The post Will Chapter 13 bankruptcy provide needed financial relief? appeared first on William E. Maddox Attorney Law.
]]>Chapter 13 bankruptcy is designed for individuals who do have a steady income but just can’t make ends meet. It allows the individual to restructure his or her debt and establish a repayment plan that allows the individual to retain the item used as collateral for secured debts. Under this type of bankruptcy plan, it is likely that the individual will be able to retain his or her home, car and other important property.
Prior to filing, the individual will want to discuss options with an experienced attorney. Participation in a pre-bankruptcy credit counseling class is also mandatory. Once this has occurred, the attorney can then file a petition for bankruptcy. Soon after, a repayment plan can be presented. This repayment plan addresses how the individual plans to repay his or her secured and unsecured debts over a three to five year time period, and it requires approval by the court.
Chapter 13 bankruptcy offers the individual an opportunity to pay his or her debts in a manner that allows him or her to retain assets, pay debts and be able to make ends meet. Then, at the end of the repayment period, it is possible that some remaining debts may be discharged. Experienced legal counsel can assist the Tennessee resident in determining if Chapter 13 bankruptcy is the appropriate choice.
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]]>The post Eligibility requirements and Chapter 13 bankruptcy appeared first on William E. Maddox Attorney Law.
]]>The benefits of filing for Chapter 13 bankruptcy can be substantial. Depending upon the individual’s income, a three to five-year repayment plan may be approved by the court. During this time period, the individual makes regularly scheduled payments toward secured debt. The benefit is that these payments are based upon the individual’s available income and thus may lower the required payments. Additionally, debtors are prevented from collection attempts during this repayment period.
There are specific eligibility requirements for the Tennessee resident to be able to file for Chapter 13 bankruptcy. Specifically, the individual’s unsecured debts must be less than approximately $394,000 and his or her secured debts must be less than a little over $1,150,000. Additionally, the individual may not have filed for any form of bankruptcy during the preceding 180 days, and the individual must complete credit counseling from an approved agency.
Filing for Chapter 13 bankruptcy is a personal decision that the individual will likely want to discuss with legal counsel. The potential benefits often make it an easy choice. Perhaps, even more important is the relief that can be offered once the individual realizes that there is hope for his or her financial situation.
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]]>The post Tennessee Homestead Exemption Simplified and Increased appeared first on William E. Maddox Attorney Law.
]]>Tennessee homeowners under the age of 62 with no minor children living in the home currently only receive an exemption of $5000; joint owners, $7500. The homestead exemption increases only if the filer has a minor child living in the home; $25000 for a single individual with at least one minor and $50000 for a married couple with at least one minor child in the home. Most bankruptcy filers do not qualify for the increased exemptions allotted for those individuals over 62 years of age.
Several of my clients were impaired by this low exemption due to the real estate boom or ‘bubble’ in the East Tennessee area in recent months. Cases that previously would have gone through with ease, were being scrutinized heavily regarding the value of the home ending in several clients having to pay the trustee for the equity in the home or sell their home outright. (Homestead Exemptions by State 2021, 2021) https://worldpopulationreview.com/state-rankings/homestead-exemptions-by-state
State | Median Home Value | Homestead Exemption |
Tennessee | $231,600 | $5,000/$7500 |
Texas | $243,600 | unlimited |
Louisiana | $189,200 | $35,000 |
North Carolina | $242,200 | $35,000/$70,000 |
Georgia | $240,400 | $21,500/$43,000 |
(BestPlaces, 2021) https://www.bestplaces.net
Beginning January 2022, the homestead exemption for Tennessee will be simplified and increased.
The exemptions will be more of a one-size-fits-all. No longer will a homeowner have to have minor children living in the home to claim the higher exemption. The single homeowner exemption will increase from $5,000 to $35,000. The joint homeowner exemption will increase from $7,500 to $52,500.
Many homeowners with equity who had to file Chapter 13 bankruptcy in the past, would now qualify to file Chapter 7. This would benefit these homeowners with cheaper attorney and filing fees and eliminate the trustee administration fee. In most cases, they would receive a discharge from all unsecured debt (excluding taxes, domestic support, and student loans) without paying those creditors anything.
Also, the debtor’s time in bankruptcy would decrease from 3-5 years to 90-120 days.
Those homeowners that still need to file Chapter 13, either because their equity is more than the exemption or their mortgage or vehicle arrearages need to be included in the bankruptcy, will also benefit from the increased exemption. The amount of equity minus the exemption amount plays a role in determining how much one pays back to their unsecured creditors in Chapter 13.
So, you can see how this could affect how much a homeowner would have to pay into bankruptcy by $30,000 for a single filer.
To learn more about which bankruptcy option is best and how it can stop a debt cycle of taking out home equity loans to pay off debt, a homeowner may want to seek a thorough evaluation of his or her case.
This increase in the exemption can benefit many homeowners who are still struggling after the end of the federal foreclosure moratorium. Many who were not able to get home equity loans or pull money from other resources may have delayed looking into or pushing the button on filing bankruptcy because their equity was too high. Now, might be the time to reconsider.
