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Cleveland Tennessee Bankruptcy Law Blog

Homestead protections in Tennessee

There are different ways that the bankruptcy process may be able to protect the filing party's home. This is true in either a Chapter 7 bankruptcy process or a Chapter 13 bankruptcy process so filing parties should be familiar with the different options and how they work.

While a Chapter 13 bankruptcy may be able to help a filing party who is concerned about losing a family home through foreclosure, by allowing them to bring the payments current through their repayment plan worked out with the court, the Chapter 7 bankruptcy process can also provide some protections for the filing party's home. While a home may be something a filing party worries about during the Chapter 7 liquidation bankruptcy process, homestead exemptions can protect at least some of the equity in the filing party's home.

Knowing how to qualify for Chapter 7 bankruptcy is important

Knowing how to qualify for Chapter 7 bankruptcy protection is important for any individual struggling with debt and seeking options to enjoy debt relief. Chapter 7 bankruptcy is a liquidation bankruptcy option that can help protect struggling consumers and relieve them of their debts.

To qualify for Chapter 7 bankruptcy, the filing party must meet certain criteria but a party who does not qualify should keep in mind that other personal bankruptcy options may be available to help. The means test is used to determine if the filing party qualifies for Chapter 7 bankruptcy. As part of the means test, the bankruptcy court looks to the filing party's average income for the 6 months leading up to the bankruptcy filing. If that income is less than the state's median income, the filing party may qualify for Chapter 7 bankruptcy.

How Chapter 13 bankruptcy protection might be able to help

For those facing a financial crisis that includes debts that have grown and may feel out of control, but have a stable and reliable source of income, one of the personal bankruptcy options that are available may be able to help. Chapter 13 bankruptcy is a personal bankruptcy option that allows the filing party, with a reliable source of income, to reorganize their debts and repay them over time.

Chapter 13 bankruptcy is an option that takes into account the filing party's income when establishing a repayment plan. The filing party works with the bankruptcy court to reorganize their debts and create a repayment plan that is based on the filing party's income and what they can pay. The period of time that the filing party has to repay their debts according to the repayment plan is usually a 3 to 5-year period. Once the filing party has completed the repayment plan, they may enjoy a debt discharge.

How the automatic stay during bankruptcy can help

This blog recently discussed some of the benefits of an automatic stay in bankruptcy. The automatic stay is an important part of any bankruptcy filing to understand because it prevents creditor collection actions during the bankruptcy process and can help protect the filing party and provide a little breathing room for the filing party facing overwhelming debt.

Taking a look at some of the specific types of relief the automatic stay can provide is also an important part of understanding the personal bankruptcy process. When filing for personal bankruptcy, either a Chapter 7 or Chapter 13 bankruptcy carries with it an automatic stay. The automatic stay can help with paramount concerns such as the foreclosure process which it can stop in some circumstances. It can also stop an eviction proceedings or utilities collection payments.

Will you lose your house if you file for bankruptcy?

As someone who is struggling to keep up with your finances, you may be exploring your options and trying to determine which one is best for getting back on your feet. You may know that bankruptcy is one method many people struggling to stay afloat financially choose to get their financial lives back on track, but you may have questions or concerns about the process. More specifically, you may want to move forward with filing for bankruptcy, but you may be hesitant to do so because you fear it may cause you to lose your home.

Many people who are considering filing for bankruptcy wonder whether doing so will cause them to lose their homes, but unfortunately, there is no single, black-and-white answer to this question. Instead, it depends on several factors, among them how much equity you have in your home and which type of personal bankruptcy filing you choose to pursue.

What is a bankruptcy discharge?

The bankruptcy discharge is an important part of the bankruptcy process which makes it important for a party filing for bankruptcy to understand. In essence, the bankruptcy discharge is the part of the bankruptcy process that provides debt relief and a fresh financial start to the party seeking personal bankruptcy protection.

The bankruptcy discharge comes at the end of the bankruptcy process and releases the filing party from personal liability associated with certain specified types of debts. The filing party is no longer required to pay debts that have been discharged through the bankruptcy process. The bankruptcy discharge is a formal order that prevents creditors from taking any collection action against the filing party related to the discharged debts which includes a prohibition concerning legal action against the filing party or communication with the filing party.

Understanding the automatic stay in personal bankruptcy

Regardless of what type of personal bankruptcy the filing party selects, the automatic stay is an important part of the bankruptcy process for them to understand. Both Chapter 7 and Chapter 13 personal bankruptcy protections trigger an automatic stay of collection actions which can be helpful to struggling consumers.

The goal of personal bankruptcy is to provide debt relief and a fresh financial start to struggling borrowers and consumers. There are different types of personal bankruptcy including Chapter 7 bankruptcy, which is sometimes referred to as a liquidation bankruptcy, and Chapter 13 bankruptcy, which is sometimes referred to as a reorganization bankruptcy. Each provides options for struggling borrowers and consumers in different situations and circumstances.

Understandnig the importance of Chapter 7 bankruptcy exemptions

Because Chapter 7 bankruptcy protects certain property from the bankruptcy process, it is important for individuals struggling with debt and considering bankruptcy options to understand what the exemptions are and how they work. Those seeking Chapter 7 bankruptcy protection are likely doing so because they are in a difficult position and may be worried about things like their family home or vehicle they use to get to work.

Fortunately, Chapter 7 bankruptcy exemptions can help by exempting some property, or a certain portion of the value of some categories of property, from the Chapter 7 bankruptcy process. The Chapter 7 bankruptcy process is not intended to punish the filing party or make them start from scratch which is why certain categories of property may be protected from the process. In general, it is important to begin by understanding the Chapter 7 bankruptcy is a liquidation bankruptcy option that allows the filing party to liquidate their assets to repay creditors.

Bankruptcy protections for older Tennesseans

This blog recently discussed the increasing need seniors may have for bankruptcy protections and options to help them with the different types of debt they may be facing. It might be helpful to take a closer look at how this trend is impacting older Tennesseans and the options available to them if they need help.

A recent study reported that older Americans are seeking bankruptcy protections at an increased rate. Researchers reported a fivefold increase in the number of seniors filing for bankruptcy. Tennessee routinely ranks among the top five states for bankruptcy filings, though numbers within the state have fallen a bit in the past couple of years. Researchers pinned the increase in filings on a drop in wages, job losses, overwhelming healthcare costs and reductions in safety net programs for seniors.

Why so many older Americans file bankruptcy

As a Tennessee senior citizen, you may be discovering that what were supposed to be your golden years have instead become a financial nightmare where you have more expenses than your limited income can possibly cover. You are not alone. A new study reveals that the combination of low pensions, low savings, high debt and extraordinary medical costs have placed a large number of older Americans in the position where bankruptcy may be their only viable option. Today, seniors like you account for 12.2 percent of bankruptcies filed whereas this figure was only 2.1 percent in 1991.

In the intervening years, many factors have come together to create a perfect storm in which your income simply cannot cover your necessary outgo. These factors include the following:

  • Extensive debt obligations 
  • Few savings
  • Gaps in Medicare coverage
  • Skyrocketing health care costs
  • Longer waits to receive Social Security