging order acts as a lien against business interest that allows the trustee to receive any profit distributions you would generally receive as the owner of the interest. If the business does not regularly distribute profits to owners/members, it doesn’t do the trustee much good. The bankruptcy trustee could assign or sell the economic rights in your ownership interest to someone else, but they typically can’t transfer or sell your share of the partnership or LLC.

If you are a partner or member of an LLC, you might have signed a buy-sell agreement that requires termination of your ownership interest before filing bankruptcy. If this provision is in place and you violate it, you could risk facing a lawsuit from the co-owners. To assess the risks associated with this particular situation, consult an experienced small business attorney.

Corporations and Single-Member LLCs:

If you are the sole or majority owner of a corporation or LLC, your bankruptcy trustee can take over your shares or membership interest. The trustee can then vote to sell or liquidate the business and distribute the proceeds to the business’s creditors. Trustees generally take a cost/benefit approach when deciding to dissolve and liquidate. If the company has a moderate amount of debt and several valuable, nonexempt assets, the bankruptcy trustee is likely to dissolve the corporation or LLC to sell the assets.

Your personal bankruptcy may or may not affect your business if you own a viable corporation with other members. A business owner sharing equal ownership with other shareholders may file personal bankruptcy without bringing consequences down on the corporation, but it depends on the details.

The trustee has the right to vote shares in the corporation but won’t generally be able to force a dissolution unless the owner filing bankruptcy is the majority shareholder. The stock of the owner filing will still be part of the bankruptcy estate, but it doesn’t typically carry much value to the trustee unless one of the co-owners indicates they want to buy it.

If you own a business and you need information about how filing personal bankruptcy could affect your business, please don’t hesitate to get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Bankruptcy and Retirement Accounts

Thu, 02 Jan 2020 08:11:00 GMT

If You File Bankruptcy Before You Retire:

If you file Chapter 7 bankruptcy before you retire and retirement funds are still in your retirement accounts (i.e., 401(k), 403(b), 457(b), Keogh, etc.), the funds cannot be touched by creditors. No matter how much money you have saved for retirement, they will not be used to pay creditors.

The money in the above-listed types of accounts will also not affect the amount the bankruptcy is required to pay back after filing Chapter 13 bankruptcy. Chapter 13 bankruptcy is more complicated than the more common Chapter 7 bankruptcy because it requires that the court works with the filer to set up a repayment plan.

Funds saved in IRA, Roth IRA, SEP-IRA, or SIMPLE IRA accounts are also usually exempt from creditors up to a certain amount. The limit for exemption is set at $1,362,800 (for combined IRA balances). This limit is valid through April 2022 as the amount is adjusted every three years to accommodate changes in the cost of living.

If You file Bankruptcy After You Retire:

If you are already retired and you are filing bankruptcy , you are probably taking income from your retirement accounts. The money taken as income from your retirement accounts is accessible to creditors listed in the bankruptcy. The main issue to be considered will be how much income is necessary for you to cover your living expenses. Retired individuals filing Chapter 7 bankruptcy should be aware that any amount above what they need to support their basic needs is considered disposable income and will be made available to creditors. Retired individuals who file Chapter 13 bankruptcy should expect the income they pull from their retirement account or plans to be included when the court determines how much debt they are capable of repaying.

Considering Social Security Benefits and Debt:

When it comes to Social Security benefits, there are some special considerations. Most debtors cannot be garnished (exceptions can be made for the payment of federal taxes, other federal debts including student loans, child support, alimony, court-ordered restitution owed to a victim of a crime, etc.) Social Security benefits have partial protection from creditors due to their status as a federal benefit. Once the money is in your bank account, it can be taken by creditors, but a rule established in 2011 requires that banks identify accounts that include funds from federal benefits and must protect two months’ worth of benefits from creditors seizing funds.

If you are considering filing for bankruptcy and you need to discuss the pros and cons of filing, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Main Differences Between Chapter 7 and Chapter 13 Bankruptcy

Tue, 31 Dec 2019 09:16:00 GMT

In Chapter 7 bankruptcy (or liquidation bankruptcy), most of the filer’s property is sold and used to pay towards their debts. This type of bankruptcy is designed for individuals with limited incomes and no reasonable ability to pay back their debt.

In Chapter 13 bankruptcy (or reorganization bankruptcy), the filer’s property is not sold unless it’s part of a strategy. If the bankruptcy filer completes their court-approved repayment plan, they get the benefits of the plan and they may keep their property. The court-approved repayment plan pays the filer’s creditors a portion of the outstanding debt over a pre-determined length of time (3-5 years). Unsecured debt that remains at the end of a completed Chapter 13 bankruptcy repayment plan may be discharged. When debt is discharged, the borrower is no longer required to pay back the debt.

Quick Overview of Chapter 7 and Chapter 13 and How They Differ:

Type of Bankruptcy:

Chapter 7 = liquidation

Chapter 13 = reorganization

Who Can File?

Chapter 7 – Individuals and business entities

Chapter 13 – Individuals only (including sole proprietors)

Eligibility Restrictions:

Chapter 7 – Consumer debtors must pass the means test, or explain a change of circumstances on why the means test is not giving the true financial picture. Business debtors do not take the means test.

Chapter 13 – Total debt must fall underneath “max limits” in both secured and unsecured categories

How Long Does it Take to Receive a Discharge?

Chapter 7 – In most cases, 3-5 months

Chapter 13 – Generally 3-5 years (upon completion of the repayment plan)

What Happens to Property in Bankruptcy?

Chapter 7 – Trustee may sell any nonexempt property to pay towards debt. In most cases, the trustee does not find anything worth selling which would make a material impact to creditors.

Chapter 13 – Filers keep their property, but must pay unsecured creditors an amount equal to what the unsecured creditors would receive in a hypothetical Chapter 7 case (ask your lawyer).

Does it Allow the Removal of Unsecured Junior Liens from Real Property through Lien Stripping?

Chapter 7 – No

Chapter 13 – Yes (if the requirements are met)

Does it Allow Reducing the Principal Loan Balance on Secured Debts Through a Loan Cramdown?

Chapter 7 – No

Chapter 13 – Yes (if requirements are met)

What Benefits Does it Offer?

Chapter 7 – Debtors can quickly discharge most debts to get a fresh start

Chapter 13 – Debtors can keep their property and catch up on past due payments on secured loans (i.e., mortgage, vehicle, etc.) and nondischargeable priority debt payments (eg taxes and child support).

Are There Any Drawbacks?

Chapter 7 – Trustee can sell any nonexempt property to pay debts, and filers do not have a method of catching up on missed payments to keep their home or vehicle that is in danger of foreclosure or repossession. Trustee may recover from your family members money you may have paid to family and close friends.

Chapter 13 – Monthly payments are required for three to five years, and filers may have to pay back a portion of general unsecured debts.

If you have questions about the difference between Chapter 7 and Chapter 13 or if you are considering filing bankruptcy, please get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two. You are in good hands with Kenneth C. Rannick P.C.

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5 Reasons to File Chapter 7 Bankruptcy Immediately

Fri, 27 Dec 2019 09:14:00 GMT

When to File Now:

If you are in any of the following situations, you may want to meet with a local bankruptcy attorney to discuss filing right away.

Your Mortgage Lender is Foreclosing on Your Home:

If your home is in foreclosure, you can stop the process by filing bankruptcy. Once you file bankruptcy, the automatic stay stops lenders and creditors from taking any actions to collect (and this includes foreclosure proceedings). If you are filing Chapter 13 bankruptcy, you will have the opportunity to catch up on your mortgage payments and stay in your home. Chapter 7 bankruptcy benefits filers by wiping out the entire mortgage debt (as long as you file before the foreclosure process is complete). By filing Chapter 7, the homeowner isn’t stuck owing the difference between the auction price the bank was able to get during foreclosure and the balance on their mortgage (the deficiency). This is excellent news because without a bankruptcy even if the lender forgives the deficiency once the foreclosure is complete, the homeowner is likely to owe taxes on the forgiven deficiency since it will be considered income. Filing bankruptcy avoids this bad tax result in a Chapter 7, and may save the house in a Chapter 13.

Your Auto Lender is Going to Repossess Your Vehicle:

The automatic stay of bankruptcy also puts a stop to any efforts your lender may take to repossess your car. When filing Chapter 13, you have the opportunity to catch up by including past due payments in the plan. Both Chapter 7 and Chapter 13 bankruptcy offer the possibility of getting your car back if it was repossessed recently. Discuss your options more thoroughly with a local Board Certified bankruptcy law specialist.

You Are Being Evicted:

If your landlord is evicting you, a bankruptcy filing will most likely stop the eviction. (But not for very long). However, if your landlord already got a judgment for possession (or, in other words, an eviction order from the court), bankruptcy cannot force your landlord to allow you to stay.

You Need to Stop a Lawsuit:

If you are being sued for breach of contract, medical debt, credit card debt, car accident damages, etc. filing bankruptcy stops the lawsuit. While bankruptcy will not stop all lawsuits such as setting your child support, it is essential to look into the possibility as it simply does not make sense to pay to defend against a lawsuit based on a debt that bankruptcy could discharge.

