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Middle Tennessee Bankruptcy Blog

When missed mortgage payments become the new normal

A home is a place meant for comfort, security and peace of mind -- these are just a few reasons why a home foreclosure can be so threatening to one's wellbeing and way of life. Countless Tennesseans face this threat but are unsure of where to turn in such hard times. Depending on the situation, avoiding a foreclosure altogether may be a possibility.

HGTV shares some helpful pointers for those experiencing a dreadful property foreclosure, noting that lenders do not always have to appear as villians. In fact, some lenders are willing to compromise when it comes to finding a solution with missed mortgage payments. Another option HGTV mentions is a deed in lieu, in which a homeowner voluntarily hands the deed back over to the bank. Although some lenders discourage taking this route, it may prove beneficial for some homeowners. Bankruptcy is another option, as HGTV states that it can put a halt to foreclosure altogether. After a homeowner files a bankruptcy petition, debt collectors and lenders must cease their collecting actions under federal law. 

Is your cancer treatment pushing you into debt?

You got the news no one wants to hear from their doctor -- you have cancer. After the initial shock, you learned all about it and what your treatment options were. You picked a course of action and started acting. Now, not too long after starting treatment, you learn your insurance isn't as helpful as you had hoped and you are facing some serious debt if you continue treatment. Sound like your life? It certainly is the reality for a number of Tennessee residents.

According to a fairly recent news article in The Washington Post, new cancer treatments can cost upward of $100,000 per year. Few people can afford that.

Is higher education worth student loan debt?

It is a major topic of debate, and also a primary concern for millions. It is both a necessary expense and a dark cloud that can follow graduates for decades. Student loan debt has been in the spotlight for years, as it simultaneously symbolizes a higher education and, more recently, years of ongoing struggle. As a result, some have turned to bankruptcy. This leads many Tennesseeans to ask, is excessive student loan debt worth the satsifaction of earning a degree?

Last spring, PBS News Hour shared the crippling statistic that college student loan debt in the country amounted to $1.4 trillion -- exceeding what Americans owe on car loans and credit cards. While acquiring statistics for job placement and salaries post-college seems an ideal place to start, some financial experts stress the difficulty of such a task. Because many students take college classes part-time as they maintain steady jobs, getting full data on the effects of a college degree can exist in a gray area. The field a student chooses to study is another factor, as some industries have higher projected growth rates than others; relying on colleges to gather data on each major has also proven to be challenging. However, areas such as teaching or social work, for example, do not pay as well as jobs in scientific fields, and can come with differing outlooks on costs. 

Can I ever have good credit after a Chapter 7?

If you are one of the many people in Tennessee who is feeling the pressure of mounds of debt that only seem to rise despite your best efforts, you may well have given thought to filing for bankruptcy. While it might sound good to know that you could relieve yourself of some of the debt you owe and cannot pay, you might also be concerned about the long-term impact on your credit of filing for a Chapter 7 bankruptcy. 

You should not necessarily let fears of future credit unworthiness stop you from getting the help you need today. As explained by Nerd Wallet, it is very possible to rebuild your financial stability after a bankruptcy, including getting new credit. The fact is that credit is a part of life in today's society. Few people can buy a car, for example, without taking out a loan. With the right effort on your part, you will be able to get loans and other credit again.

Can you stop wage garnishment?

Tennessee residents who fall into debt will eventually find themselves being targeted and potentially even threatened by collection agencies. Commonly, these agencies will garnish your wages in order to collect your debt payments from you. This can have a hugely negative impact on your finances, especially if you're the primary financial support in your household. But can it be avoided?

In short, yes. Your first possible option is to look for exemptions to wage garnishment within your area. As FindLaw shows, wage garnishment exemptions differ from state to state, and certain types of exemptions may apply to your unique situation. For example, there's a limit on the amount of money that can be garnished from every paycheck if you're the main pillar of financial support in your family. If an exemption applies to you, you will first need to file a claim explaining why you believe the exemption applies. A judge will then look at your case to determine if you qualify.

Understanding the bankruptcy means test

Residents in Tennessee who are considering filing for bankruptcy should educate themselves about the process as part of determining whether or not a Chapter 7 bankruptcy really is the right option for them. One of the steps that people pursuing bankruptcy must complete is to take what is called the means test. 

As explained by Nerd Wallet, the means test is a way of the courts identifying who does and who does not meet the qualifications for filing bankruptcy. Simply put, courts do not want people who are in their eyes legitimately able to repay debts walking away from them. Instead they want to retain bankruptcy as a valid route for those consumers who truly have no other options for how to get out from under their pile of debt.

Students loans are the source of financial strain for many

Tennessee readers know that many people who go to college leave with student loan debt. With the rising cost of tuition, room, board and textbooks, most people are unable to manage the cost of college on their own, and student loans often seem like the answer. The result is a crisis — thousands of graduates with significant debt burdens they are unable to manage on their own.

Sadly, many people end up defaulting on student loans because they cannot make the payments, which results in accumulating interest. The final product is often a balance that is more than double the actual amount of money borrowed. As awareness of the student loan crisis grows, it is possible that some lenders have deceived and taken advantage of many student loan applicants.

What is the Fair Debt Collection Practices Act?

When you accept and use a credit card, your are acknowledging your responsibility as a Tennessee consumer to pay on the debt. Also part of this agreement is the right of the creditor to seek payment of the debt. However, this does not mean that a creditor can do anything they want whenever they want in order to secure payment. There are clear guidelines around the practices that are approved for use as part of a means to collect debt. It is important that you understand your rights here as a consumer to protect yourself against unfair treatment by a creditor or other debt collector.

As explained by the Federal Trade Commission, any company wanting to contact you regarding a debt allegedly owed by you may only do so during certain times of the day per the Fair Debt Collection Practices Act. This law also governs the means by which a debt collector may contact you and where they may contact you. No debt collector can contact you at work, for example, unless you indicate that it is acceptable to do so.

Managing bankruptcy and divorce

If you are one of the many people in Tennessee who is facing the potential end of your marriage, you may also be experiencing severe financial problems. It is not unusual for money to contribute to marital strife and even the irrevocable breakdown of a marriage. When in this situation, you may be giving consideration to filing for bankruptcy as a way of getting a fresh financial start much like filing for divorce might give you a fresh start in other aspects of life.

However, as My Horizon Today explains, you should carefully evaluate your situation to determine if it is better for you to file for bankruptcy before or after your divorce as there can be significant differences in each approach. First of all, you should know that a Chapter 7 bankruptcy may be completed in just a few months but if you select a Chapter 13 bankruptcy, this type of plan lasts as long as five years. The nature of your debts, assets and income will direct which type of bankruptcy plan is better for you.

Many Tennessee condos at risk for bankruptcy

Tennessee is one of several hot spot states for tourism and is also often seen as a prime retirement location. You may be one of many who own or rent a condominium somewhere in this state. Many people love condo living because it usually means someone else is responsible for major maintenance and upkeep. 

Whether you own or rent your condominium, you may have noticed a rising trend impacting condo living throughout the nation; many condominium complexes are in great need of repair and maintenance but owners lack necessary funds to complete the tasks at hand. This has resulted in serious financial crises and many vacant dwellings. A key factor in overcoming financial problems, however, is knowing ahead of time what type of debt relief options are available.

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Rothschild & Ausbrooks, PLLC
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Nashville, TN 37212

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