Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

Nashville Bankruptcy Law Blog

The different types of bankruptcy explained

Some Tennessee residents may be able to file for bankruptcy to get a better handle on their finances. Both individuals and businesses can file for protection from creditors, and there are many different types of bankruptcy to choose from. Chapter 7 bankruptcy is known as a liquidation bankruptcy. It involves selling some or all of a debtor's nonexempt property in an effort to raise money to pay off creditors.

To qualify for a liquidation bankruptcy, an individual will need to pass a means test. A person who fails the means test may be required to file for Chapter 13 bankruptcy instead. A Chapter 13 case is known as a reorganization bankruptcy, and it can also be referred to as a wage earner's plan. Whereas a Chapter 7 case can be resolved within months, a Chapter 13 case can last for up to five years.

What to know about debt collection efforts

Debtors in Tennessee and throughout the country may be contacted by a debt collection agency. While there are many tactics that they can use to collect payment, there are also things they cannot do in an effort to obtain a debt. It is important for an individual to understand his or her rights under the Fair Debt Collection Practices Act, or FDCPA. It prohibits debt collectors from using abusive language or from contacting debtors at work.

Collectors are also prohibited from calling before 8 a.m. or after 9 p.m. without permission to do so. Debt collectors are also prohibited from contacting a debtor if they have been asked to do so in writing. The only exception is to acknowledge receipt of such a request or to inform a debtor about a lawsuit or other action. Furthermore, the FDCPA makes it illegal to contact a debtor's family members.

Medical bills may hit even insured patients

A significant number of Americans in Tennessee may face a growing debt burden as a result of medical bills. Even though people often prepare extensively for the medical costs they will have to bear, almost one out of every seven patients received an unexpected bill despite receiving treatment at hospitals considered in-network for their insurance providers. In many cases, even in-network hospitals resulted in at least one out-of-network claim. People who needed anesthesia under surgery often faced these claims; 16.5 percent of all such claims were associated with anesthesiology.

In addition, hospitals who sent blood work to independent labs often led to unexpected bills. Over 20 percent of all of these out-of-network medical bills were associated with lab testing. The number of claims varied from state to state; in Minnesota, only 1.7 percent of in-network hospital admissions were associated with unexpected bills, but 26.3 percent of admissions in Florida were associated with these costly claims. Patients themselves have no control over these outcomes; they do not select independent labs or medical professionals.

Tennessee debtors might want to consider Chapter 13 bankruptcy

Chapter 13 bankruptcy is sometimes referred to as reorganization bankruptcy. It allows a person to pay off debts over a predetermined period of time, typically three to five years. It is ideal for a wage earner with good income who is having trouble making payments on time. One of the advantages of a Chapter 13 bankruptcy is that it allows a debtor to keep certain assets, such as their home and car.

There is no income limit for filing a Chapter 13 bankruptcy. Anyone who is willing to pay down debt can file. Additionally, the source of a person's income does not matter; it could come from wages, unemployment, Social Security or a pension. All that is required is for a person to disclose their income sources within 14 days of filing and provide proof that their income taxes are paid. Although there is no income limit, there are debt limits. A filer can have no more than $1,184,200 in secured debt and $394,725 in unsecured debt.

Some employers are helping employees pay off debt

A number of Tennessee residents are battling with debt, whether it be from medical bills, credit card balances or student loans. Understanding the impact that this debt is having on their workers, a number of companies around the United States are offering to help pay off employee debt.

There are a number of different approaches that these companies are taking, ranging from offering discounts on medical debt to offering interest-free loans to pay off debt. The loans are then repaid through payroll deduction. Some employers are offering their employees payday advances or emergency loans to cover expenses. The idea behind these loans is to help employees avoid visiting institutions that offer payday loans as a business as these can lead a person into a continual spiral of debt an eventual Chapter 7 bankruptcy.

Getting out of debt: Athletes who have used bankruptcy protection

We like to blog about celebrities who have used bankruptcy to get out of tough debt situations. We think it's important to remember that we all face hardships and make mistakes in our lives.

Recent news stories have shown us numerous actors, musicians, business people and politicians who have found themselves in need of legal debt relief. But countless professional athletes have filed for bankruptcy, too, and we can learn from them. 

What to know about Chapter 7

Tennessee residents who are considering filing for bankruptcy may have several available options. One possibility is to file for Chapter 7 bankruptcy, which is also referred to as a liquidation bankruptcy. In this type of filing, nonexempt assets are sold off with the money used to repay creditors. A key benefit of Chapter 7 protection from creditors is that debts are generally discharged in a matter of months as opposed to a matter of years.

This is beneficial because lenders generally won't want to work with debtors until after the bankruptcy case is over. However, a debtor will need to pass a means test to qualify for Chapter 7 protection from creditors. Generally speaking, those who have little or no disposable income will be allowed to file while others will need to file for Chapter 13 protection instead.

Recent business bankruptcies show anyone can struggle with debt

Though we're not far into 2019, there have already been a slew of bankruptcy-related announcements this year concerning large companies. Many large businesses have struggled mightily to keep their heads above water.

These bankruptcy filings (and rumblings about filings) illustrate that no organization -- and certainly no person -- is immune to serious debt problems. They also show that the law can be used to get protection from creditors.

Post-bankruptcy success stories: Celebrities who bounced back

Many of us are familiar with the stories of famous people who got rich and then seemingly "lost it all," declaring bankruptcy and tanking financially. Some of the best known are entertainers, business leaders and politicians.

But how much do we know about the ones who bounced back from financial troubles and achieved "success"? A recent Forbes story highlighted nine famous individuals who were able to amass wealth after declaring bankruptcy.

Americans under 30 owe $1 trillion to creditors

Those between the ages of 18 and 29 owe $1.05 trillion to creditors. Tennessee residents and others in this age group have student loan, credit card and auto loan balances in addition to other types of debt. However, they owe less overall than other age groups. Those who are between the ages of 30 to 39 have a collective debt balance of $2.9 trillion.

The main driver of this large debt load is student loans, and much has been made about the issues it could cause in the future. It is thought that as many as 40 percent of borrowers will have stopped trying to repay their loans by 2023. Student loan debt has grown by 100 percent over the past decade, and this had made it harder for younger people to buy a home or otherwise progress in life.

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Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
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Cookeville, TN 38501

Phone: 931-400-2218
Fax: 931-526-6244
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