Middle Tennessee Bankruptcy Blog

One of the reasons that many in Nashville may be hesitant to consider bankruptcy as a legitimate option to help combat their struggles with debt is the perceived stigma that is associated with it. Some might view those who seek bankruptcy protection as being irresponsible with their money and simply looking for a way to not have to face the actions of their poor financial decisions. Yet this line of thinking might actually reinforce the notion that the decision to file for bankruptcy is a brave one, in that doing so places one in a position to be scrutinized. 

The level on scrutiny one may face might even be more pronounced given their status within their local communities. This fact is on full display in the story of a Michigan woman whose bankruptcy case is now seemingly being used against her by political opponents. Her candidacy for county clerk was attacked when representatives of the opposing party in the county released information showing she had filed for Chapter 7 bankruptcy in 2013. Included in her list of liabilities were a mortgage and car payments, as well as credit card and student loan debt. The woman has since responded by labeling the move as political mud-slinging. 

Whether you have lived in Tennessee all your life or are a recently arrived resident, you may find its economy much like that in other states: sometimes great, sometimes not. In fact, the ebb and flow of the global and national economies ultimately have impacts on your local and personal economic situation as well. In short, if you've been dealing with some financial problems lately, you're likely not alone in your struggle. 

Bankruptcy is a potentially viable option for obtaining real debt relief, but it often gets a bad rap. The trouble is that most of the negative stigma regarding bankruptcy is associated with myths, not facts. Has someone told you that filing for bankruptcy would be a bad idea because it will ruin your credit score? If so, you'll want to keep reading this post because that statement is not necessarily true.

If you file Chapter 7 bankruptcy in Tennessee, your assets may be seized and sold to repay a portion of your debts. To ensure that you are not left without anything or any means to rebuild, the state affords you some exemptions. In Tennessee, the homestead exemption provides you protection for your home.

According to the Tennessee State Government, the current exemption for your home when you file bankruptcy is $7,500 if you are a joint owner or $5,000 if you are an individual. What this means in simple terms is that if your home is worth more than $5,000 or $7,500, it can be sold to repay your debts in a bankruptcy.

If you are a longtime credit-card user in Nashville, you should have noticed a few changes in your billings as a result of the Credit Card Accountability and Disclosure Act, or Card Act, passed in 2009. No longer are you socked with substantial fees and interest-rate hikes for indiscretions such as making a late payment, going over the credit limit or carrying a balance on your card. In fact, there are several benefits to consumers from this law, many of which you may not be aware.

NerdWallet reports that the act installs restraints on the practice of “universal default,” a method of credit-card issuers to hike interest rates on all your credit-card balances when you made a late payment on one account. The Card Act bars companies from boosting the interest rate on new balances for a full year after the account is opened and bans rate increases on existing balances too. As part of the restrictions, issuers must notify cardholders at least 45 days in advance of any bumps in the interest rate. Other protections found in the act include:

• Double-cycle billing: Issuers are banned from using the balances of two billing cycles to calculate monthly interest charges, which generally boosted interest charges.
• Late fee charges: Since January 2017, fees are limited to $27 for the first payment that is late and $38 for ongoing late payments within a six-month period.
• Over-limit fees: Consumers must choose to allow the issuer to approve transactions over their limit, which essentially takes away their reason for charging over-limit fees.
• “Fee-harvesting” cards: People with bad credit could typically only get high-cost credit cards with low borrowing limits. The act mandates that issuers limit fees such as annual enrollment and maintenance charges to no more than one-fourth of the card’s initial credit limit in the first year.
• Billing practices: Issuers must mail statements 21 days before the due date, which must be on the same day of each month.