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Cleveland TN Bankruptcy Law Blog

A closer look at Chapter 13 bankruptcy

Struggling with debt can be overwhelming. Chapter 13 bankruptcy is one option that is available to provide relief from the stress associated with overwhelming debt. Chapter 13 bankruptcy is considered a 'reorganization bankruptcy' that allows the filing party to reorganize his or her debt to repay it according to a more manageable repayment plan. The debts will be repaid over a period of time, typically three to five years depending on certain circumstances, rather than selling property to repay debts, which is commonly associated with a Chapter 7 bankruptcy.

Because Chapter 13 bankruptcy provides for the repayment of debts according to a schedule determined in the repayment plan, the filing party must have a regular and reliable income that is able to repay the debts in order to apply for Chapter 13 bankruptcy. In addition, certain debt limits are in place, and are important to be familiar with, when filing for Chapter 13 bankruptcy. As part of the process, the filing party must attend credit counseling and pay a fee to apply.

Tennessee-based restaurant chain files for Chapter 11 bankruptcy

Business bankruptcy provides an option to help struggling businesses through a difficult time. Tennessee steakhouse chain Logan's Roadhouse recently filed for Chapter 11 bankruptcy protection. The restaurant chain plans to restructure and close restaurants that are performing poorly. The restaurant chain has experienced years of declining sales, and has seen a reduction in customer traffic. The bankruptcy filing is said to be representative of a trend in the restaurant industry away from traditional dining. Several restaurant chains have filed for bankruptcy, faced closures, have rebranded or experienced other challenges.

The company saw a 10 percent decline in revenue towards the end of 2015 down to $131.3 million. The company's bankruptcy filing noted an additional 4 percent drop in the first half of 2016 and an 8.8 percent drop in customer traffic during that same time period. As part of the restructuring, the restaurant chain plans to enhance the experience of its customers in the restaurants that will remain open, with the expectation that consumers are seeking less expensive and quicker dining alternatives.

Different options are available when struggling with medical debt

Education for struggling consumers regarding medical debt and bankruptcy can be helpful across the country. Medical bills are a leading reason consumers file for bankruptcy. In fact, more than half of all personal bankruptcies are due to medical debt. When medical expenses are a significant portion of overall expenses, it is important that struggling consumers are familiar with the different options available to them, including bankruptcy options.

Medical debt can be a significant concern, and struggle, for the majority of Americans in some communities. The Consumer Financial Protection Bureau reports that 20 percent of Americans will be turned over to medical collections during the current year. In some states, for example, one community resource center for struggling consumers might report 7 in 10 consumers who come to them seeking assistance have medical debt of some nature. It seems to be problem regardless of the whether the individuals are insured or not One representative reported, in fact, that the majority of consumers they help who are struggling with medical debt have insurance.

What should I expect when filing for Chapter 11 bankruptcy?

If you have considered different bankruptcy options for your business, and may be considering Chapter 11 reorganization bankruptcy, you may wonder what to expect from the process. The initial process is similar to any bankruptcy; once the filing party has filed for bankruptcy, an automatic stay is put in place to prevent any further creditor collection actions while the bankruptcy process progresses.

In particular, a Chapter 11 bankruptcy is a business bankruptcy option that allows the business to reorganize its debts and continue to operate, unlike a Chapter 7 liquidation process. As a consequence, of course, the processes are different. The Chapter 11 option allows the business to continue to operate during the bankruptcy process while developing a reorganization plan for debts. Approximately 20 to 40 days following the filing of the bankruptcy petition and submission of required schedules, the first creditor meeting is held. Questions will be asked concerning the company's assets and liabilities and income and expenses.

Tennessee has the highest number of personal bankruptcies

While Tennessee's economy is healthy, a recent report revealed that it also leads the nation in personal bankruptcy filings. From the beginning of April 2015 to the end of March 2016, Tennessee had the highest rate of personal bankruptcies in the United States at a rate of rate of 553 filings per 100,000 residents. The median for the same time period in the U.S. was 224 filings per 100,000 people.

