Using The Law To Make Your Life Better

Northern Tennessee Chapter 7 Bankruptcy Blog

David Sexton

What role does bankruptcy have in a foreclosure proceeding?

Although the national economy is lightyears better now than it was 10 years ago, there are still millions of Americans who are struggling financially, especially when it comes to debt. In fact, some people right here in Tennessee may currently be involved in a foreclosure proceeding, with their home in jeopardy. However, even for those who find themselves in these dire financial situations, there may be options, including filing for bankruptcy.

What role does bankruptcy have in a foreclosure proceeding in Tennessee? Well, as a recent article noted, there is one crucial part of a bankruptcy filing that may have an impact on such a proceeding: the "automatic stay." Our readers who are familiar with previous posts here may be familiar with this part of a bankruptcy filing, which is essentially a court order that all debt collection efforts against the filer are to "pause" in the immediate aftermath of a bankruptcy filing. As a result, a whole foreclosure proceeding can be "stayed" by a bankruptcy filing, at least for a brief time.

The "automatic stay" in a Chapter 7 bankruptcy filing

A number of previous posts have discussed the pros and cons of Chapter 7 bankruptcy. Each situation is different, so a bankruptcy filing will likely have a different impact on one Tennessee resident than it would another. However, there is one pro that is common in all Chapter 7 bankruptcy filings: the "automatic stay."

Some of our readers may be familiar with this part of the bankruptcy process, but, for those who are not, the automatic stay is a part of the court's orders which halts any effort by creditors or debt collectors to collect funds from the person who is filing for bankruptcy. That means any pending lawsuits or other collection efforts are paused for the time being.

Does Chapter 7 bankruptcy save a home from foreclosure?

Could Chapter 7 bankruptcy allow you to keep your house? The answer is probably yes. Most people eligible to file for liquidation are in a financial situation that lets them maintain ownership of their home.

In general, you may find yourself in three situations when approaching Chapter 7. The first is that you would own your house outright. In the other two situations, you would have a mortgage with either excessive or manageable payments. Learn more examples of how you may deal with each scenario.

What are some basic questions about Chapter 7 bankruptcy?

Tennessee residents know that Chapter 7 bankruptcy can be a useful tool to address burdensome debt obligations. However, they may not know some of the basics about the bankruptcy process and how exactly Chapter 7 bankruptcy works. So, what are some of the basic questions that our readers may have about Chapter 7 bankruptcy that need to be answered?

Well, for starters, while Chapter 7 bankruptcy - also known as "liquidation" bankruptcy - is intended to help a bankruptcy filer wipe out most debts, the process may not actually take care of all debt obligations. For example, many people in Tennessee and throughout the country have student loan debts. In the vast majority of cases, student loan debt will not be discharged in the Chapter 7 bankruptcy process. But, debt obligations like credit card debt and personal loans may be wiped out, albeit after some of the filer's assets are liquidated, with the proceeds applied to outstanding debt obligations.

What do you need to know about the "means test" and bankruptcy?

Many of our readers in Tennessee have heard the phrase "Ask and you shall receive," but that doesn't necessarily apply when it comes to filing for bankruptcy. Under the requirements of Chapter 7 bankruptcy - also known as a liquidation bankruptcy - a potential filer must pass a "means test." So, what do our readers need to know about the means test when they are contemplating the pros and cons of filing for bankruptcy?

Well, for starters, the basic point of the means test is to determine whether or not the potential filer actually earns enough income to be applied toward debt obligations. Although there are exceptions and special circumstances when it comes to the means test, in essence, a person's most recent income over a period of time before filing for bankruptcy cannot exceed the state median income. If it does, the potential Chapter 7 bankruptcy filer may need to consider Chapter 13 bankruptcy instead.