Your Income Is About to See a Significant Increase:

If you are about to start a higher paying job or you are expecting to inherit a property soon, you should talk to a bankruptcy attorney as quickly as possible. Your changing circumstances may change how the court will assess your ability to repay, and whether you are taking advantage of your creditors. Qualifying for Chapter 7 bankruptcy means satisfying the presumptions arising from the means test. The filer’s income is essential in determining whether or not they pass the test, enabling them to access the protections of Chapter 7 bankruptcy. With an income increase, the means test average income increases every month you wait to file. Filing bankruptcy sooner will increase your chances of having access to the benefits of Chapter 7 bankruptcy. Although even if you do pass the means test, the bankruptcy trustee will consider whether or not your income is higher than what you need to cover your monthly expenses. If it is, the trustee will likely recommend you turn to Chapter 13 bankruptcy instead. This analysis is done in our office before your case is filed. Means test challenges should never be a surprise to you.

If you are in an impossible financial situation and you aren’t sure where to turn, don’t give up. Turn to the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.

The post 5 Reasons to File Chapter 7 Bankruptcy Immediately appeared first on Kenneth C. Rannick, P.C. .

Should I Negotiate with My Creditors?

Wed, 25 Dec 2019 09:11:00 GMT

Debt settlement does not require a court filing, and it is often handled by consumers directly working with their creditors. If you are unsure, “debt settlement” refers to a deal that a borrower negotiates with a creditor to pay less than the amount owed.

Why Would a Creditor Agree to “Settle” an Account and Accept Less Than the Amount Owed?

Creditors are aware that bankruptcy is an option for many overwhelmed borrowers. If you file bankruptcy, your creditor’s ability to collect anything from you is eliminated by the automatic stay. The possibility of a bankruptcy filing is the main reason many creditors agree to accept less than the full amount owed through a debt settlement agreement.

What is Necessary for Debt Settlement?

The downside of debt settlement is, again, related to money and a lack of ready cash. If a borrower has plenty of cash lying around, they probably do not need to consider settling their debts, yet to settle your debt; creditors typically want a significant portion of the full balance paid immediately. In some cases, they will agree to a “payment agreement” that breaks the lump sum amount agreed upon into 2 or 3 smaller payments. For those seeking to escape the chains of debt, even dividing the lump sum up into a few lower payments is unreachable, particularly when they have more than one financial obligation to settle. It’s so hard to satisfy many creditors while you move his competitor to the head of the payment line ahead of others. Please do not go online to various debt settlement scams. We have many clients who have been ripped off by internet scams. The debt settlement “experts” end up being con artists and your money disappears.

It’s also important to point out that individuals who settle their debts should expect to see the amount written off through debt forgiveness as “income” when they file their taxes for the year!

If your debts are so massive that you can’t imagine repaying them, you may want to turn to an experienced bankruptcy attorney . An experienced bankruptcy attorney can help you consider both debt settlement and bankruptcy as options. They can also assist you in determining which will best suit your current situation and leave you in the best position for a healthy financial future.

If you are considering debt settlement or bankruptcy and you need to discuss the pros and cons, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in the Chattanooga area with two! You are in good hands with Kenneth C. Rannick P.C.

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Does Declaring Bankruptcy Stop Wage Garnishment?

Mon, 23 Dec 2019 09:10:00 GMT

When a worker’s wages are garnished, they frequently consider turning to bankruptcy, hoping for a solution, hoping to stop the wage garnishment using the protections of bankruptcy. A garnishment takes 25% of after tax income, less a small exemption for each dependant. This cripples most Debtor’s ability to make ends meet.

Can Declaring Bankruptcy Help Stop Wage Garnishment?

7% of U.S. workers have their wages garnished.

The average non-garnished worker earns approximately 25% more annually than those with wage garnishment.

When you consider the statistics, it’s not surprising that individuals subject to wage garnishment are searching for a way to reorganize their debt or discharge their debt to stop the wage garnishment. For individuals in this situation, bankruptcy may provide a solution. Immediately upon filing a bankruptcy petition, the automatic stay goes into effect.

The automatic stay prevents all collection and foreclosure activities, including most wage garnishments. The automatic stay usually lasts until the case is closed or the debts are discharged, unless the debtor has multiple bankruptcy filings in one year. (If you have questions about how filing more than once in one year affects bankruptcy law, contact an experienced bankruptcy attorney as soon as possible).

When DOESN’T Bankruptcy Stop Wage Garnishments?

Some debts are not dischargeable through Chapter 7 bankruptcy. Some of the debts that fall into this category include child support payments, alimony, some tax debt/payments, and student loans. Declaring Chapter 7 bankruptcy does not change or delay any requirements to pay these types of debt. However, filing bankruptcy will nonetheless stop any wage garnishments in place due to nonpayment of any of these types of debt.

Chapter 13 Bankruptcy and Wage Garnishments:

Chapter 13 bankruptcy treats wage garnishment slightly different. The goal in a Chapter 13 bankruptcy is helping Debtors to regain control of their finances over a specific time period (3 to 5 years). Garnishments stop as long as the bankruptcy petitioner complies with their Chapter 13 repayment plan .

Bankruptcy can offer relief from debilitating wage garnishment, but it can also be complicated. Before making any final decisions about bankruptcy, get in touch with Kenneth C. Rannick P.C ., Tennessee and Georgia bankruptcy attorney.

The post Does Declaring Bankruptcy Stop Wage Garnishment? appeared first on Kenneth C. Rannick, P.C. .

How to Get a Chapter 7 Debt Discharge

Thu, 19 Dec 2019 09:07:00 GMT

If you are eligible, Chapter 7 bankruptcy can offer you the relief you need from most unsecured debt. In some cases, it can even provide relief from secured debts. Find out what can and can’t be discharged by Chapter 7 bankruptcy.

Most Unsecured Debts are Dischargeable in Chapter 7 Bankruptcy:

Unsecured debts are debts or obligations that are not backed by collateral. In contrast, a secured debt is one for which you agreed to let the creditor take your property (i.e., home or car, etc.) if you did not fulfill the terms of the loan agreement.

Secured Debts MAY be Dischargeable in Chapter 7 Bankruptcy :

Any secured debt can be discharged, but the lien attached to the debt doesn’t go away. The creditor still has the right to recover the property that secured the debt as long as it is unpaid. A mortgage or car loan can be discharged, but the borrower will lose their house or vehicle. In some situations, losing the property may not be undesirable. For instance, if the filer doesn’t need or want the secured property, it can be advantageous to let the creditor take the property back.

A bankruptcy petitioner can indicate their intent to surrender property attached to a secured debt in their initial bankruptcy paperwork. The borrower won’t be responsible for returning the property to the creditor physically, but they should cooperate with the repossession. In some cases, smaller items will not be repossessed because the creditor determines they aren’t worth the expense of picking them up.

When Secured Debts Aren’t Quite “Secure:”

In other situations, loans that were designated as “secured” may not be as secure as expected. For instance, if a car dealer forgets to place a lien on the vehicle, the dealer’s unperfected lien could be avoided and the card could be seized. While this situation is possible, it is rare, and bankruptcy petitioners should not expect it to occur. Mr. Rannick was formerly counsel for a Chapter 7 Trustee. He and Ms. Whaley look carefully for problems like this to avoid them before they arise and in such a case might recommend a Chapter 13 in such an instance to protect the car.

Are There Debts Than Cannot Be Discharged?

Not all unsecured debt is dischargeable, however. Certain types of debt are impossible or hard to discharge through Chapter 7 bankruptcy. Some examples include student loans, debt incurred through fraud or false pretenses, luxury purchases, cash advances made not long before filing, divorce judgments, certain tax debt, etc. Sometimes a Chapter 13 reorganization plan can obtain better results than a Chapter 7.

There is no shame in turning to bankruptcy to seek a discharge of debt when unintended circumstances leave you struggling to provide for your family. Are you out of choices? Do you need help releasing your family from the chains of debt? Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee and Georgia bankruptcy attorney . We help good people through bad times.

The post How to Get a Chapter 7 Debt Discharge appeared first on Kenneth C. Rannick, P.C. .

Tips on Approaching the Holiday Season with a “No Debt” Mindset

Tue, 17 Dec 2019 18:39:00 GMT

Anyone involved in the financial industry, even in the smallest way, will agree on one thing: it’s easier to stay out of debt than to try to get out of debt.

During the holiday season, it’s very easy for consumers to depend on their credit cards. Yet credit cards are one of the most frustrating debts Americans face year after year. Overwhelming credit card debt is the most common reason consumers cite for filing bankruptcy. Avoid the trap of coming out of the holidays in debt by taking some tips from a few of your most experienced local bankruptcy attorneys .

Tips on a “No Debt” Mindset this Holiday Season:

Buy with Cash:

No matter what you are buying (gas, gifts, food, travel, etc.), pay cash. Paying cash helps control spending and avoid a surprisingly large credit card balance after the holiday.

Plan Your Spending:

Avoid spontaneous shopping. Plan your shopping. Scope out the sale ads and choose gifts ahead of time. Planning helps keep holiday spending in check. Try to compare any awesome “deals” you find with regular pricing to make sure it’s a good price. Too many stores lead shoppers with the best intentions astray with misleading advertising and signage that indicates “sale prices” that don’t offer any significant amount of saving.

