As residents throughout the state of Tennessee suffer the cascading repercussions of those greater economic failings affecting the whole of the United States of America and the rest of the world, households struggling against escalating credit card bills and the other problems ensuing from unemployment and financial worries have begun to explore the necessity for bankruptcy protection. Upon investigation of the Chapter 7 possibilities, however, many of the consumers around Tennessee have started to recognize that the restrictions associated with governmental bankruptcy protections have undergone a marked overhaul over the past few years, and a sadly large portion of Tennessee debtors end up wishing that they had learned more about the program before they entered the process. Even presuming that the Tennessee residents manage to qualify for Chapter 7 debt liquidation bankruptcy (which is no longer a guarantee for every Tennessee borrower that’s maintained a significant income), they must still run through the gauntlet of property seizure the program enduringly threatens, and, more damaging still, any failure to mention the smallest strain of income – whether from trifling investment dividends or a home business that barely affords the name – could severely disturb the stability of even the most deserving Chapter 7 bankruptcy claim. Keep in mind that, even with the best possible legal counsel, there’s no better arbiter of a household’s financial needs then the people actively involved with running that household. However important it may be to listen to the advice of Tennessee professionals experienced with bankruptcy law or other forms of debt control, the benefits of personal hands on knowledge to the affected parties could not be over stated.
To that end, Tennessee consumers who are considering the Chapter 7 or Chapter 13 bankruptcy alternative should learn as much as they can about the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Most notably, that piece of legislation limited the availability of Chapter 7 bankruptcy protection – the, so to speak, real bankruptcy option that eradicates unsecured debts – to only those Tennessee heads of household who earned less than the median gross annual income of residents of Tennessee no matter what area of the state they live in. According to the most recent information collected by the United States Census Department (the mathematics, as should seem clear enough, fluctuate dramatically and any borrowers thinking about Chapter 7 bankruptcy should look on the government website or call a US Census representative for the most recent figures), a Tennessee living alone without dependents can have a gross income just below thirty six thousand and eight hundred dollars. However, if the household contains two members, the acceptable income level rises to forty six thousand dollars. With three members, the income level’s fifty three thousand dollars and three hundred dollars, four members sets the level at sixty one thousand and eight hundred dollars, and every supplementary member of the household adds another sixty nine hundred dollars to the total. If the borrowers’ gross annual income removes them from claims of legitimacy for Chapter 7 bankruptcy protection in the state of Tennessee, they’ll have no other option but to examine the Chapter 13 program (which only focuses household budgets upon a payment schedule and should be avoided unless their home or some other vital secured debt’s threatened by foreclosure or legal action) or similar debt management resources, but, before deciding anything, they need to still look further into the various regulations surrounding bankruptcy to make sure they have done everything possible to qualify.
Under the BAPCPA regulations, there’s also a means test intended to calculate whether or not the Tennessee borrower’s income deducted from their monthly obligations (minimum monthly payments to utilities and secured debts such as car loans and home mortgages) and family cost of living expenses (as judged by the Internal Revenue Service averages for the entirety of Tennessee) would provide a back door to Chapter 7 bankruptcy protection. Once Tennessee residents realize that a consumer debt problem exists, the next step is learning more about every single one of the potential solutions. Preparation really is half the battle, and the prospective bankruptcy client in Tennessee could never be sufficiently educated about the various challenges awaiting them through the rigors of governmental protections. Informed borrowers have a distinct advantage, and residents of Tennessee should make sure not to make any errors when filling out the initial bankruptcy petition, creditor matrix, and asset schedule required for Chapter 7 debt elimination protection. For instance, borrowers must make certain that they do not ignore one specific claim or expected windfall for fear that the trustee decides that the lapse was in some way preferential (and therefore criminally fraudulent) even if the coming funds were the result of injury or familial death benefits. The preponderance of those Chapter 7 bankruptcy petitions that have been dismissed by Tennessee trustees upon the superficial examination from county court officials were rendered invalid because of a failure to report some sort of public assistance (like workers’ compensation) that, in matter of fact, were entirely allowed under the exemption slate designed by the Tennessee legislature.
More commonly, Tennessee borrowers will attempt to gift funds or donate assets to friends and family just before declaring bankruptcy, but this too could drastically backfire. Once Tennessee residents subjects themselves to the oversight of the bankruptcy court, the Tennessee trustee can and will force the recipients to relinquish those funds even if the family members in question had no idea that there was something amiss about the present and even the funds were already spent! If ANY money or property of value has been handed over from the filer during the year prior to bankruptcy declaration, that transaction will have to be recorded in the initial documentation and the Tennessee court trustee will then have the explicit authority to determine if the transaction was legitimate and warranted. Again, the question’s one of preference and, to a weirdly artificial degree, fairness. Should the Tennessee judicial representative have any reason to believe that one lender was selected above another, the courts could legally recover those funds and disperse them equally to all creditors that would be affected by Chapter 7 bankruptcy protection even if the discovery of such an action would also preclude the discharge of the applicable unsecured debts. In similar fashion, gifts deemed extravagant could be reclaimed by agents of the Tennessee court and given over to auction with the resulting funds (however minimal, considering the nature of bankruptcy auctions) parceled off to the various creditors. While this statute may be theoretically well meaning, one wouldn’t want Memphis investment bankers simply sloughing off sports cars or rental properties to a conspiratorial relative as they claim bankruptcy protection, the realities of the law allows for an uncomfortable level of subjectivity on the part of the Tennessee trustees, and borrowers absent proper legal counsel may unknowingly lead not only their own household toward the precipice of financial ruin but also harm the fortunes of family members unable to suddenly return past generosities.
