Nashville Bankruptcy Law Blog

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.

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.

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.

If your business is struggling financially, filing for Chapter 11 bankruptcy may be your best option. When considering bankruptcy, there are three steps you should avoid.