Travel for the holiday ON the holiday:

Did you know that fewer people want to fly on holidays? You’d probably prefer not to fly on the holiday either, but you can get significant savings on flights by catching one on the big day (Christmas Day, New Year’s Eve, etc.) It can mean drastically reduced costs for holiday travel.

Use a Budget:

Holiday spending quickly gets out of hand. Try not to allow the hectic nature of other’s shopping to affect you. Create a comprehensive budget and stick to it! Set limits for each gift/recipient, set similar boundaries for any other necessary expenditures like vacations or menus, etc.

If you are buried under overwhelming debt created by holiday spending or other financial hardships, please don’t hesitate to get in touch to discuss the protections of bankruptcy. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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Waiting Until After the Holidays to File Bankruptcy Can Be Risky

Fri, 13 Dec 2019 18:29:00 GMT

Waiting to File Bankruptcy:

If you are waiting to file bankruptcy until after the holidays, we highly recommend you sit down with an experienced attorney as soon as possible. You can still decide to wait until after the holidays once you’ve gone over your situation with the attorney. But they can give you all the appropriate information and help you determine if you run any risks by waiting.

Potential Benefits to Seeing a Bankruptcy Attorney Now Instead of Waiting Until the End of the Year:

Bankruptcy is full of rules, and many of the rules apply to timing. When those rules are applied to your specific situation, some could provide you with some advantages available by filing sooner (or simply avoiding disadvantages that would come from filing later). Delaying filing in some cases could result in serious harm. Still, unless you speak with an experienced bankruptcy attorney about the scenario, you may not realize it until it’s too late.

The Means Test’s Quirky Income Timing Law:

The bankruptcy means test determines whether or not a filer is eligible to file for Chapter 7 bankruptcy. The means test is based on the income of the filer and their “means” to pay back their debt. The easiest way to pass the means test is to have an income less than the published median income for your state and family size. Potential benefits become apparent when you consider the “timing” in combination with two specific elements of the means test.

This excludes income that is received the month your case is filed. For instance, if you receive a significant bonus from your employer on December 10th, and you file before or on December 31st, that bonus will not be counted as income for your means test. Similarly, if you receive a cash gift from your parents to help you pay for Christmas gifts for your kids on December 1st, and you file before or on December 31st, that gift will not be considered income on your means test. The income considered for the means test would be from the last 6 FULL months, so if you file on December 31st, the income considered would be pulled from June through November. Since the holidays are a time of gifts and bonuses, this timing quirk can be very beneficial.

Filing Before the End of the Year:

This is just one example of the potential benefit of filing before the end of the year. Get in touch with an experienced bankruptcy lawyer to discuss your situation specifically to find out the best time for you to file bankruptcy.

If you have other questions about when to file bankruptcy or if you need help filing bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Waiting Until After the Holidays to File Bankruptcy Can Be Risky appeared first on Kenneth C. Rannick, P.C. .

Child Support and Bankruptcy

Wed, 11 Dec 2019 08:09:00 GMT

How Does Bankruptcy Affect Child Support?

Again, child support is not dischargeable in bankruptcy. As a priority debt, it is simply not eligible. This means that when you file bankruptcy and go through the bankruptcy process, and receive your discharge of debt, you are still liable for all child support payments past and future. If you were behind on your child support payments before filing for bankruptcy, you are still required to pay the full amount due. If you are overwhelmed by debt and a significant portion of the debt is child support arrears, you may benefit more from filing Chapter 13 bankruptcy rather than Chapter 7. Filing for Chapter 13 allows you to work with the bankruptcy court to come up with a repayment plan that reorganizes your debts so you can catch up on your past-due child support.

As a priority debt, child support is also given priority over other types of debt in bankruptcy. During a Chapter 7 bankruptcy, priority debt is paid before other debts if there are any funds available after the bankruptcy trustee liquidates nonexempt assets. Child support is prioritized over other priority debts, being paid first even before other types of debt that are also designated as priority debts.

In a Chapter 13 bankruptcy child support also receives special treatment. All child support payments that were past due upon filing will be paid back in full through the repayment plan unless you already have a court order from your child support court for a longer time to cure your child support arrearage. The repayment plan cannot exceed five years, so an excessive amount of past-due child support can result in a high monthly payment. In addition, the bankruptcy filer is still required to continue making their expected monthly child support maintenance payments each month throughout the bankruptcy. Before receiving a Chapter 13 bankruptcy discharge, the bankruptcy petitioner must show the court that they are current on both alimony and child support payments.

Do you have questions about filing bankruptcy, or about which type of bankruptcy would be most beneficial for you? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

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Can You Be Evicted While Declaring Bankruptcy?

Mon, 09 Dec 2019 08:07:00 GMT

Many Bankruptcy Filers Have Rental Debt:

It is relatively common for renters to owe their landlord money after they are evicted from a rental home or other property. Unlike mortgage payments, rental payments are not secured. Rent is an unsecured debt, just like any debt owed to a credit card company or medical facility. Unsecured debts are discharged in Chapter 7 bankruptcy or Chapter 13 bankruptcy after completing the agreed-upon repayment plan.

In some jurisdictions, you’ll find there are specialized courts dedicated to handling evictions and renter/landlord disputes. Some of these courts hold the authority to issue judgments against renters for specific amounts in connection to past due rent or money owed for damages. Judgments obtained concerning eviction or renter/landlord disputes may be discharged. However, the eviction itself will still be recorded on the consumer’s credit report and will show up in various background checks.

You may already be aware that not all debts are eligible for bankruptcy discharge. For example, if you purposefully caused damage to a rental property, the landlord could file a lawsuit requesting that the court make the debt exempt from discharge. Most landlords don’t go to the trouble unless the damage left the rental in need of extensive repair, and there is significant proof that the renter’s damaging actions were purposeful.

Does Bankruptcy Help If You Are Being Evicted?

If you think you may be evicted or if the action is already pending, filing bankruptcy could affect the eviction process. If there is not judgment issued, bankruptcy can stop the process temporarily. The landlord does have the right to file a motion asking the judge to lift the automatic stay so the eviction can proceed. If the judge grants the motion, the landlord can resume the eviction.

If you need information about how filing bankruptcy could help you with a pending eviction, please don’t hesitate to get in touch with our experienced bankruptcy attorneys to discuss your options. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Can You Be Evicted While Declaring Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Bankruptcy and Bad Checks

Thu, 05 Dec 2019 08:05:00 GMT

A Quick Overview of Chapter 7 Bankruptcy:

Shortly after a Chapter 7 bankruptcy filing, a bankruptcy trustee is assigned to the case. All nonexempt assets are disclosed to the trustee who handles the liquidation of assets and distribution of funds to the filer’s creditors. Any remaining debts left unpaid after the liquidation of assets are included in the bankruptcy discharge. The bankruptcy discharge removes all responsibility to pay for the bankruptcy filer. They are no longer liable for the debts.

Discharge of Bankruptcy and Returned Checks:

Sometimes consumers write checks that later bounce or are returned unpaid. These unpaid checks constitute a debt that can be discharged in a Chapter 7 bankruptcy . When an unpaid check is included in a bankruptcy case, the individual the debtor wrote the check to becomes the “creditor.” As a creditor, they can request that the bankruptcy court declare the returned check not to be discharged. If the court approves the request to designate the check debt non-dischargeable, the bankruptcy filer would still be liable for the amount after receiving their bankruptcy discharge. In most cases, the court will only approve this type of creditor request of they can prove that the bankruptcy filer intentionally wrote a bad check. In most cases, this would mean that the check was written against a closed checking account. Very, very few NSF checks meet this requirement. It is common that debtors are afraid to file bankruptcy because they have a payday loan and they gave a NSF check to the payday lender and the check has bounced. Those types of checks are not the kind of checks that create problems. The state law excludes these checks from being considered as fraudulent as NSF checks.

If you have other questions about what types of debt can be discharged in bankruptcy or you need help filing bankruptcy, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

The post Bankruptcy and Bad Checks appeared first on Kenneth C. Rannick, P.C. .

How Does Bankruptcy Affect Your Utilities?

Tue, 03 Dec 2019 08:03:00 GMT

Firstly, make sure you include past due utility bills as “debts” with your attorney. Your attorney will include any unpaid balances with different utility services and companies on your bankruptcy schedules. When filing bankruptcy, you are required to list all your debts and delinquent accounts. Some “delinquent accounts” may not seem like debts because you don’t consider the accounts as credit. They are often bills that you intend to keep paying, like your utility bill. Make sure to provide your attorney with all this information to include on your bankruptcy schedules.

Since they are included in the bankruptcy schedule, the utility company will receive an official notice of your filing and will be subject to the automatic stay of bankruptcy. This ensures they cannot terminate your utility service for non-payment.

Once you’ve filed bankruptcy , the automatic stay prohibits all collections efforts with very few exceptions. So the utility company can no longer collect on your past-due account’s bill. You will be responsible for paying new charges promptly, and the utility company will not be prohibited from terminating utility services if non-payment continues on original charges incurred after filing bankruptcy. During the bankruptcy, your old utility account is either paid by the bankruptcy trustee or discharged.