Any factual errors are to be avoided, particularly since, in many cases, if the Tennessee borrower had simply told their attorney about the asset, it may well have been exempt anyway. But you cannot keep property that you did not both schedule and exempt, so some debtors create problems where they should not otherwise be. Not to mention that there are criminal penalties including jail time available for bankruptcy fraud. For this reason, borrowers in Tennessee must make certain that the attorneys they are working with are well versed in the many corners and quadrants of the federal bankruptcy code as well as the local Tennessee regulations which so often diverge from the national standard. For instance, there’s a yawning chasm between the exemptions offered by the United States government and the generally more lenient alternatives blessed by the Tennessee state legislature. Homeowners with a great amount of equity remaining in their property – though, to be sure, this refers to a minority of problem debtors after the preponderance of debt consolidation mortgages over the last few years – may be more comfortable with the federal slate of exemptions which allows properties to be appraised at twenty thousand dollars more than owed by their current home loan while the local statutes only protect five thousand dollars of equity (which goes up to seventy five hundred dollars for married couples filing for Chapter 7 bankruptcy together).
However, should equity not be a concern for the Tennessee residents declaring bankruptcy, the exemptions laid down by the Tennessee legislature may well be of more benefit to the family and allow more protection for their possessions. Under Tennessee law, households would not have to worry about the family library (specifically the family bible and any books intended for education), family pictures, portraits, health sustaining equipment prescribed by medical professionals, burial lots provided they’re under one acre in diameter, and any storage containers. Also, Tennessee residents maintain ownership of any property that’s considered part of a business partnership, tools of trade utilized by the primary wage earner would be protected up to a value of nineteen hundred dollars, and various items around the household or personal possessions could have a total value of four thousand dollars. Furthermore, three quarters of any wages or commissions earned but not yet paid should be exempt for the head of household (combined with pocket change for each child under sixteen living in the same home) as well as compensations for victims of crime (up to seventy five hundred dollars) and a family member’s wrongful death (up to ten thousand dollars) or any benefits given for disability or accidents. Life insurance proceeds granted for dependants are thoroughly vouchsafed and funds from home owners’ insurance proceeds are protected up to five thousand dollars. ERISA benefits and public assistance benefits (those given to the elderly, veterans, the unemployed, and workers’ injured on the job) are exempted in total, and, depending upon the specific date of the bankruptcy petition and payments, most moneys deriving from alimony support should be fine for Tennessee borrowers attempting Chapter 7 bankruptcy.
Unfortunately, it’s extremely thorny for ordinary Tennessee households to plot a course through Chapter 7 bankruptcy exemptions without the benefit of an attorney’s practiced expertise unless they have their own experience in dealing with the complexities of consumer finance and government regulations, and, with the fees charged by the most effective attorneys growing ever more costly as demand jumps through the roof during our nation’s continuing downward economic spiral, a tragic percentage of Tennessee residents may find themselves not being able to come up with the money to successfully file for either Chapter 7 or Chapter 13 bankruptcy protection. Considering the problems seemingly inherent to modern bankruptcy procedures, many of these Tennessee debtors have had no choice but to explore some of the alternatives to bankruptcy, and, though Consumer Credit Counseling and the various forms of debt consolidation are best ignored unless that borrower truly wants to end up paying their loans many times over, Tennessee borrowers who’ve tried out the debt settlement negotiation solution seem overwhelmingly pleased with the results. In a nutshell, trained settlement negotiators that accept Tennessee clients into the program (many of these settlement companies are found on line though borrowers should be sure that the professionals are certified by the national debt settlement board) talk down the overall balances owed to various unsecured lenders in return for a promise of swiftly repaid accounts and a guarantee that the clients will not even attempt to declare Chapter 7 bankruptcy. The sped up payment schedules may harshly tighten the Tennessee household’s purse strings for the duration of the repayment process, but – considering that settlement companies generally reduce balances by as much as sixty percent at the start of the program and finish off the total debt load within five years of initiation – settlement negotiation may well be a brighter solution to Tennessee residents’ outstanding debts than even the bankruptcy protection they’d originally hoped for.
The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.
Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?
