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Why Seniors Facing Debt Should Consider Filing for Bankruptcy

Your years spent in active retirement are supposed to be the best years your livef. You are alleviated from the burdens and responsibilities of working every day, and your family is most likely grown. You finally have the time to be a little bit selfish - and you probably have dreams of travel, volunteering, relaxing and pursuing new hobbies. All of this might be shoved to the side, however, if you are dealing with a mountain of debt.

It's a common misconception that the majority of senior citizens are financially stable. In fact, an article published by USA Today reports that an increased number of people over the age of 65 are seeking bankruptcy protection.

The Cost of Filing Bankruptcy Versus the Growing Cost of Not Filing

Filing for bankruptcy is never an easy decision to make. When creditors are calling and bills are left unpaid, it's hard to imagine a way to pay for an attorney and legal fees on top of everything else. However, the expenses of filing for bankruptcy may be less than the growing costs of not filing. In order to make the best decision for your circumstances, take a look at the cost of filing bankruptcy versus the costs of not filing.

Christian Laettner Chapter 7 case may interest Tennesseans

It is not uncommon for individuals to become resistant to situations if they feel they have been pushed into a corner. Even if a potential suggestion could be beneficial, Tennessee residents may balk at an idea if they feel they are being forced into the decision. Some individuals may feel such opposition if they are faced with an involuntary Chapter 7 bankruptcy petition. However, bankruptcy could prove valuable to those struggling with considerable debt. 

Christian D. Laettner -- a former professional basketball player -- is currently facing a similar situation. Reports stated that five creditors are hoping to force Laettner into bankruptcy. The man's obligations were described as business debts and apparently had to do with real estate development that did not prove fruitful. As a result, he is reportedly facing more than $14 million in debt.

Chapter 7 may help with student loan debt in Tennessee

Many individuals facing student loan debt may feel as if they will be stuck with it for the rest of their lives. It is not unusual for this type of debt to consist of hundreds of thousands of dollars, and some Tennessee residents may begin to wonder whether the education was worth the cost. However, rather than thinking in such a manner, parties may wish to look into potentially discharging the debt through Chapter 7 bankruptcy.

It is commonly heard that student loan debt cannot be discharged through bankruptcy. As a result, many individuals with overwhelming debt may not even try to have their debt forgiven. It was recently reported that less than 1 percent of individuals attempted to have their student loans discharged in 2007, but of those who did, nearly 40 percent saw at least some relief. 

Medical emergencies may lead to bankruptcy in Tennessee

It is no secret that the cost of medical treatments can leave individuals struggling financially, especially if the situation arose from an unexpected emergency. Individuals without insurance could be particularly vulnerable, but those with insurance may also find themselves with substantial costs that were left uncovered by their policies. In either case, bankruptcy may be worth exploring if medical debt becomes too much to handle. 

Tennessee residents may be interested in a situation taking place in another state where a family is struggling with medical expenses. It was reported that a 16-month-old child had been playing outside when he was bitten by a copperhead snake. His foot began to bleed and swell, which led to his mother taking him to the emergency room for treatment. 

Tennessee residents may consider Chapter 7, Chapter 13

Feeling overwhelmed with debt is a common issue that many Tennessee residents face. Luckily, dealing with debt does not have to seem out of reach as there are relief options such as Chapter 7 and Chapter 13 bankruptcy that could assist qualifying individuals. Of course, there are certain stipulations that could play a role in which bankruptcy may be right for a particular person.

Chapter 7 is also known as liquidation bankruptcy. Personal assets are liquidated in order to apply the proceeds to outstanding debts. Liquidation does not have to seem like a frightening process, though, because certain assets are exempt from such proceedings in Tennessee. With this type of bankruptcy, there are some debts that could be entirely discharged.

Chapter 7 could help Tennessee residents move forward

Many Tennessee residents have likely faced the difficulties that come along with financial struggles. In many cases, these struggles result from substantial debt that leaves little room for monetary flexibility. If individuals would like to take a step toward ridding themselves of most or all of such debt, they may wish to consider filing for Chapter 7 bankruptcy.

One man in another state recently took such action in order to address his finances. The man is reportedly a neurologist who is currently facing legal troubles due to suspicions surrounding his prescribing of opioids. The investigation resulted from over 64 patients dying of apparent drug overdoses over a five-year span. As a result, the man's medical license was revoked. However, it is unclear whether this revocation may have contributed to his financial distress.

Bankruptcy may be more beneficial than Tennessee residents know

Many individuals who are considering bankruptcy may be putting off filing because they are afraid that doing so means they will lose all of their possessions. Luckily, filing for bankruptcy likely will not leave Tennessee residents with nothing. Even though Chapter 7 bankruptcy includes liquidating assets, there are certain assets that may be considered exempt and remain the property of the owner. Under Chapter 13 bankruptcy, all assets are kept and a repayment plan is used.

It is important to understand, however, that bankruptcy does not necessarily mean that an individual will get to keep all assets and have all debts discharged. There are certain debts that cannot be discharged via bankruptcy. Student loan debt is one of the most common types of debt that is typically not forgiven through bankruptcy. There are also other debts that cannot be discharged, such as child support and taxes. 

Credit card debt, creditor issues may lead to bankruptcy

The majority of people in Tennessee and across the country likely use at least one credit card on a regular basis. Unfortunately for some, credit card debt can become overwhelming and leave these individuals facing serious financial distress. The difficulties they face may make them feel as if they are drowning in uncertainty, and if they are receiving creditor calls, they may suffer even greater anxieties.

If creditors are calling, individuals may want to understand that these parties are not allowed to make threats. In some cases, creditors may ignore the legality of the situation and threaten to garnish wages or take other action in attempts to regain borrowed funds. However, the Fair Debt Collection Practices Act makes such threats illegal, and this information may help individuals keep from falling victim to such scare tactics. 

Financial factors could impact bankruptcy in Tennessee

When Tennessee residents are facing financial issues, they may consider many options in an effort to get a better handle on their debt. In some instances, individuals may create a deferred payment plan with a lender that allows them to make payments at a later time than originally intended. However, if individuals have entered into such a plan and also want to file for bankruptcy, they may wish to determine how the deferred payments could affect their cases.

Because bankruptcy requires creditors to have no contact with the borrowers, individuals may use this option to halt foreclosure or other similar actions. However, the deferred payment plan, also known as forbearance, is a contract between the borrower and the lender, and bankruptcy may be considered a violation of the contract. As a result, lenders may have the option to work toward removing the protection that bankruptcy provides. 

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Ben Sissman, Attorney at Law
44 North Second Street, Suite 403
Memphis, TN 38103

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