If you provided your utility company with a security deposit, they might use that security deposit and apply it towards your past due balance. They may also require that you submit a deposit after filing bankruptcy to continue receiving utility services. While utility companies are prohibited explicitly from refusing service to someone because they filed for bankruptcy, they can refuse to offer service if you refuse to provide them with a reasonable deposit after filing. If the amount of the deposit is too much, contact your attorney. They may be able to file a motion with the court to have the amount reduced.

If you have questions about how your utility bills are handled during bankruptcy or if you are considering filing bankruptcy and need to discuss the pros and cons, please get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in the Chattanooga area with two. You are in good hands with Kenneth C. Rannick P.C.

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When Should You Consult a Bankruptcy Lawyer?

Fri, 29 Nov 2019 08:01:00 GMT

When Should You Consult a Bankruptcy Attorney ?

Don’t put off talking to a bankruptcy attorney. There are rarely consequences associated with filing too early, but waiting too long to file bankruptcy can cause problems. Don’t wait until you’re panicking to avoid wage garnishment that may take effect within the next 24 hours or until you’re being served court paperwork from creditors filing suit against you in court. There’s no reason to put yourself through the undue stress of a constant uphill battle when the debt is so overwhelming that your efforts aren’t making a dent.

If you aren’t sure where to start or how to choose a lawyer, you can consider these tips.

Find a Bankruptcy Lawyer Who:

When sitting down with a bankruptcy attorney for an initial consultation, asking them the following questions will leave you with a good overview.

Do you specialize in bankruptcy? How many bankruptcy cases do you file each year? Who’s going to be handling my case? What is your fee structure? What’s included in your fee?

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Drowning in Debt and Turning to Bankruptcy for Protection

Wed, 27 Nov 2019 08:58:00 GMT

Bankruptcy offers many benefits in addition to wiping the slate clean for a fresh start. But it isn’t a free pass; there are serious issues to consider before moving forward with the decision to file.

Will Filing Bankruptcy Help in Your Situation?

Do your due diligence before moving forward to determine if declaring bankruptcy would help in your specific situation. While no one should take bankruptcy lightly, it’s often the best way to move forward and get back on your feet after debt has knocked you down. But how do you know if bankruptcy is the right choice with the best opportunity to relieve your debt?

Bankruptcy is a legal procedure used to discharge debt for consumers who either won’t be able to repay the debt or who do not have the means to repay the debt in their current situation. There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13 .

In Chapter 7 bankruptcy, nonexempt assets belonging to the filer are liquidated if there is expected to be enough proceeds to make a material distribution to creditors. The proceeds are distributed towards the debts. Filers must pass the means test before filing Chapter 7 bankruptcy. The means test is in place to make sure that the court isn’t abusing bankruptcy law when granting a discharge of debt.

Chapter 13 bankruptcy is often called the wage earner plan and is for bankruptcy filers with a steady income. In Chapter 13 bankruptcy, filers pay back all or part of their debt through a bankruptcy court-approved payment plan over three to five years.

In most cases, bankruptcy does not protect you from debts incurred after filing. All types of liability are not eligible for bankruptcy. To determine if the majority of your debt is eligible for bankruptcy discharge, discuss it in detail with a bankruptcy attorney.

Is it Worth the Negative Consequences?

Bankruptcy will hurt your credit worthiness if your borrowing opportunities are now high. It will raise your borrowing opportunities if your credit score is very low. The bankruptcy remains on your report for ten years if you file Chapter 7 and seven years if you file Chapter 13. When filing Chapter 7 bankruptcy, you may lose assets (depending on the amount of equity involved).

If you are considering filing for bankruptcy and you need to discuss the pros and cons of filing, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in the Chattanooga area with two! You are in good hands with Kenneth C. Rannick P.C.

The post Drowning in Debt and Turning to Bankruptcy for Protection appeared first on Kenneth C. Rannick, P.C. .

Vehicle Repossession and Bankruptcy

Mon, 25 Nov 2019 08:56:00 GMT

Repossession and bankruptcy are both scenarios we all hope to avoid, but at the same time, they are both situations that can happen to anyone. Regardless of how you got to the point of filing bankruptcy, the focus now needs to be the future. Bankruptcy is a legal tool designed for people just like you in impossible financial situations, an opportunity to turn things around. If you’re thinking about filing bankruptcy for all the right reasons, but you’re worried about how you’ll make things work if your car is repossessed, here’s some straight talk.

While the lender backing your auto loan is not allowed to contact you regarding payment on your debt, an auto loan is a secured loan, and the lender could seek to repossess your vehicle, but they have to obtain court approval first. The judge is likely to lift the automatic stay if the lender can show your loan agreement and evidence that shows you are behind on your car payments.

Bankruptcy does not always stop the car repossession process, but it does slow it down to give you time to renegotiate a deal for you to keep it.

If a bankruptcy petitioner wants to fight to keep their car and a lender asks the court to lift the automatic stay, they can ask. Once the motion is filed, a court date is set (typically within a 30-day time frame). Once you’re facing the court date, you’d need to be able to show proof that the lender never notified you or that you are not past due or that the lender lost your payments to prevent the action from going forward. You might also convert your case to Chapter 13 to force your lender to receive payments under a plan.

Redeeming your vehicle may be easier while filing Chapter 7 bankruptcy as it can make it so you only need to pay the “cash value” of the car. For bankruptcy filers who wish to keep their vehicle and are upside down on their car loan, this can be very helpful.

An emerging opportunity has come up. There are numerous car dealerships who specialize in making loans to people who have just gone bankrupt. We have tremendous results in people going online and getting very beautiful cars, even though they have a bankruptcy on their credit report. Of course, the purchaser must have regular income, but the fear of filing bankruptcy with no prospect of maintaining reliable transportation is not a problem at all! Contact us to see if there might be an opportunity for you.

Bankruptcy can offer freedom to individuals and families who are stuck in impossible financial tangles, but it can also be complicated. Before making any final decisions about bankruptcy, get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney.

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What is a Bankruptcy Discharge?

Thu, 21 Nov 2019 08:54:00 GMT

When Does a Bankruptcy Filer Receive a Discharge?

Bankruptcy petitioners who file Chapter 7 bankruptcy can expect to receive their discharge of debt approximately four months after the date their bankruptcy petition is filed. Chapter 13 bankruptcy filers usually receive their discharge of debt after all the payments under their bankruptcy court-approved plan have been made. Chapter 13 bankruptcy payment plans typically take 3-5 years.

What is Included in the Bankruptcy Discharge?

Debts that are eligible for discharge through bankruptcy and the amount of the debt discharged depends on what type of bankruptcy you file. In Chapter 7 bankruptcy cases, the bankruptcy trustee liquidates nonexempt assets and distributes the proceeds amongst the creditors. Most of the remaining debt is discharged. In Chapter 13 bankruptcy, filers enter a repayment plan (typically 3-5 years). Some or all of the debt is repaid during the bankruptcy court-approved payment plan. At the end of the period, if all payments were made, the remaining debt is discharged. Types of debt that are typically eligible for discharge include credit card debt, medical bills, financial obligations due to leases or contracts, personal loans, promissory notes, lawsuit judgments, etc. The discharge removes the filer’s liability for most debt, but some types of debt cannot be discharged.

What Debts are Not Eligible for Discharge?

While the majority of consumer debt is eligible for discharge, some types of liability are not eligible. Some common examples of debt that cannot be discharged include student loans, tax liens, past-due child support or alimony, debts obtained through fraudulent acts, and sometimes obligations for willful injury or wrongful death, etc. You should discuss dischargeability of debts with competent bankruptcy counsel before you file for bankruptcy.

What Happens After the Discharge of Debt ?

Once the discharge of debt is received, all debts included in the bankruptcy’s discharge are no longer enforceable. The bankruptcy filer is no longer responsible for paying the debts. Debt collectors and lenders can no longer attempt to collect payment on the discharged debt.

There is no shame in seeking a discharge of debt when unintended circumstances leave you struggling to care for your family. When you are out of choices and need help to release your family from the chains of debt, don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

The post What is a Bankruptcy Discharge? appeared first on Kenneth C. Rannick, P.C. .

Filing for Bankruptcy: What Is the Means Test?

Tue, 19 Nov 2019 09:43:00 GMT

If a bankruptcy petitioner does not qualify for Chapter 7 bankruptcy, they can choose to file Chapter 13 bankruptcy instead. In Chapter 13 bankruptcy, the filer’s debts are restructured, and petitioners agree to abide by a payment plan to pay all or a portion of their obligations off through the bankruptcy court.

Learn More About How the Means test Works:

The bankruptcy Means test has two parts. Both are designed to determine the amount of disposable income available to pay towards debt. The test is for those with mainly consumer debts (i.e., credit card debt or medical debt). When filing Chapter 13 bankruptcy, the Means test is taken into consideration when determining the monthly payment amount.

In the first part of the Means test, household income is compared to the state’s median income. Petitioners will need to gather as much info as they can about their income over the past six months. Filers who are below the median income in their state, are eligible to file for Chapter 7 bankruptcy. The vast majority of potential filers pass the first part of the means test and move on to file for Chapter 7 bankruptcy. Those who do not, move on to the second part of the means test. Social Security and Veteran’s Disability income is not counted towards current monthly income under the Means test.

