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Knoxville Bankruptcy Law Blog

Do you know what to expect at the 341 meeting?

If you are preparing to file for Chapter 7 bankruptcy, you will also want to prepare for your 341 meeting.

Also known as the "meeting of creditors," this is a mandatory meeting that you will generally attend between 21 and 40 days after you file your bankruptcy petition.

A settlement might not be the correct path for debt relief

When it comes to pursuing relief from debts, individuals in Tennessee and elsewhere may have a variety of options to choose from. However, finding the correct path with which to pursue debt relief can be challenging, and certain options might not be as good as they seem. Those who wish to explore debt settlement as an option may find it beneficial to consider the potential downsides of a similar choice, as other outlets could prove much more viable.

At first glance, reaching a settlement for debts can seem exceedingly beneficial, as the amount may be significantly less than the original amount owed. However, while negotiating a settlement, past due accounts continue to fall behind, and creditors may continue to report delinquencies to credit bureaus. Once reported, these debts can remain on a person's credit report for up to seven years, which can have a devastating impact on one's credit score.

Using a credit card to pay for medical debt could prove costly

A medical emergency can take place without a moment's notice, and the costs of treatment can leave a person in Tennessee facing dire financial straits. Individuals who are left scrambling to cover financial obligations may feel as though a credit card may provide them with relief. However, using a credit card to pay for medical debt might not be advisable, and there might be other options that could help a person avoid a potentially disastrous situation.

Although at first glance, a bill for treatment can seem exceedingly intimidating, one might not have to pay the full amount up front. Individuals who are forced to undergo treatment may be able to reach an agreement to pay for treatment over a given period. In addition, one could inquire about the possibility of outside help in covering the costs of care, whether through charitable funding or a nonprofit organization.

Seeking advice on how to handle credit card debt in Tennessee

Whether for assistance in keeping up with everyday expenses, or to help fund a special occasion, many individuals in Tennessee and elsewhere may turn to credit cards in times of need. While the relief provided by such accounts may be immediate, they may also only act as a short term fix to one's issues and lead to deeper financial concerns in the future. For those experiencing hardships due to credit card debt, understanding how to tackle these debts could prove vital to retaining financial stability.

Regardless of how individuals come to find themselves in debt, one of the first steps to retaking control over finances may be to form a budget and cut out unnecessary expenses. This is no different for those with credit card debts, and the income freed up by a budget could help one form a strategy to reduce account balances. When forming a plan to tackle debts, experts suggest that it could prove beneficial to focus on paying off accounts with lesser balances first to free up additional income for larger balances.

Understanding the process and one's rights re wage garnishment

In times of financial struggle, many individuals in Tennessee and elsewhere may be forced to experience a paycheck-to-paycheck lifestyle just to get by. Unfortunately, as debts continue to be a concern, some may face the possibility of having a portion of their wages withheld. Wage garnishment is a serious concern for many, and those who are confronted with the likelihood of a similar issue may wish to know the measures they can take to protect their paycheck.

In most cases, a creditor must file a lawsuit and win a judgment against a debtor before it can seek repayment through wage garnishment. The creditor must also obtain a court order to begin garnishing wages, and the debtor must be notified of the order, as he or she retains the right to appeal the decision. However, there are certain exceptions to the process, and a court order might not be necessary for certain debts, such as those related to unpaid taxes or child support.

4th quarter spending may leave many with credit card debt

There are a variety of circumstances in which a person in Tennessee may experience the burdens of dealing with substantial amounts of debt. However, certain areas tend to be more troublesome than others, and many individuals have faced financial struggles due to credit card debt. With reports suggesting that individuals across the nation piled on more than $90 billion in credit card bills in the previous year alone, such monetary issues may be more common than expected.

Reports suggest that a significant portion of credit card usage over this period took place solely in the fourth quarter of the year. This may come as little surprise, as many individuals turn to similar lines of credit to purchase gifts for loved ones over the holiday season. However, many of those surveyed admitted they also used their credit cards to seek medical attention.

Are your creditors allowed to harass you?

Life can be tough when you owe several creditors. Not only do you have to deal with paying your basic monthly bills, which alone can be difficult, but you are also trying to handle the stacks of letters and phone calls coming in from debt collectors. You and other Tennessee residents who are having financial difficulties might be bothered to the point of harassment by creditors. It is important to understand that some common creditor tactics are against the law.

According to the U.S. Federal Trade Commission, debt collection practices that are unfair, deceptive or abusive violate the Fair Debt Collection Practices Act. This law protects you and other debtors from harassment or misleading information from creditors, thereby putting yourself into even further financial and emotional stress. Debt collectors are aware of the law, but unfortunately, some know that not all consumers understand their rights, so creditor abuse is a regular occurrence. Practices that violate the FDCPA may include the following:

  • Telling you that the company will have you arrested if you do not repay your debt
  • Sending collection letters falsely claiming to be a lawyer, law enforcement officer or government representative
  • Calling you at all hours of the day or night or at times when you requested that they not call you
  • Continuing to call you at work after you specified your place of employment does not allow phone calls
  • Using threatening, intimidating or foul language on the phone
  • Threatening to use physical violence

Actor Joey Lawrence turns to bankruptcy for debt relief

Taking a hard financial hit can cause anyone to struggle. In many cases, people who find themselves unemployed or bringing in a considerably lower income than previous years could easily wind up accruing substantial amounts of debt. Even celebrities can find themselves facing this type of predicament and may soon be on the look out for debt relief options.

Tennessee readers may be interested in one celebrity who filed for bankruptcy last year, according to recent reports. Details indicated that actor Joey Lawrence and his wife recently took this avenue after their debt issues got out of hand. Apparently, a contributing factor to their financial issues was the fact that Lawrence's television show ended in 2015. That year he brought in an income of $534,000, but in the following year, his income was drastically reduced to $58,000.

Credit card debt likely to increase as interests rates rise

Many people in Tennessee and elsewhere carry balances on their credit cards from one month to the next. Although credit cards offer a convenient form of payment, consumers who do not pay their balances in full each month incur additional credit card debt through the high interest rates many cards charge. Now, the federal government is expected to increase interest rates, which is likely unwelcome news to the people who owe significant amounts on their credit cards.

Although it seems almost counterintuitive, experts point to the fact that the nation is in a strong economy as the reason the Federal Reserve Bank will likely increase interest rates this year. However, consumers currently owe well over $1 trillion on their credit cards, which amounts to more than $15,000 for each household, on average. A rise in interest rates will, of course, only increase the debt burden so many already face.

Laws regarding unpaid medical debt in Tennessee

Whether as the result of a planned procedure or an unexpected emergency, most people will incur medical expenses at some point in their lives. However, health care costs continue to rise, and even with insurance, a person can become strapped with unpaid medical bills that will adversely affect their finances and make it harder to make ends meet. When facing this situation, it is a good idea for one to know the laws regarding medical debt in Tennessee.

First, when a person goes to the hospital for treatment, he or she has a contractual obligation to pay for the medical treatment received. Much like credit cards, medical debt is unsecured by collateral, and health care providers can pursue legal avenues to collect the money they are owed, which can include litigation. However, the statute of limitations for collecting medical debt in Tennessee is six years, and after this period, the debtor usually stands a much better chance of defending him or herself in court.

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