Obvious Things About Bankruptcy In Tennessee

Mar 12th, 2014 | By | Category: Info

When it comes to bankruptcy, many people associate it with a total absence of money. However, contrary to popular belief, filing for bankruptcy doesn’t necessarily mean that you dont have any money. Bankruptcy is nt associated with a total lack of assets; it s associated with insolvency. This is an inability to address your financial obligations.

Basically, two scenarios define bankruptcy according to the law. One is the scenario in which someones liabilities exceed his assets. The other is one in which person is simply unable to pay his debts. If either scenario applies to you, you could qualify to file for bankruptcy.

Blacks are about twice as likely as whites to wind up in the more onerous and costly form of consumer bankruptcy as they try to dig out from their debts, a new study has found. The disparity persisted even when the researchers adjusted for income, homeownership, assets and education. The evidence suggested that lawyers were disproportionately steering blacks into a process that was not as good for them financially, in part because of biases, whether conscious or unconscious. The vast majority …

Bankruptcy itself either relieves you of your debt (as in a Chapter 7 bankruptcy), or it enables you to deal with your debt in a different way (as in a Chapter 13 bankruptcy). Whether you qualify for Chapter 7 or Chapter 13 bankruptcy will rely on the amount of your debt, your income (if any), and your potential ability to repay your debts. In neither case you’ll be completely without money or assets unless, of course, you had no money or assets to begin with.

In order to determine whether Chapter 7 is appropriate for you, your attorney will need to look at your total amount (and types) of debt and whether or not you get a steady source of income. If you’re employed or have other source of income, you may qualify instead for Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, your debts are consolidated into one monthly payment. While Chapter 13 does nt rid you of your debts, it makes it easier for you to repay them and can contribute to protect your credit.

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The amount of personal and real property you’re allowed to keep is contingent on the state in which you live. While some states allow large exemptions, others only allow a few thousand dollars. Because the rules vary so widely from state to state, many individuals who file for bankruptcy choose to do so in a state that has relatively high exemption amounts.

What do people think about this study on bankruptcies?
Study: Bankruptcy Rates Reflect Policy, Not People http://byunews.byu.edu/archive09-Jun-bankruptcy.aspx What do high bankruptcy rates in states like Tennessee and Utah tell us about the people that live in those places? Not much, according to a new 50-state bankruptcy study published in the Journal of Law and Economics. The study, by Brigham Young University economists Lars Lefgren and Frank McIntyre found state-to-state differences in bankruptcy rates are mostly explained by bankruptcy laws, differences in legal institutions, and broad demographic factors. “Our findings don’t say much at all about the people involved in bankruptcies,” said Lefgren. “In large part, we found that there are different state policies that affect how people respond to financial crises.” Bankruptcy rates vary widely from state to state. Alaska traditionally has one of the country’s lowest filing rates—an average of one bankruptcy per 1000 individuals from 1999 through 2000. During that same period, the rate in Tennessee, the highest bankruptcy state, was nearly eight times higher. Texas had a rate of three per 1000, but right next door in Oklahoma, the number was double that. Until now there had been very little research on why these numbers vary so much, according to Lefgren and McIntyre. “Press reports on this have often focused on people,” Lefgren says. “What makes the people in high bankruptcy states so different than people in low bankruptcy states? Are they just strange or especially flaky about their debts?” Not so, the study found. Lefgren and McIntyre’s analysis of bankruptcies in all 50 states from 1999 to 2000 found that the best predictor of a state’s filing rate is that state’s wage garnishment law. Some states have laws that make it more difficult for creditors to dip into a delinquent debtor’s paycheck. These states tend to have lower bankruptcy rates, the study found. “If a state limits a creditor’s ability to garnish wages, it’s easier for the debtor to ignore the debt, creating an informal default rather than a bankruptcy.” Lefgren explains. “But when someone gets slapped with a garnishment, he may be more likely to declare bankruptcy to get out from under it. The result is a larger number of bankruptcies in states where it’s easier to garnish wages.” Another factor that increases a state’s bankruptcy rate is the fraction of filings under Chapter 13 of the bankruptcy code rather than Chapter 7. Chapter 13 bankruptcies put filers on a payment plan designed to pay back at least a portion of their debts. Chapter 7, on the other hand, generally wipes out debt completely. In most Chapter 13 cases, the filers are unable to keep up with the payment plan, so the bankruptcy is dismissed. At that point, the debtor often files for bankruptcy again. “So in states where people are pushed toward Chapter 13, we have families filing for bankruptcy multiple times,” Lefgren says. “People are being counted in the bankruptcy statistics multiple times for the same debts.” So in reality, Lefgren says, the bankruptcy rate is not a terribly good indicator of default on debt. The amount of unpaid debt might be fairly similar from state to state, but in one state it goes on the books as a bankruptcy, while in another it remains an informal default. Meanwhile, in many states, bankruptcy rates are inflated by multiple Chapter 13 filings. Taken together, garnishment laws and the fraction of Chapter 13 bankruptcies account for more than half of the state-to-state variation in filing rates. While most state variation can be attributed to policy differences, the study did find several broad demographic factors that influence bankruptcy rates, such as age and income. Filing rates tend to be higher among those age 25 to 29, with household incomes between $30,000 and $60,000. States with larger concentrations of younger, middle class people tend to see higher bankruptcy rates. Lefgren and McIntyre found that other factors, such as asset exemption rates, often touted to explain bankruptcy rates actually have little influence at all. States that allow filers to keep large proportions of their assets through bankruptcy don’t necessarily have higher bankruptcy rates, the study found. Another factor that doesn’t seem to matter: the size of the public safety net. Generous welfare, housing assistance and unemployment compensation programs seem to do little to mitigate a state’s bankruptcy rates