In the second part of the Means test, potential petitioners gather information and documentation about their expenses over the past six months, including rent, clothing, groceries, medical costs, etc. These expenses are referred to as “allowable expenses.” The remainder of their income after “allowable expenses” are deducted becomes the specified disposable income amount that the bankruptcy court defines as available for you to pay towards your debt.

When listing “allowable expenses,” be thorough. Do not omit any items or list conflicting amounts for the same expenditure. This type of mistake could cause your case to be thrown out. Be forthright and transparent with your bankruptcy attorney. They don’t know what’s going on in your personal or financial life unless you tell them or provide them with the documentation. Once all the information is available, your bankruptcy attorney will work with you to make sure you have your expenses appropriately documented. If the second part of the Means test determines that your disposable income is low enough, you may be eligible to file for Chapter 7 bankruptcy.

If you decide to file for Chapter 13 bankruptcy, either because you are not eligible to file for Chapter 7 bankruptcy or because doing so will allow you to keep some of your assets, the second portion of the means test will be used to help determine the terms of your repayment plan.

If you need to file bankruptcy, don’t hesitate to call Kenneth C. Rannick P.C ., Tennessee, and Georgia bankruptcy attorney . We help good people through bad times.

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Don’t Be Embarrassed to Talk About Bankruptcy

Fri, 15 Nov 2019 09:13:00 GMT

Not wanting to talk about financial trouble or being embarrassed to mention the idea of bankruptcy is understandable. No one enjoys announcing that they can’t quite get control of their bills. If you are in this situation, and you have not yet sought assistance from an experienced professional, we want to reassure you of a few facts on the matter.

If you are considering taking the next step and talking to someone about how bankruptcy could apply to your financial situation, make sure that they are experienced and that they are there as your advocate. When you sit down to talk with a bankruptcy attorney, you are dealing with a professional who has seen countless situations like yours.

There is no shame in seeking a discharge of debt when unintended circumstances leave you struggling to care for your family. When you are out of choices and need help, don’t hesitate to get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney . Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with Two! We help good people through bad times every day, and we can help you, too.

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Know the Important Do’s and Don’ts of Bankruptcy

Wed, 13 Nov 2019 09:09:00 GMT

The Do’s of Bankruptcy:

The Don’ts of Bankruptcy:

If you are struggling to make your monthly payments or have to pick and choose which bills to pay each month, get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with Two! They are Ken Rannick and Lou Ann Whaley. We help good people through bad times every day, and we can help you, too.

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Will I Lose My Home If I File for Bankruptcy?

Mon, 11 Nov 2019 09:07:00 GMT

Chapter 7 Bankruptcy and Property:

When declaring Chapter 7, petitioners are essentially stating that they do not have the available disposable income to cover their debt payments and need the debt discharged. As part of the Chapter 7 bankruptcy process, petitioners may have assets seized. Seized assets are sold to pay off a portion of the debt owed to various creditors. The thought of property seizure can be terrifying, but it does not have to be a scary process. Not all property can be seized. There are specific assets (cash, home, car, etc.) that, depending on their value, are exempt from the bankruptcy. Generally speaking, assets with equity lower than the exemption amount cannot be seized. In many bankruptcy cases, Chapter 7 petitioners are able to keep their vehicles and house by filing a reaffirmation agreement confirming to the lender that they will still be liable for the loan post-bankruptcy. It’s important to keep in mind when considering a reaffirmation agreement that it means running the risk of losing the vehicle at a later time if you fall behind on payments after the bankruptcy. Your lawyer should be able to spot whether you are at risk of losing anything before you file.

Chapter 13 Bankruptcy and Property:

The Chapter 13 bankruptcy process is different. Consumers agree to a repayment plan to pay off a portion of their debt over 3-5 years. Consumers filing Chapter 13 do not lose their property unless they voluntarily choose to, and as long as they make the agreed payments, and follow the terms of their plan.

So, if you are wondering if it is possible to file bankruptcy and keep your house and your car, the answer is yes. The purpose of bankruptcy law is to provide petitioners with the clean slate they need to rebuild their life. Get in touch with an experienced attorney to discuss bankruptcy exemptions and how it applies to your specific situation.

When you are out of choices and you are overburdened by debt, don’t hesitate to get in touch with Kenneth C. Rannick P.C. , Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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How Can I Repair My Credit After Bankruptcy?

Thu, 07 Nov 2019 08:03:00 GMT

Filing for bankruptcy does not mean that your credit will forever be damaged. If you were eligible to file for bankruptcy, the chances are good that your credit score was already on the low end of the scale. Whether or not filing for bankruptcy will result in a lower credit score depends on where your credit score was when you filed. In some cases, when the credit score was already low due to the factors mentioned above, a bankruptcy filing can result in a credit score increase.

Regardless of what your credit score was when you filed or what it was immediately after filing, you can begin to restore your credit right away. The bankruptcy will remain on your credit report for ten years, but the impact of your bankruptcy fades with time. Bankruptcy filers can help decrease the harmful effects of their bankruptcy by offsetting the information with positive reports of on-time payments and careful use of secured credit.

Restoring Your Credit After Bankruptcy:

For assistance filing for bankruptcy or more information about rebuilding your credit after bankruptcy, please get in touch with the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.

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Car Repossession and Bankruptcy

Tue, 05 Nov 2019 08:00:00 GMT

The moment your attorney files your bankruptcy petition , the automatic stay goes into effect. The automatic stay forces creditors to stop all attempts to collect on the debts associated with the bankruptcy. Creditors are prohibited from calling the petitioner, moving forward with any lawsuits, conducting any repossessions, or foreclosing on or selling any of the debtor’s property in an attempt to gain compensation for a debt. The automatic stay of bankruptcy provides complete protection from creditors with very few exceptions. Creditors must seek permission from the bankruptcy court before continuing any efforts to collect.

If you are behind on your car payments, but your car has not been repossessed yet, contact a bankruptcy attorney today about filing for bankruptcy. If you wait too long to file, you may wake up one day or walk out of the grocery store one day to find your vehicle missing. If you fear your lender may be attempting to repossess your vehicle soon and you do not have the funds to bring the account up to date, filing bankruptcy could be your best option to stop repossession. Through a Chapter 13 bankruptcy , petitioners have the opportunity to catch up on their past due balance and pay off the loan during the 3-5 year repayment plan through the bankruptcy court. Most Chapter 13 payments are lower than the normal payment. Through a Chapter 7 bankruptcy, petitioners can delay the car repossession temporarily to take advantage of a few months (best case scenario) to bring the account current.

If your lender has already repossessed your vehicle, contact a bankruptcy attorney to discuss options. What options are available and whether or not bankruptcy can help you remedy the situation will depend on when the vehicle was repossessed and what type of bankruptcy you file. After a car is repossessed, you have a short amount of time (generally ten days, but this depends on state law and the lender) before the lender resells the vehicle. Once the car is sold and a third party holds the title, you usually cannot get the car back. If the lender has not yet sold the car to a third party, there is a chance to file a Chapter 13 and recover the vehicle because the automatic stay will stop the sale of the vehicle. This requires quick action, so if your vehicle has been repossessed and you want to attempt to get the vehicle back by filing for bankruptcy, contact a bankruptcy attorney as soon as possible.

Do you have questions about filing bankruptcy, or about which type of bankruptcy would stop a vehicle repossession? The experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. can help. We help good people through bad times every day, and we can help you, too.

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What Does Bankruptcy Protection Actually Mean?

Fri, 01 Nov 2019 08:57:00 GMT

What “Protection” Does Bankruptcy Offer?

The “Automatic Stay” offers immediate protection to bankruptcy filers from virtually all collections, lawsuits, garnishments, foreclosures, repossessions, judgments or other debt collection related legal proceedings. The bankruptcy court mails notice of the automatic stay order to all the bankruptcy filer’s creditors, associated lawyers and parties of interest that may be seeking payment or plan to request payment in the future on current debt. Creditors in willful violation of the automatic stay may face penalties, including Fines and Sanctions for contempt of a Federal Court Order, Punitive Damage Awards, Court Costs, and Attorneys’ Fees.

If you are struggling under an impossible burden of debt, there is hope. Get in touch with the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. today. We help good people through bad times every day, and we can help you, too.

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How Can I Stop Creditor Harassment?

Wed, 30 Oct 2019 08:54:00 GMT

The answer to this question is yes – sometimes it may seem as though a few creditors did not receive the notice of the bankruptcy filing. Collection letters may still arrive in your mailbox. You may even receive a harassing phone call or two.

Did you already file for bankruptcy and creditors are still harassing you? First, notify them that you filed for bankruptcy and offer to give them your bankruptcy case number. In almost every instance of creditor contact after a bankruptcy filing, they somehow did not receive the bankruptcy notification or the notification slipped through the cracks. Once you tell them you filed for bankruptcy and offer them the bankruptcy case number, they will almost always stop attempts to collect on the debt.

In rare situations, creditors may be purposefully contacting a debtor during the bankruptcy process. They may do so knowing the borrower filed for bankruptcy and that their actions violate the automatic stay. While creditor harassment after you filed for bankruptcy is undeniably illegal, it does happen.

If you are being harassed by creditors after you filed for bankruptcy, and you have already notified them of your bankruptcy case number, you have options.

