Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
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Nashville Bankruptcy Law Blog

When filing for bankruptcy is a good decision

During the financial crisis, there were 1.6 million bankruptcy filings per year. While that number has dropped by roughly 50% in recent years, it doesn't necessarily mean that Tennessee residents are doing better financially. In some cases, individuals don't file for bankruptcy because they can't afford the $1,000 or more that it can cost to do so. However, the benefits of filing may outweigh the cost to do so.

Young people who don't have assets may have a lot to gain by seeking protection from creditors. This is partially because those who file for Chapter 7 bankruptcy are required to take classes that teach them fiscal literacy. Taking these classes can help individuals avoid going into debt again after their current balances are discharged. However, they are not the only ones who could benefit from bankruptcy.

Chapter 13 bankruptcy offers additional choices for debtors

Many people in Tennessee struggle to make ends meet, even if they have significant assets or properties that they want to keep or make a substantial salary. Credit card debt, medical bills and other expenses can put people's financial health and credit rating at severe risk, especially when they wind up dealing with creditor calls and debt collectors. People often think that they can only declare bankruptcy if they give up all of their assets. However, Chapter 13 bankruptcy offers an option that allows people to retain their property while paying off their debts through a special, court-approved repayment plan.

Instead of liquidating assets to cover a portion of their debts, people in Chapter 13 bankruptcy develop a repayment plan to cover some of the amounts that they owe. Mandatory credit counseling is part of the Chapter 13 process, and people work with their counselors to develop an achievable repayment plan. In general, people can pay back less than the total that they owe, so the court must approve the plan before it goes into effect. The bankruptcy judge may require certain types of modifications before approval.

How to respond to a debt collection lawsuit

In Tennessee and across the United States, people who are experiencing severe financial challenges may need to contact an attorney regarding debt relief. Delinquency in mortgage payments and credit cards may lead to a constant bombardment from creditors attempting to collect payments. A debtor may have the ability to stop creditor harassment by taking the right legal steps. A person who receives a court summons or official complaint from a creditor needs to respond promptly.

Otherwise, the borrower may learn that their wages are being garnished. Plus, the collection agency may freeze the debtor's bank account. Although a response is necessary to prevent legal mishaps from occurring, the correct answer is also a necessity. A debtor should not admit they are liable for the debt because the plaintiff must prove that the borrower owes the money. A debtor owing $5,000 in credit card debt has the right to insist that the creditor provides a detailed account of every transaction made on the credit card.

Many bankruptcies are linked to student loans

America's student loan debt crisis is taking its toll on consumers in Tennessee and across the United States. A new study by LendEDU finds that 32% of individuals filing for Chapter 7 bankruptcy have student loan debt. Of those individuals, student loans account for almost 50% of their average total obligations.

Statistics show that Americans are drowning under a total of $1.5 trillion in student loan debt, which is an all-time high. In 2018, the average student graduated owing $29,800 in loans, according to Student Loan Hero. In addition, Business Insider has reported that millennials have 300% more student loan debt than their parents did. To discover the impact this debt is having on borrowers, LendEDU researchers analyzed 1,083 individual bankruptcy filings handled by non-profit group Upsolve, which provides Chapter 7 bankruptcy services to consumers with low incomes. Information from those who file for Chapter 13 bankruptcy was not included in the study.

Can an LLC bankruptcy impact your personal assets?

As a small business owner, even allowing yourself to think about bankruptcy can be nerve-wracking. You've likely put blood, sweat, tears and countless hours into launching and running your limited liability company. But for whatever reason, you're having trouble seeing a future.

While the number of small businesses that file for bankruptcy is low, it does happen. The reasoning can vary from poor sales, to a lawsuit, to the owner's personal issues. But what effect, if any, might that LLC's bankruptcy have on the owner's personal assets?

Bankruptcy vs. debt consolidation: the pros and cons

Your business has had a few down years and the debt is stacking up. The bills for your surgery are astronomical, the car just died, and your credit card debt is getting out of control. For many, these situations are a reality and can be suffocating.

The amount of debt for the average American household is $135,065. This debt can come from multiple sources: credit cards, mortgages, auto loans and car loans. With the average American household pulling in just over $60,000 per year, it seems that many people are living above their means.

Can your employer provide debt relief?

Employers across the United States have started to offer student debt relief benefits to their employees. Student loan assistance started as a niche offering by a handful of companies and has grown in recent years. This benefit has been helpful to employees nationwide.

Many citizens are struggling to pay off their student loan debt. Nearly 70% of college graduates have student loan debt. Even those who file for bankruptcy do not receive student loan debt forgiveness. Because of this emerging struggle, employers have stepped up.

Bankruptcy and Divorce: What you need to know

Often divorce and bankruptcy are intertwined. Nearly 22% of marriages that ended in divorce, reported that money issues were the main reason for their divorce.

If you and your spouse are struggling financially and are considering both bankruptcy and divorce, you may want to know what steps you should take. Can you file for both at the same time? Which one should you do first?

Can student loan debt forgiveness really happen?

Some lawmakers have proposed bills canceling all student debt across the United States but is that really possible? It is estimated that combined student loan debt throughout the nation is $1.6 trillion.

In addition to this debt forgiveness, one bill proposes free undergraduate programs at public colleges and universities going forward, making college free for everyone.

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Contact our Nashville office at 615-686-2279 or our Cookeville office at 931-400-2218. You can also reach us via email to set up a time to talk to us about your debts.

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Nashville Office
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Nashville, TN 37219

Phone: 615-686-2279
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Cookeville, TN 38501

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