Nashville Bankruptcy Law Blog

Whether your debt has gotten out of control because of a medical condition or because you close the gap between what you earn and your cost-of-living expenses each month with credit cards, excess debt can make your life very difficult.

You may only be able to make the minimum payments on your various debts each month, which means that the balances on your accounts just keep going up despite your ongoing struggle to pay. Bankruptcy can reduce your obligations by giving you a discharge of your unsecured debts, which will likely include your medical debts and credit cards. It also protects you from aggressive collection activity through an automatic stay.

Roughly 12% of those who file for bankruptcy in Tennessee and other states are 65 and older. The rate was only 2% in 1991, and there are several reasons why older Americans are doing so more frequently. Generally speaking, older people are less likely to work, which may make it harder to pay their medical bills. Of those over age 65 who file for bankruptcy, 60% do so because they can't afford to repay a medical debt.

Those who file for bankruptcy may also struggle to keep their home or other assets, and that could further complicate their financial situation. A bankruptcy can stay on a person's credit report for up to 10 years. However, it becomes less of a hindrance after a year or two. Individuals who have filed for bankruptcy are encouraged to apply for a secured credit card as quickly as possible.

Student loan debt is a burdensome problem for which there is no easy solution. Decades of teaching students that the only real source of upward mobility came from a college diploma has resulted in increased demand for college admissions and a drastic rise in the number of people carrying student loan debt in pursuit of an education and a good career.

Many young professionals have to delay buying a house, having children or even getting married indefinitely because of the debt they incurred while going to college. Although some student loan programs offer flexible repayment options based on income, the overall amount of debt, which can often be many tens of thousands of dollars, can drain your financial resources and make it very hard for you to move forward in life.

Filing for bankruptcy in Tennessee and other states can cost up to $4,000 after accounting for filing and attorney fees. Those who are filing for Chapter 7 bankruptcy will pay a filing fee of $335 in addition to paying an attorney up to $1,500. Debtors who are seeking Chapter 13 protection will pay a filing fee of $310 in addition to up to $2,500 in attorney costs. Attorneys may charge more if a Chapter 13 proceeding is a complicated one.

The filing fee for a Chapter 7 case may be waived or paid in several installments. Those who switch from a Chapter 13 case to a Chapter 7 proceeding will be required to pay an additional $25 to cover the higher filing fee. There are two courses that individuals will likely need to take before their debts can be discharged. The first is a credit counseling course while the other is a debtor education class.