Those having taken advantage of the moratorium or their mortgage company’s offer to delay or forbear their payments should consider their options in bankruptcy, as well. Mortgage companies can now begin the process of foreclosure causing an issue particularly for those allowed to only delay their mortgage payments, rather than modify their loan.
Contact our office as soon as your mortgage company begins talking about or sending you notices of default and foreclosure. We will be happy to look at your circumstances and discuss all your options.
The post Tennessee Homestead Exemption Simplified and Increased appeared first on William E. Maddox Attorney Law.
]]>The post Tennessee Homestead Exemption Simplified and Increased appeared first on William E. Maddox Attorney Law.
]]>Tennessee homeowners under the age of 62 with no minor children living in the home currently only receive an exemption of $5000; joint owners, $7500. The homestead exemption increases only if the filer has a minor child living in the home; $25000 for a single individual with at least one minor and $50000 for a married couple with at least one minor child in the home. Most bankruptcy filers do not qualify for the increased exemptions allotted for those individuals over 62 years of age.
Several of my clients were impaired by this low exemption due to the real estate boom or ‘bubble’ in the East Tennessee area in recent months. Cases that previously would have gone through with ease, were being scrutinized heavily regarding the value of the home ending in several clients having to pay the trustee for the equity in the home or sell their home outright. (Homestead Exemptions by State 2021, 2021) https://worldpopulationreview.com/state-rankings/homestead-exemptions-by-state
State |
Median Home Value |
Homestead Exemption |
Tennessee |
$231,600 |
$5,000/$7500 |
Texas |
$243,600 |
unlimited |
Louisiana |
$189,200 |
$35,000 |
North Carolina |
$242,200 |
$35,000/$70,000 |
Georgia |
$240,400 |
$21,500/$43,000 |
(BestPlaces, 2021) https://www.bestplaces.net
Finally, help is on the way!
Beginning January 2022, the homestead exemption for Tennessee will be simplified and increased.
The exemptions will be more of a one-size-fits-all. No longer will a homeowner have to have minor children living in the home to claim the higher exemption. The single homeowner exemption will increase from $5,000 to $35,000. The joint homeowner exemption will increase from $7,500 to $52,500.
What does this mean for the average Chapter 7 or Chapter 13 bankruptcy filer?
Many homeowners with equity who had to file Chapter 13 bankruptcy in the past, would now qualify to file Chapter 7. This would benefit these homeowners with cheaper attorney and filing fees and eliminate the trustee administration fee. In most cases, they would receive a discharge from all unsecured debt (excluding taxes, domestic support, and student loans) without paying those creditors anything.
Also, the debtor’s time in bankruptcy would decrease from 3-5 years to 90-120 days.
Those homeowners that still need to file Chapter 13, either because their equity is more than the exemption or their mortgage or vehicle arrearages need to be included in the bankruptcy, will also benefit from the increased exemption. The amount of equity minus the exemption amount plays a role in determining how much one pays back to their unsecured creditors in Chapter 13.
So, you can see how this could affect how much a homeowner would have to pay into bankruptcy by $30,000 for a single filer.
To learn more about which bankruptcy option is best and how it can stop a debt cycle of taking out home equity loans to pay off debt, a homeowner may want to seek a thorough evaluation of his or her case.
Federal Foreclosure Moratorium
This increase in the exemption can benefit many homeowners who are still struggling after the end of the federal foreclosure moratorium. Many who were not able to get home equity loans or pull money from other resources may have delayed looking into or pushing the button on filing bankruptcy because their equity was too high. Now, might be the time to reconsider.
Those having taken advantage of the moratorium or their mortgage company’s offer to delay or forbear their payments should consider their options in bankruptcy, as well. Mortgage companies can now begin the process of foreclosure causing an issue particularly for those allowed to only delay their mortgage payments, rather than modify their loan.
Contact our office as soon as your mortgage company begins talking about or sending you notices of default and foreclosure. We will be happy to look at your circumstances and discuss all your options.
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]]>The post Facing foreclosure? appeared first on William E. Maddox Attorney Law.
]]>If working with your mortgage provider is not producing desirable results, and strict budgeting is not improving your situation, there are a few legal options that will allow you to keep your home or, at the very least, avoid having a foreclosure on your record. One option would be lien stripping through bankruptcy. This is available to you if you have more than one mortgage on your property. By filing for bankruptcy, you may eliminate the excess mortgages, reducing your debt and allowing you to maintain your property.
Another option is applying for Chapter 13 bankruptcy. If approved, an affordable repayment plan will allow you to meet your debt obligations, which will keep you in your home. Finally, the last option that will be discussed is Chapter 7 relief. If approved, your full mortgage debt may be eliminated. This may require that you walk away from the property, but it will keep you from having a foreclosure on your record.
Debt relief options are out there. Only you can decide which would best serve you, but before you make that decision, you need to make sure you understand what each option can really do for you. An experienced bankruptcy law attorney will have the ability to review your case, explain your debt and foreclosure relief options, and help you pursue the route that makes the most sense for your situation. To learn more, please take a moment and visit our firm’s website.