What to Do When Creditors Harass You After You File Bankruptcy :

Are you being harassed by creditors? You don’t have to live with debt collection harassment. If you need help, get in touch with the office of Kenneth C. Rannick P.C. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff . Our office is the only office in Chattanooga with Two! We help good people through bad times every day, and we can help you, too.

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Can I Change from One Type of Bankruptcy to Another?

Mon, 28 Oct 2019 08:50:00 GMT

If you already filed bankruptcy in Tennessee or Georgia, and you suspect that you might benefit from changing to another type of bankruptcy, get in touch with your bankruptcy attorney immediately to discuss your options.

If You Filed Chapter 13, but are Unable to Complete Your Repayment Plan:

Unfortunately, some petitioners who file Chapter13 bankruptcy are unable to complete their repayment plan as agreed. During a Chapter 13 bankruptcy, petitioners have to repay specific debts in full. A couple of examples of obligations that would require full payment include child support owed and back taxes. The filer’s disposable income (as defined by the law) is paid into the repayment plan as a monthly payment.

In some cases, the monthly payment required to fulfill the terms of the Chapter 13 bankruptcy repayment plan is too large for filers to meet while still paying their other bills. Sometimes circumstances change months into the plan. For instance, the bankruptcy filer may lose their job or become disabled, etc. and experience a significant decrease in income. In this type of situation, it would be a good idea to consider whether or not converting the Chapter 13 bankruptcy case to a Chapter 7 bankruptcy case would be a good idea. Discuss the process of converting from a Chapter 13 to a Chapter 7 with your bankruptcy attorney. Sometimes folks change attorneys to convert from Chapter 13 to Chapter 7.

If You Filed Chapter 7 Bankruptcy , but Need to Convert to Chapter 13 Bankruptcy:

Most filers prefer the benefits of Chapter 7 bankruptcy because it quickly discharges all qualifying debt and does not require a repayment plan like the Chapter 13 bankruptcy, but it can sometimes be beneficial or necessary to convert from Chapter 7 bankruptcy to Chapter 13 bankruptcy. A bankruptcy petitioner may decide after filing for Chapter 7 bankruptcy that Chapter 13 is a better option. In other cases, the court may require a petitioner to convert to a Chapter 13 bankruptcy. A petitioner may decide voluntarily to convert from a Chapter 7 bankruptcy to a Chapter 13 bankruptcy for a number of reasons: due to a change in financial circumstances that occurred since they filed their bankruptcy petition, because they forgot to disclose a valuable asset, they realized they won’t be able to discharge a certain significant debt, or they realized they run the risk of losing valuable property they aren’t willing to lose if filing for Chapter 7 bankruptcy.

The court may order a bankruptcy petitioner to convert from Chapter 7 to Chapter 13 bankruptcy. When this occurs, it is usually due to a mistake on the Chapter 7 means test used to determine eligibility. Failing the Chapter 7 means test means that after analyzing the information, the court determined you can afford a reasonable monthly payment towards your debt through a repayment plan. In this situation, petitioners have the option to convert to Chapter 13 bankruptcy.

If you need to discuss converting from one type of bankruptcy to another or if you need answers about the benefits of filing different types of bankruptcy, please don’t hesitate to get in touch with the law offices of Kenneth C. Rannick P.C. Our Tennessee and Georgia Bankruptcy Lawyers have the knowledge and experience to help you get on the road to recovery.

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What is the Difference Between Secured and Unsecured Debt?

Thu, 24 Oct 2019 09:42:00 GMT

What is Secured Debt?

Secured debts are just that – they are secured by an asset of value, like a vehicle or a piece of property/real estate. The asset that secures the debt serves as collateral. Lenders place a lien on assets that guarantee a debt that provide them with the right to repossess or foreclose on the asset if the account becomes past due. If the delinquency continues to this point and the lender completes the repossession/foreclosure process, they typically sell the asset. When the price obtained by the lender is not the full price of the remaining debt, the lender may seek payment of the remaining balance or the deficiency balance.

What is Unsecured Debt?

An asset does not secure unsecured debts. When dealing with unsecured debt, lenders have no right to any collateral in connection to the account balance. If the borrower becomes delinquent, they cannot typically claim assets belonging to the borrower as compensation for the debt. What the lender can do is take other actions to obtain the money owed. The most common unsecured debt is credit card debt. Different types of unsecured debt include student loans, medical bills, payday loans, court-ordered child support, etc.

What Actions Do Lenders Take to Obtain Payment on Unpaid or Past Due Debt?

When borrowers are past due on their account payments, lenders of both types of debt may take action to obtain payment. Some lenders will hire a debt collector to urge the borrower to make a payment. Others may decide to file a lawsuit to request wage garnishment or a lien on one of the borrower’s assets until the debt is paid. Late payments and delinquent accounts are also reported by most lenders to the credit reporting agencies and negatively affect the borrower’s credit score.

If you need help managing overwhelming debt or would like to discuss the benefits of bankruptcy in your situation, please get in touch with one of the experienced Consumer Bankruptcy Specialists on staff in Kenneth C. Rannick P.C.’s Chattanooga office. We can help you weigh the pros and cons of filing for a discharge of debt depending on the type of debt you are dealing with and whether or not the majority of your debt is eligible for discharge.

The post What is the Difference Between Secured and Unsecured Debt? appeared first on Kenneth C. Rannick, P.C. .

Will Filing for Bankruptcy Harm My Credit?

Tue, 22 Oct 2019 09:38:00 GMT

Consumer credit scores are created based on five different factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit (10%). Payment history and debt together account for more than half of the information generating a consumer’s credit score. The amount a credit score falls after a petitioner files for bankruptcy depends in part on the state of their score when they filed. Filers with low credit scores may find that submitting their bankruptcy petition does not lower their credit score as much as it would if they had a high credit score. Regardless of how much change you see reflected in your credit score, the change is temporary. Filers can repair any damage done to their credit by filing bankruptcy.

Some bankruptcy petitioners may see their credit score improve after receiving a discharge of debt. Improved credit scores after bankruptcy are typically due to the change in the “amounts owed” portion of their report. Additionally, creditors cannot continue to report “late” payments on discharged accounts, which also positively affects the bankruptcy petitioner’s credit score. These comments are generalizations and your circumstances may vary your credit availability.

If you have questions about filing for bankruptcy, how bankruptcy affects your credit score or if you want to discuss you legal options in connection to the protections of bankruptcy , please get in touch with one of the experienced bankruptcy attorneys at Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

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Should You Feel Bad About Filing for Bankruptcy?

Fri, 18 Oct 2019 16:15:00 GMT

Some Christians, when facing severe financial distress, have difficulty considering bankruptcy as an appropriate option. They question the bankruptcy process’s suitability under their Christian beliefs. Does filing for bankruptcy conflict with the teachings of the Bible? Will filing for bankruptcy show a lack of faith? Is filing for bankruptcy a sin?

No one can cite biblical references regarding bankruptcy as it did not exist in biblical times, but debt and slavery existed as did debt forgiveness. When modern-day debt is insurmountable and overwhelms an individual or family to the point of inhibiting their ability to function, bankruptcy is a valid and legal option. It is not a sin to be avoided; it is a legal protection to be used by those in need. Bankruptcy is a legal process of discharging debts or making alternative arrangements for the repayment of debt when repayment is otherwise harmful to the individual or impossible to accomplish.

If you are struggling to fit bankruptcy into your faith-based belief system, you aren’t alone. In 1789, the United States Constitution provided that Congress could create bankruptcy laws. This means from the founding of our country bankruptcy was an important part of public policy. Every transaction and relationship could be impacted by bankruptcy. Bankruptcy laws were to balance the two important considerations of Justice and Mercy.

Some of the oldest mentions of “releasing” or discharging debt are found in the Bible. In Deuteronomy 15:1-2, it reads, “At the end of every seven years you shall grant a release of debts…” The practice of periodic debt forgiveness is mentioned again in the books of Nehemiah, Leviticus, and Ezekiel. Jesus referenced the Jubilee in Luke 4.

Consider the benefits of filing for bankruptcy , and you will find Christian values at the base of this legal process:

There is no shame in seeking a discharge of debt when unintended circumstances leave you struggling to care for your family. When you are out of choices and need help to release your family from chains of debt, don’t hesitate to get in touch with Kenneth C. Rannick P.C., Tennessee , and Georgia bankruptcy attorney. We help good people through bad times.

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How Long Does it Take to File for Chapter 7 Bankruptcy?

Tue, 15 Oct 2019 09:30:00 GMT

If everything goes smoothly and the depending on the size of the case, a Chapter 7 bankruptcy case can be filed within a few hours to a few days and the debts discharged in approximately 100 days. The most important part of the process is preparing the documents required by the bankruptcy court. Once your bankruptcy attorney has prepared all the necessary forms, they will file your Chapter 7 bankruptcy petition with the bankruptcy court. The court will schedule a meeting of creditors approximately a month after your bankruptcy filing date. In most cases, the petitioner will receive a letter stating that their debts have been discharged or “erased” approximately two months after the meeting of the creditors.