  • So…they did a study on bankruptcies and find out that studying bankruptcies were a poor way to study the cause of bankruptcy…brilliant. I could have told them that people who can't get out of paying debt would file bankruptcy more than people who can avoid paying debts.

  • The real property exemption amounts in Tennessee are 000 for an individual, $5, and $7, 500 for a married couple. Some exceptions to this rule allow for greater exemptions for those people over 62 and for single parents. The real property exemption (or homestead exemption) is intended to enable you to stay in your house after your bankruptcy. This exemption, however, only applies to your primary residence. So, if you re filing for Chapter 7 and happen to own more than one home, you’ll only be allowed to retain the home in which you live the majority of the time.

    Most Chapter 7 cases are no asset cases. That is, usually no assets are available above the debtors exemption amounts. In the few cases where some nonexempt assets are left, those assets will be distributed in line with the priorities defined by the bankruptcy code. Domestic support and back taxes are paid first, then medical bills, credit cards, and other debts. Most creditors won’t receive 100 per cent of what theyre owed. Instead, they’ll receive only a part of that amount. The exact distribution will be determined in accordance with the court.

    When filing for a Chapter 13, your money and your assets remain largely under your own control. In fact, you can only qualify for Chapter 13 bankruptcy if you’ve got a steady income. A Chapter 13 can result in a discharge of some debts that aren’t fully paid in the repayment plan. The payment plan is intended to repay your creditors within a specified time frame, up to five years. This is accomplished by consolidating your debts and enabling you to make a single monthly payment.

    Debt relief comes in a somewhat different form in a Chapter 13 bankruptcy, on the other hand. Chapter 13 is most appropriate for a man who is earning an income but, for some reason, has amassed a large amount of personal debt and has fallen behind on payments. When you file for a Chapter 13 bankruptcy, your debt is consolidated and youre given a payment plan.

    Your Chapter 13 payment plan is advantageous for a variety of reasons. First, the plan makes your debt more affordable on a month to month basis. Because your debt is consolidated, youre no longer responsible for paying several bills each month. Instead, you’ll make a single payment, the amount of which will be given in your income and necessary living expenses. Second, your payment plan spreads your debt out over a long period of time, normally from three to five years. This lowers your monthly obligation substantially and enables you to keep more of your income. Having more income to be paid for your living expenses helps keep you from incurring additional debt while youre paying off your existing creditors, thereby stopping the cycle  so you can go back on your feet.

    Chapter 13 bankruptcy provides relief by allowing you to pay back your debts and improve your credit. It simply changes your situation from one in which you cant meet your monthly obligations into one in which you can. This also means that the set of your debt will be provided from your income, not from the disposal of any of your assets. Chapter 13 also enables you to keep real property, even though it isn’t your primary residence, so long as you continue to fulfil your obligations under your Chapter13 payment plan.

    Sometimes, the payment will come in the shape of a payroll deduction. The amount of the payroll deduction will be determined according to your income and the state in which you live. In exchange for being allowed to retain control of your property, you’re required to repay your creditors at least as much as the total amount of all of your nonexempt personal property.

    If youre considering filing for bankruptcy, an attorney can assist you better understand what your financial picture will look like after your bankruptcy. While you certainly wont be wealthy after a bankruptcy, in most cases, you wont be completely broke either. Understanding your obligations under each type of bankruptcy and your states exemption amounts can help you decide whether bankruptcy is the right thing for you.


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