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]]>The post 4 tips for rebuilding your credit after a bankruptcy appeared first on William E. Maddox Attorney Law.
]]>Your credit rating is a fluid number based on several financial factors. You can positively impact your score by paying close attention to your report and acting when necessary.
If you are seriously considering bankruptcy, you probably should have already filed. You will not do permanent damage to your credit score – but you will have to work to improve it. Follow these tips and avoid past mistakes to build a strong credit score after bankruptcy.
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]]>The post How to start rebuilding credit during bankruptcy appeared first on William E. Maddox Attorney Law.
]]>You may be hesitant to pursue bankruptcy, but it is often the only way to get finances back on track. It can truly help you in the long run, but in the short-term, it can drastically reduce your credit score. This can make it much harder to get a good loan rate. Fortunately, after the court approves the bankruptcy, you can immediately start taking steps to boost your credit score.
Budget any remaining debts
Bankruptcy is a useful tool for eliminating medical and credit card debts. However, it does not have the power to get rid of every type of debt. For example, bankruptcy cannot wipe out student loan debt. You may still have some bills to pay each month, so you need to budget accordingly. You need to determine what your minimum payments are and pay it off each month. During this time, you should avoid taking on more debt, so you should not make any purchases with a credit card or seek out a payday loan.
Keep track of your credit report
After you complete the bankruptcy proceedings, it will take a month or two for the credit bureaus to reflect that in your report. Once this time comes, you can get a free credit check. You can see just how much of a hit your score took and make sure there are no errors on your paperwork. In the event you do catch an error, then you need to bring it to the attention of the bureau immediately. You want to make your score as high as possible, and you do not need someone else’s mistake bringing you down.
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]]>The post You can pay down debt and get back on your feet financially appeared first on William E. Maddox Attorney Law.
]]>One option is to pay that debt off. You can start doing this with a financial budget. Start by paying for your necessities, then pay your legal obligations. With the money that is left over, start paying down your other debts, starting with those that have the highest interest rates. This will save you money in the long run, since the higher the interest rate, the more you’ll end up owing.
After you pay off debts with high interest rates, work on those such as your deferred loans. When your other debts are under control, it’s easier for you to start putting more money into paying down your student loans or other kinds of deferred payments.
If after taking these steps, you’re still struggling and aren’t able to meet your monthly obligations, you can negotiate with your creditors. You may be able to get a lower monthly payment or work to have your total amount owed reduced.
Our website has more information on debt management and what to do if you want to reduce your debts. You have a few choices to consider before you decide if bankruptcy is an option you want to take. If it is, we can help you file your petition for bankruptcy with the court.
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]]>The post If asked to define the word “budget,” many would probably say is has something to do with devising a plan appeared first on William E. Maddox Attorney Law.
]]>Consumer research studies that have been conducted in past years have shown that more than 60 percent admitted to having a budget in place. More than 77 percent said they’d give themselves either an C, D, or F in personal finance if asked to grade their performance in the subject. With such poor ratings, it would seem that many of us could benefit from setting up a monthly or yearly budget to better stay on top of expenses.
When creating a budget, the first determination you need to make is how much actual income you receive each year. This includes income you receive from traditional employment, freelance work, tax refunds, gifts or something else.
Next, you want to determine what your expenses are, both fixed and variable. Fixed expenses included amounts paid for bills such as mortgages and car payments. Varied expenditures include costs for utilities, groceries and gas that may fluctuate month-to-month.
It’s also important to account for periodic expenses that may be due once or twice at different points during the year. Property tax and car insurance bills are examples of these. These can easily creep up on you and can be quite costly, if not planned for.
Planning for the unexpected is a good rule of thumb to follow. Most financial planners recommend allocating as much as 10 percent of your income to an emergency fund should unanticipated car or home repairs, or medical bills arise.
Once you have properly documented both your income and expenditures, you are then able to take your expenses and subtract them from your income. Although, in doing this, you should be left with an excess of money to work with. If not, you should reassess your budget to see where any cost cutting measures can be made.
If you find yourself burdened by much higher bills than you can to pay within your budget, a Knoxville, Tennessee, bankruptcy attorney can share valuable insight.
Source: mydccu.com, “Money management: budgeting,” accessed April 12, 2017
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]]>The post Stopping contact from creditors and seeking debt relief appeared first on William E. Maddox Attorney Law.
]]>There are laws in place that protect the rights of consumers who owe creditors. These rules limit the actions of creditors and what methods they use to contact debtors. However, some believe that the Consumer Financial Protection Bureau could propose new rules that would change these protections. It’s possible that at some point in the future, creditors could text people or email them to collect money.
Right now, consumer protection rules are not very clear regarding the use of text messages. Some people express concerns that debt collectors may be able to send an excessive number of text messages. However, supporters of the potential rule changes state that younger generations are more apt to send payment or respond when contacted by text or even email. Phone communication is not as effective as it used to be.
Consumers who are dealing with any type of contact from creditors may want to learn more about their legal options and how they can make it stop. Seeking debt relief through bankruptcy can allow a Tennessee consumer to deal with his or her debt once and for all. This step will also halt all types of continued contact from creditors and debt collectors.
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