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Middle Tennessee Bankruptcy Blog

The means test: What to expect and why it matters

It's not easy to make the choice to file for bankruptcy. If you are considering this step, you are probably in a precarious financial situation, unsure of how you can pay your debts and ever get ahead. Thankfully, bankruptcy can offer you a way out and allow you to pursue a better and stronger financial future.

There is a lot more involved with filing for bankruptcy than just submitting the paperwork. Not everyone who wants to file is eligible, and there are different types of bankruptcy available to consumers. One of the first steps you will have to take is to complete the means test, the results of which will make it clear which is the best way forward. It may help you learn more about what to expect from this test.

What if crowdfunding isn't an option to help save your home?

Perhaps you're one of few Tennessee residents who has never encountered financial challenges in life. Chances are, however, you're more like most people, who have experienced ups and downs in their cash flow and overall economic well-being. Any number of issues might spark a financial crisis, whether moderate to severe. One month, you might simply have trouble paying your bills on time; however, if your finances veer completely off-track, you might wind up missing several mortgage payments.

Such situations often lead to further financial trouble. You might have the best intentions of getting it all straightened out. You might also feel frustrated or worried if that turns out to be easier said than done. If creditors start calling or your lenders threaten you with foreclosure, you know it's time to seriously consider whatever debt relief options might be available. This is when some people resort to crowdfunding.

Zombie debt can wreck your finances

Debt is part of life for most Americans. Your experience with debt may have begun with a credit card in your teens, a student loan for college, then eventually your first car payment. If you have a mortgage, you may never see a time when you do not owe somebody your hard-earned money.

Did you know that debts have an expiration date? It's true that after a certain amount of time passes without a payment, a creditor or debt collector forfeits the right to take legal action against you for the outstanding balance. You may feel some relief when the statute of limitations passes on your debt. However, they don't call it "zombie debt" for no reason.

How can you know if a debt collector is acting illegally?

One of the most frustrating components of owing a significant amount of debt is experiencing contact from creditors and debt collectors. When you have unpaid bills and overdue balances, you may find that you get phone calls and maybe even letters requesting payment. This is normal, but there are times when the actions of debt collectors may step over the line.

No matter how much debt you owe, you have certain rights. The Fair Debt Collection Practices Act protects you from unfair and harassing treatment from creditors and debt collectors hired to secure payment. You will find it beneficial to learn more about what your rights include and whether it's possible that what you are dealing with over the phone and through other types of contact actually qualifies as harassment.

When is bankruptcy the smart choice for you?

When you are up to your arm pits in alligators, it's hard to stay focused on building a bridge. Debt is like that. When facing financial difficulties, seeing a clear, brighter future can seem impossible. 

If you find yourself in a position where you are dealing with substantial debt and bills you cannot pay, you may feel overwhelmed and unsure of what to do next. You may know that some Tennessee consumers find relief in filing for bankruptcy, but how can you know if this is the right choice for you? 

How different types of debt can affect your financial health

Struggling with debt is a common concern for many Tennessee consumers. If you find yourself with more bills than you can manage, past due notices in your mailbox and phone calls from debt collectors, your situation is serious. Debt of any kind can be stressful, but it can reach a point where it becomes overwhelming.

There are different types of debt - unsecured debt and secured debt. The differences between them can have a significant impact on your credit, the interest you accumulate and even what type of bankruptcy protection you may pursue in the future. Knowing as much as you can about your debt can help you make decisions that will be smart for your financial future.

Are you aware of how much credit card debt you owe?

Many Tennessee consumers have some credit card debt. Like many others, you may use your credit card as a way to pay for daily purchases, like groceries, gas and clothes. You may also depend on your credit card as a sort of emergency fund -- a way to pay for unexpected things you didn't know you would need, like medication or even medical bills. 

Credit cards are part of the American financial landscape, but they are easy to lose track of. Surveys have found that a surprisingly high number of people actually do not know how much they owe. It may surprise you to learn that many people also have no idea how much interest they pay as well. When a person is facing a financial situation that is beyond his or her control, it may be appropriate to consider the benefits of consumer bankruptcy.

What the means test means for your bankruptcy filing

Are you struggling with different types of debt? You may know that one of the options available to you includes filing for Chapter 7 bankruptcy, but you may not realize that not everyone is eligible. Before you can move forward with Chapter 7 bankruptcy protection, you may have to complete the means test. 

The Means test has been around since the U.S. Congress overhauled U.S. bankruptcy laws in 2011. The test will determine if you are eligible for Chapter 7. It is basically a calculation based on your ration of available financial assets (income) to your debt. If the results of the means test reveal that you are not eligible, you have the right to explore other options, including Chapter 13 bankruptcy. Before you move forward, you may want to learn more about what to expect from this test and what factors determine if you qualify for bankruptcy protection.

Worried about losing your property in Chapter 7 bankruptcy?

Struggling with debt can bring a host of complex and negative consequences to your life. You may find that you are dealing with phone calls from creditors on a regular basis, past-due notices coming in the mail and much more. In order to effectively deal with these things, you may consider the benefits of filing for bankruptcy.

Choosing to move forward with Chapter 7 bankruptcy is not an easy choice. You probably wonder what this step will mean for your future and what will happen to your personal property. It may be encouraging for you to learn that there are certain exemptions available that may allow you to keep most of your personal property. This allows you to deal with your debt without losing many of your important personal possessions.

Avoid mistakes when seeking debt relief

Even when paying close attention to your spending, debt can creep up on you. One unexpected expense or poor decision can result in trying to manage the payments on numerous credit accounts, loans, a mortgage and car payments. You may have medical bills and student loans thrown into the mix.

When you realize your paycheck isn't stretching far enough to cover all your debt, you may start to look at ways to pay down what you owe. While there are some commendable steps you can take to reduce your debt, it is easy for panic or desperation cause you to use ill-advised methods for debt repayment. As much as you may wish to rid yourself of overwhelming debt, some actions can have a long-term negative effect on your future.

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1222 16th Avenue South, Suite 12
Nashville, TN 37212

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