Understanding exemptions in bankruptcy is crucial

Chapter 7 bankruptcy has helped millions of Americans address overwhelming debt burdens, including many people in Tennessee. Regardless of how a person's financial situation spiraled out of control, filing for bankruptcy is an option that can help Tennessee residents get themselves on a better financial path in life. However, understanding the details of a bankruptcy filing is crucial, including how exemptions come into play in the bankruptcy process.

Once people determine that they are eligible for Chapter 7 bankruptcy, determining which exemptions to claim in terms of personal property can be a difficult task. There are multiple types of assets which may be exempt from the bankruptcy process, meaning that those assets will not be liquidated as part of the Chapter 7 bankruptcy filing. For example, these are the types of assets that might be considered exempt: workers' compensation benefits; vehicles; household appliances and furniture, among other household goods; jewelry; items used by the filer in their work; clothing; and even funds that are placed in retirement plans. Quite simply, there are many different assets for Tennessee residents to consider when they are determining which assets will be exempt.

What do you need to know about Chapter 7 bankruptcy?

Most of our readers in Tennessee know the basics about bankruptcy: it helps consumers and businesses address overwhelming debt obligations. But, there are different types of bankruptcy filings that an individual can pursue. Most commonly, an individual who is exploring bankruptcy will likely be presented with the option to pursue Chapter 7 bankruptcy first. So, what do you need to know about Chapter 7 bankruptcy?

Well, for starters, Chapter 7 bankruptcy is more commonly known as "liquidation" bankruptcy. This is because under this chapter of bankruptcy filings a person will list all non-exempt assets they own, as well as all applicable debts owed, and then the bankruptcy trustee will sell off the assets with the funds gained being used to pay down debts. Any assets that are exempt under the applicable bankruptcy laws are kept by the filer.

What if you cannot afford to file for bankruptcy?

The point of filing for bankruptcy is to eliminate or reduce debts you do not have the funds to pay. Unfortunately, the bankruptcy process requires money, even if you do not hire a lawyer, due to court fees. This fact prevents many people from filing even though bankruptcy would help them.

It is no surprise, then, that declarations of bankruptcy increase during the tax season, reveals The Washington Post, as people use their tax returns to pay the fees. This is not your only option, however, for being able to afford bankruptcy.

Know your options when it comes to consumer bankruptcy

Despite the recent years of a good economy in Tennessee and throughout the country, there are still millions of Americans who struggle with overwhelming debt. Some are right here in Tennessee. When your income is less than the debt you owe, you may feel like you are facing a dwindling number of options. However, consumer bankruptcy could be an option in even the worst of financial scenarios.

There are different types of bankruptcy filings for Tennessee residents to consider if they are thinking of taking this step to address their debt situation. First, there is Chapter 7 bankruptcy, commonly known as "liquidation" bankruptcy. This form of bankruptcy allows the person who files to list almost all debts, as well as assets, and then the bankruptcy trustee will sell off the applicable assets to apply the funds gained to debts owed. Once all applicable assets have been liquidated in this manner and the person's debts are addressed to the fullest extent possible, many other outstanding debts will be discharged. However, there are some types of debts that usually cannot be part of a bankruptcy filing.

The basics about elderly abuse and neglect

No one in Tennessee wants to imagine that an elderly relative might be abused or neglected at a nursing home, but the reality is that these types of incidents occur with alarming frequency. When we help our elderly relatives get situated in a nursing home, we hope for -- and expect -- that relative to receive the best care possible. However, when elderly abuse occurs, the facilities and the staff members must be held accountable.

There are some basics aspects of elder abuse and neglect that our readers should be aware of. For starters, the signs of abuse may not be as obvious as one would expect. Sure, if your elderly loved one has obvious bruises or other injuries, you'll want to know how those injuries occurred. But, such abuse can go beyond the physical impact it can have on a victim. The victim may be intimidated as well, and so may feel pressured to hide the truth about the injuries for fear of further reprisals. This type of abuse must not be tolerated.

Don't delay any longer.

When you need qualified, experienced legal counsel from a legal leader with over 25 years' experience, you need The Sexton Law Firm.

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