How Long Does it Take to File for Chapter 7 Bankruptcy? If everything goes smoothly, the case can be filed and debts discharged within three months. In some cases, it may take longer. Your Chapter 7 bankruptcy case may require over three months if you fail to mail the trustee documents that are requested or if you fail to send the correct materials. It could also take longer if you do not complete the required bankruptcy/credit counseling course. It could also be delayed due to rare instances of litigation.

What Do I Do After My Bankruptcy Is Over? Almost all petitioners will find that they immediately start to receive new credit offers once they file for bankruptcy. Most credit offers received right after bankruptcy will have low limits, high-interest rates, high annual fees, and a required deposit to “secure” the credit. Always review the “terms” of the offer carefully before deciding to sign up for a new credit card or credit account after bankruptcy. The best place for most bankruptcy petitioners to start is by requesting a secured credit card through their bank. With a secured card, you deposit a specific amount of money in the bank, and the deposit acts as collateral for the “credit” card you are issued. The secured card is the best first step in post-bankruptcy credit repair because your on-time payment history will typically report on your credit. Also, remember to check your credit report for any mistakes regularly.

There is no shame in seeking a discharge of debt when unintended circumstances leave you struggling to care for your family. When you are out of choices and need help to release your family from chains of debt, don’t hesitate to get in touch with Kenneth C. Rannick P.C. , Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

The post How Long Does it Take to File for Chapter 7 Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Increasing Numbers of Seniors are Turning to Bankruptcy Protection

Wed, 09 Oct 2019 09:18:00 GMT

We call it the “golden years,” but for many their retirement years are not quite as shiny as they expected. In recent years a lot more seniors are filing for bankruptcy . According to researchers from four U.S. universities, 1 in 7 people who filed for bankruptcy is 65 or older. This data indicates almost five times as many retirees are filing bankruptcy in comparison to 25 years ago.

The study concluded that there were specific societal trends and changes that were causing a drastic increase in the senior bankruptcy filings:

Seniors themselves cited their reasons for filing with the top four reasons for filing bankruptcy as a senior falling in line with the conclusions made in the study.

4 Things Pushing Seniors Towards Bankruptcy:

Without significant government policy changes, the trend of increasing numbers of seniors filing bankruptcy is likely to continue.

If you are struggling through your retirement years or if you are facing your retirement years knowing your income won’t be enough, get in touch with an experienced Tennessee and Georgia bankruptcy attorney at the office of Kenneth C. Rannick P.C. today.

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What Types of Debt Can be Discharged by Bankruptcy?

Thu, 03 Oct 2019 09:15:00 GMT

Are you looking for information on the benefits of bankruptcy? Do you need to stop creditors who are harassing you for payment? Are you struggling to make minimum payments? Chapter 7 bankruptcy may be just what you need to get a fresh start.

Filing for bankruptcy is a major decision that can have a significant effect on your life for years. You must understand what it can and cannot do for you. Before you decide to file for Chapter 7 bankruptcy, start by getting to know what types of debt are eligible for discharge.

Types of Debts Discharged in Chapter 7 Bankruptcy :

Unsecured Debts: Debts that are not backed by collateral are unsecured debts. They are normally eligible for discharge in Chapter 7 bankruptcy. Examples of unsecured debt include the traditional revolving credit card, medical bills, utility bills, personal loans, back rent, etc.

Some Secured Debts: Secured debts can are eligible for discharge, but the attached lien does not go away. What this means for the debtor is that they can discharge a secured debt (like a house or a car), but they will need to give up the house/car to the creditor.

Types of Debts that are NOT Discharged in Chapter 7 Bankruptcy:

Student Loans: Student loans are unsecured debt, but they are not eligible for discharge unless you can demonstrate that it is an undue hardship upon you or your dependents to repay the student loan. [We often counsel our clients on how to enroll in an income driven repayment plan, through the US Department of Education].

Debt Incurred through Fraud: Any debt incurred through or related to fraudulent activity is not dischargeable. Fraudulent activity can be as simple as buying items on credit with no intention of repaying the debt or falsely representing your income or assets to a creditor during the credit application process. We have extensive experience in assisting those who may have been accused of this type of activity. This is something that should be brought to your bankruptcy attorney’s attention during the initial consultation or interview.

Recent Luxury Purchases and Cash Advances: Some debts that are generally eligible for discharge will be deemed not eligible if the debt was incurred too soon before the bankruptcy filing. We often spot these types of transactions, and successfully avoid these problems using lawful pre-bankruptcy planning practices.

Lawsuit Judgments: While most money judgments are dischargeable, there are exceptions to the rule. It is usually best to file bankruptcy before receiving a lawsuit judgment. After a judgment is issued, a creditor has the right to put a lien against any personal property or real estate. Many liens do not go away due to bankruptcy.

Certain Tax Debts: Income taxes may be discharged under certain conditions, but unless particular conditions are met, the debt is not eligible for discharge.

There is no shame in seeking a discharge of debt when unintended circumstances leave you struggling to care for your family. When you are out of choices and need help to release your family from chains of debt, don’t hesitate to get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.

The post What Types of Debt Can be Discharged by Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

Chapter 13 Bankruptcy & Your Second Mortgage

Mon, 26 Aug 2019 08:12:00 GMT

One advantage to filing for Chapter 13 bankruptcy is the possibility of getting rid of second or third mortgages on your home or stripping home equity loans or HELOCs (home equity lines of credit). The elimination of these loan types is referred to as lien stripping.

In Chapter 13 bankruptcy, petitioners usually keep all their property. If the debtor has secured debts, they are required to stay current on their payments or they will lose the property used for collateral. Chapter 13 bankruptcy does make sure that filers can fulfill this requirement through the option of including arrearages in the repayment plan. Chapter 13 filers who wish to keep their home need to continue to make their mortgage payment and catch up on any past due amounts through the bankruptcy court’s repayment plan.

The Chapter 13 bankruptcy process may be slightly different when dealing with second and third mortgages or HELOCs. For instance, if the home value has decreased, and the equity in the home no longer covers the first mortgage on the house, the “additional” mortgages are no longer secured by the property. They essentially become unsecured debt, and the bankruptcy court may “strip off” second and third mortgages or HELOCs under these circumstances. Unsecured debt is given last priority in a Chapter 13 bankruptcy. While they are theoretically paid through the repayment plan, their last priority status means they often are not paid in full, and some do not have to be paid back at all. At the end of the three to five-year repayment plan, any remaining balance on second or third mortgages or HELOCs that were recategorized by the bankruptcy trustee as unsecured is discharged.

Most jurisdictions only make lien stripping available through a Chapter 13 bankruptcy. But if you are filing bankruptcy in Georgia, you may be able to remove junior liens in a Chapter 7 bankruptcy.

For assistance filing for bankruptcy or more information about lien stripping, please get in touch with the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.https://bankruptcychattanooga.com/contact-us/

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The Difference Between Chapter 7 and Chapter 13 Bankruptcy

Sat, 24 Aug 2019 10:09:00 GMT

If you are overwhelmed by debt and you can’t keep up on your loan payments, you may be considering filing for bankruptcy. There are two common types of bankruptcy that can help reduce or eliminate your debt: Chapter 7 and Chapter 13 bankruptcy .

Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, means selling off nonexempt property to pay off debts. Chapter 7 bankruptcy is usually a good idea for petitioners who have limited incomes and cannot pay back all or some of their debt. The Chapter 7 bankruptcy results in a discharge of all debt (with a few exceptions as some types of debt are not eligible for discharge).

Chapter 13 bankruptcy, often called the reorganization bankruptcy, does not require that property be sold to gain bankruptcy protection. Instead, the petitioner must complete a court-mandated repayment plan. Once the repayment plan is completed, with on-time payments made to creditors as agreed through the bankruptcy court over a pre-determined amount of time, remaining unsecured debts may be discharged.

How Long Does It Take to File?

Chapter 7 bankruptcy case may be filed in a matter of a few days provided you are well organized and can promptly give over he information your lawyer needs to thoroughly complete your court documents. Once filed, the large majority are completed in 3 -5 months.

Chapter 13 bankruptcy is completed when the last planned payment is made (usually 3-5 years).

What Happens to Your Property During Bankruptcy?

During a Chapter 7 bankruptcy, the bankruptcy trustee can sell any non-exempt property to pay creditors. With good planning with your lawyer you will know what to expect and strategies may be available to accommodate that possibility.

During a Chapter 13 bankruptcy, petitioners keep all their property but must pay their creditors an equal amount in value to their nonexempt assets during their payment plan.

Does Bankruptcy Allow Debtors to Remove Unsecured Junior Liens from Real Property through Lien Stripping?

If you have a second mortgage on your house sometimes a Chapter 13 will let you keep your house and get rid of the second and other junior mortgages. If the value of the property is less that the total of taxes and senior liens, then the junior liens may be wiped out without you paying for the debt and you get to keep the property! This can’t be done in Chapter 7. If you are interviewing a lawyer and (s)he has not explored this option then get a second opinion.

Does Bankruptcy Allow Debtors to Reduce the Principal Loan Balance on Secured Debts Through a Loan Cramdown?

In Chapter 13 under many conditions the borrower can pay the value of the property which is collateral for the loan and not the entire principle. in a car case, the Debtor gets title without paying the car loan in full. In addition, where the person had a high interest rate from the lender, it is common to reduce the interest rate on the account. This frequently results in a lower car payment, or many fewer months to pay off a car.

