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Cleveland Tennessee Bankruptcy Law Blog

If you're struggling, it might be time to consider bankruptcy

You've been working hard to stay out of debt and to make sure you can pay your bills, but the debts have really piled up. You tried not to add to it, but you've found that your interest rate is making your debt grow even though you're paying the minimum payments each month.

What should you do to get out of debt?

Exemptions can help protect your assets during bankruptcy

Chapter 7 bankruptcies can be great for those who are in debt and who have no disposable income to pay down what they owe. Some people worry about filing for this form of bankruptcy due to the belief that it may leave them with nothing. However, despite the fact that assets may be liquidated during a Chapter 7 bankruptcy, there are actually many exemptions.

With an exemption, you may be able to protect the assets you have in your possession. The result of this is that you may need to liquidate only a small amount of what you own, if anything at all.

Credit scores and bankruptcy: Here are the facts

Bankruptcy doesn't have to be something that scares you. It's designed to help you get out of debt and to minimize the impact of those debts on your life.

Still, there are some things you have to consider. One of the issues that could be holding you back from bankruptcy is how your credit score will be impacted. It's true that your credit score may drop if you decide to go through bankruptcy, but that isn't always the case.

What are the perks of a Chapter 13 bankruptcy?

Chapter 13 bankruptcy is aptly named the "wage earner's" bankruptcy plan. This is because it's usually available to those who earn a decent wage and make too much money to qualify for Chapter 7 bankruptcy.

With Chapter 13 bankruptcy, you'll be expected to make monthly payments to cover your debts. The payment amount will be determined based on your income and how much you can fairly pay back each month. The entire plan will last between three and five years. If you miss a payment at any point, the bankruptcy could be dismissed. Sometimes, a Chapter 13 bankruptcy can be changed to Chapter 7 if there is a good reason, such as the person losing their job.

Why a balance transfer card may not be the optimal choice for you

People deal with their debt in many ways, and the right approach for you depends on the type of debt you owe and other details of your financial situation. Credit card debt is a common problem for many in Tennessee, and sometimes, these balances accumulate because of factors beyond your control. For example, you may have a lot of credit card debt because you lost your job and were unable to pay for things in full. 

Other people rely on their credit cards for daily purchases like groceries or gas. It's easy for these balances to spiral out of control due to minimum payments and accumulating interest. Eventually, a person may find that he or she is unable to keep up with the payments and keep the balance manageable. Eventually, a consumer may start to look for debt relief options, including a balance transfer card.

Don't struggle from paycheck to paycheck. Bankruptcy could help

When you were trying to check out at the grocery store, you were embarrassed to have your card say it didn't have enough money to pay for your purchase. You had just been paid that day, and you should have had enough. Unfortunately, everything else you owed had come out, too. When you were able to check your accounts, you found you'd actually overdrafted already.

Not making enough to make ends meet is hard. You've done what you can to earn more, but things keep getting more expensive. You thought you'd save money reducing your phone bill, but then your electricity went up. You cut out cable, but then your rent increased. It's a never-ending cycle.

Should you choose bankruptcy? Here are reasons to consider it

Bankruptcy is the last thing on most people's minds, even when they're struggling with debt. The reality is that bankruptcy is seen as a kind of last-ditch effort to get out of financial trouble, even though the truth is that it can be an excellent way to stop collections and to get back on track financially even before it's the only option left.

Bankruptcy may be seen as a way to dodge paying back what you owe or to give up responsibility, but in truth, it's a program that is designed to help people in your situation. Anyone who is in difficult financial circumstances may want to consider bankruptcy, especially if they cannot make their payments on time. Bankruptcy can help prevent foreclosure, stop harassing collection phone calls and more.

Worried about bankruptcy? Don't, because it can help

Chapter 13 bankruptcy is not the same as Chapter 7, yet it often gets the same amount of disdain from those who talk about it. While bankruptcy is often perceived negatively, the reality is that any kind of bankruptcy can have benefits for the person who is struggling financially.

The difference between the two primary forms of consumer bankruptcy is that Chapter 13 is usually used for those who are still working and who earn too much to go through Chapter 7 bankruptcy. Chapter 13 allows you to repay part of what you owe over time, while Chapter 7 liquidates some of your assets to repay your debts.

What is a wildcard in bankruptcy?

Chapter 7 bankruptcy might seem to some like a curse, but the reality is that it's an amazingly beneficial way to get out of debt fast if you meet the requirements to file. Chapter 7 bankruptcy got a bad name because of its liquidation aspect. Liquidation bankruptcy can ask that you give up some of your assets. Those assets are then sold to try to pay back your creditors.

The good news for many who go through liquidation bankruptcy is that there are many exemptions. Of those exemptions, one you may want to know more about is the wildcard exemption. This is generally a blanket amount of money that can be used for an exemption of anything you possess. For example, if you have a wildcard exemption of $400, you could apply that exemption to any of the property that you want to keep. You should speak with your attorney about the wildcard exemption's current value and if you will be able to use it in your case.

Keeping your property in bankruptcy

Making the choice to file for bankruptcy can be intimidating. It's not easy to decide to move forward with this process, and one of the things that may be holding you back is a fear of what this can do to your personal property. While you may have to give some things up, it is likely that you can keep many of the things that are important to you. 

Bankruptcy is a reasonable and organized way to deal with certain types of debt. If you are unable to manage your credit card debt, medical bills and other types of unsecured debt, you may consider a Chapter 7 filing. While this is technically liquidation bankruptcy, there are exemptions that can allow you to keep most of your stuff while also obtaining a better financial future.