What are the Major Benefits of Filing Bankruptcy?

Chapter 7 bankruptcy allows debtors to receive a full discharge of most debts in a short amount of time for a fresh start.

Chapter 13 bankruptcy allows debtors to keep their property and catch up on missed mortgage payments, auto loan payments, and nondischargeable priority debt payments.

What Are the Negatives of Declaring Bankruptcy?

Chapter 7 bankruptcy allows the bankruptcy trustee to sell the nonexempt property and does not provide a way to catch up on missed payments to avoid repossession or foreclosure.

Chapter 13 bankruptcy requires debtors to make monthly payments to the bankruptcy trustee for three to five years, and debtors may be required to pay back a portion of their unsecured debts.

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Top 5 Reasons to File for Chapter 7 Bankruptcy

Mon, 19 Aug 2019 10:06:00 GMT

A common misconception about bankruptcy petitioners is that they filed bankruptcy after irresponsibly overspending on credit card accounts. While this is sometimes the case, it is an oversimplification, and it isn’t even the most common reason to file for Chapter 7 bankruptcy .

Top 5 Reasons Americans File Chapter 7 Bankruptcy :

As you can see, irresponsible spending, while not unheard of, is not the leading cause of bankruptcy. For most bankruptcy petitioners, the reason they filed was actually due to medical expenses. In some cases, it may be a chronic illness requiring expensive, long-term care. In others, a family may have been surprised by a rare illness that resulted in significant medical bills out of the blue. In today’s marketplace, even “good” insurance coverage often comes with hefty copays and deductibles. Deductibles and copays so high that the typical American family cannot afford to be sick. According to a recent study by Harvard University, 62% of filers sought bankruptcy due to medical expenses. And out of this group seeking bankruptcy protection due to extraordinary medical bills, 78% had medical insurance.

Job loss accounts for the next significant chunk of bankruptcy filers. Since many Americans do not have enough money in savings to cover their expenses after an unexpected or prolonged job loss, many feel credit cards are their only option. In this situation, people are eventually able to obtain employment, but the debt incurred while between jobs is often too much for them to pay off.

Excessive revolving debt (credit cards and other unsecured debts), divorce, and disasters account of most other bankruptcy filers. Credit card debt is often associated with irresponsible spending, but for many, it wasn’t necessarily frivolous spending. It may have been an expensive car repair bill that was paid for on credit or medical bills that were covered with a credit card, etc. This type of large charge can quickly get out of hand for someone in the low to the mid-income range. Divorce may seem like a strange addition to the list of top reasons to file bankruptcy until you consider the sudden need to establish two households without doubling the income. Unexpected disasters are rare occurrences. Most don’t plan for them, and many don’t realize those homeowner insurance policies do not generally cover property loss related to natural disasters like hurricanes or earthquakes. Coverage for natural disasters usually requires purchasing a separate, specific policy.

If you are in any of these impossible financial tangles, don’t give up. There is always hope. Get in touch with the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. today. We help good people through bad times every day, and we can help you, too.

The post Top 5 Reasons to File for Chapter 7 Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Bankruptcy Basics: The Benefit of the Automatic Stay

Wed, 24 Jul 2019 08:57:00 GMT

No one deserves to be afraid to answer their phone or check their mail or open their front door to an unexpected arrival. If creditors are harassing you, you will be relieved to know that there is a way to put a stop to the harassment. Bankruptcy is a legal process put in place by America’s founding fathers to protect people just like you from this exact problem. One of the most immediately apparent benefits is the automatic stay that goes into effect immediately upon filing your bankruptcy petition with the court.

How Does the Automatic Stay Benefit Tennessee and Georgia Bankruptcy Petitioners ?

The automatic stay is designed to offer relief to debtors who are in the process of filing for bankruptcy. As soon as the bankruptcy petition is filed with the court, the automatic stay goes into place. Creditors and collectors are alerted of the bankruptcy filing, and the vast majority of collection action must immediately halt. The basis of the automatic stay is simple. Once you file for bankruptcy, most all creditors have to leave you and your stuff alone. they can’t sue you; call you; send you messages; continue automatic drafts; or foreclose or keep your car that was just repossessed. There are a fair number of narrow exceptions that do apply so you need to stay in touch with your qualified consumer Bankruptcy Lawyer specialist to see if they fit within the narrow exception. if not, then they are responsible to pay your damages and attorney fees for defending against these stay violations.

If creditors are harassing you and you need help, please get in touch with the law offices of Kenneth C. Rannick P.C. Our Tennessee and Georgia Bankruptcy Lawyers have the knowledge and experience to help you get on the road to recovery.

The post Bankruptcy Basics: The Benefit of the Automatic Stay appeared first on Kenneth C. Rannick, P.C. .

Pros and Cons to Consider Before Filing for Chapter 7 Bankruptcy

Sat, 20 Jul 2019 08:39:00 GMT

If creditors are harassing you and you are struggling to make ends meet, you may want to consider filing for Chapter 7 bankruptcy . The Chapter 7 petition asks the bankruptcy court to discharge your debts to create a fresh financial start.

Chapter 7 Bankruptcy: Pros

Chapter 7 Bankruptcy: Cons

If you are considering filing for bankruptcy and you need to discuss the pros and cons of filing, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with Two! You are in good hands with Kenneth C. Rannick P.C.

The post Pros and Cons to Consider Before Filing for Chapter 7 Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Common Property Interests that Require Complete Disclosure During Bankruptcy

Wed, 26 Jun 2019 10:00:00 GMT

Are you filing for bankruptcy in Tennessee or Georgia ? Do you know what property you are required to disclose for a Chapter 7 filing ? The answer is straightforward. You must disclose all your property. While the bankruptcy process was designed to protect you and your property, to access the protection it offers, you must disclose every asset and every debt to the best of your knowledge. Complete disclosure is essential; without it, the bankruptcy court may dismiss the case entirely.

At the meeting of creditors, bankruptcy petitioners are usually asked if they are telling the truth. You may even hear the phrase “under penalty of perjury” to remind you that hiding assets during bankruptcy is a federal bankruptcy law violation with severe consequences.

Common Property Interests that Require Full Disclosure Include: property received through an inheritance, gifts from friends or family, bonuses or commissions, property that someone else paid for, property or assets that have no paper trail, any claims you have for money or settlements (personal injury claims or lawsuits), assets you sold or gifted during the four years preceding bankruptcy filing, possible inheritance, accounts of real estate owned by family members with your name on it, property that will be issued to you in a divorce settlement, personal debts owed to you by friends or family members, etc.

When filing for bankruptcy , your petition must list all your property alongside all your debts.

The majority of people filing for bankruptcy are hardworking, honest Americans who don’t have many options left. If you are filing for bankruptcy, make sure you provide full disclosure of all your property and all your debts to your bankruptcy attorney.

Need to file a Tennessee or Georgia bankruptcy ? Get in touch with the experienced bankruptcy attorneys at the law offices of Kenneth C. Rannick P.C. today. We help good people through bad times every day, and we can help you, too.

The post Common Property Interests that Require Complete Disclosure During Bankruptcy appeared first on Kenneth C. Rannick, P.C. .

Should a Christian File Consumer Bankruptcy?

Tue, 08 Jan 2019 09:03:00 GMT

If, as Psalms 37 says, “The wicked borrow and do not repay,” is filing bankruptcy a sin? Is considering filing bankruptcy wicked?

No, while bankruptcy should be treated as a last resort, it is a viable option for Christians and non-Christians alike.

Determining if Bankruptcy is Appropriate for You:

Do you have other choices?

We all have a responsibility to provide for our families, even if “family” is just you on your own. If you have sought help and guidance for your financial troubles, worked with your budget as much as possible, turned to family and friends for help and advice, and negotiated with your creditors, but you’re stuck in an impossible situation, bankruptcy may be necessary to take care of your family. Living in fear of lawsuits filed by creditors or garnished wages is not a good solution.

Do you take responsibility for your debt?

In many cases, difficult situations precede overwhelming debt, situations like divorce, health issues, unemployment, death of a loved one, etc. Take a hard look past the overwhelming “difficult situations” and try to identify the smaller things that could have been done differently to avoid the financial upheaval or lessen the problem. Is there anything you could have done differently that may have been helpful?

Have you taken steps to avoid similar issues in the future?

Identify things you wish you had done that may have helped you avoid the current financial situation, and make those changes now. For instance, if you didn’t use a budget to control and monitor spending before getting in debt, put one in place now. If part or all of your debt was due to credit card spending, make a decision not to use credit cards at least for a time and then follow through on the decision.

Owning up to the situations and actions that led to the current situation allows you to take steps to avoid similar problems in the future. And bankruptcy provides the fresh start you need right when you need it the most.

For a more in depth article about whether a Christian may file bankruptcy , see the article written by Mr. Rannick on the subject: www.bankruptcychattanooga.com.

If you need to file bankruptcy, don’t hesitate to call Kenneth C. Rannick P.C., Tennessee and Georgia bankruptcy attorney . We help good people through bad times.

The post Should a Christian File Consumer Bankruptcy? appeared first on Kenneth C. Rannick, P.C. .

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