Personal bankruptcy rates depend on several factors, including median income and consumer protection laws in the state. States with fewer consumer protections tend to see more bankruptcy filings, including filings to protect household goods and wages. Fortunately, there are several bankruptcy options that can help struggling consumers enjoy a fresh financial start and future.

Tennessee-based restaurant chain files for Chapter 11 bankruptcy

Business bankruptcy is available to provide helpful options for companies seeking to return to a successful history. A Tennessee-based restaurant recently announced it was filing for bankruptcy and closing 18 of its 25 restaurants in Tennessee. The plan to close underperforming restaurants is part of an overall plan to improve the financial performance of the restaurant chain. The company filed for Chapter 11 reorganization bankruptcy. The parent company for the restaurant chain has secured $25 million in bankruptcy financing for the restructuring plan.

The restaurant chain had a difficult first half of 2016. Foot traffic for the chain fell by nearly 9 percent and sales fell by 4 percent. As of last October, the restaurant chain had $525.4 million in liabilities and $12.9 million in cash. The bankruptcy filing provides that the restaurant chain has 25,000 creditors, $416 million in debts and an estimated $100 million to $500 million in assets. The restaurant chain also operates restaurants in other states.

What are Chapter 7 bankruptcy exemptions?

If you are considering Chapter 7 bankruptcy, you may be concerned about what the liquidation process entails. In general, Chapter 7 bankruptcy is considered a liquidation bankruptcy for those who qualify to liquidate non-exempt assets to repay debts and enjoy a fresh financial start. Because of the importance of bankruptcy exemption protections, you may wonder what they are, what they mean and how they may impact your bankruptcy process.

The idea of bankruptcy can create some uneasiness and concerns related to a home, car or other assets. It is important to understand that, although the bankruptcy process provides a fresh financial start, it does not necessarily mean starting from scratch following it. Bankruptcy exemption protections are an important part of the bankruptcy process designed to protect the filing party and some categories or property they may own. For instance, homes and cars enjoy bankruptcy exemption protections but are subject to certain value limits or caps. Personal property, including clothing, jewelry, home furnishings and other items, may also be exempted but sometimes value limits may also apply.

Bankruptcy options can help stop wage garnishment

Being overwhelmed by debt is stressful enough but added stress and strain because of wage garnishment may feel unbearable to individuals struggling with debt. Wage garnishment occurs when a creditor has filed a lawsuit to recover a debt and has successfully obtained a judgment against the party owing the debt. Once the judgment is in place, and their wages are being garnished, the party owing the debt may face increasingly difficult struggles paying their bills and keeping up on their debts.

It is important for individuals struggling with debt to understand that different options may be available through the legal process to help them, including with wage garnishment. Bankruptcy may be one option to consider. Bankruptcy can be helpful in several ways but after a bankruptcy petition is filed, an automatic stay can help stop creditor collection actions. This can stop creditor actions from proceeding or any new ones from beginning altogether. Wage garnishment can be prevented, stopped and, in some instances, reversed.

Help avoiding foreclosure through the bankruptcy process

Protecting a family home from foreclosure is a serious and stressful concern for many families and homeowners, including in Tennessee. There are ways that the bankruptcy process may help. One option may be the Chapter 13 bankruptcy process that, in addition to helping struggling individuals reorganize their debt, can also potentially provide options to help avoid foreclosure.

For individuals with overwhelming debt burdens, the daily stress can be significant. The Chapter 13 bankruptcy process may be available to individuals who have a reliable source of income to enjoy relief from foreclosure and relief from debt. The Chapter 13 bankruptcy process allows a filing individual to reorganize their debt into more manageable payments so that they can repay their debts according to a repayment plan developed with the help of the bankruptcy court and approved by the bankruptcy court.

What is Chapter 7 bankruptcy?

Chapter 7 bankruptcy is a bankruptcy option for individuals who qualify. You may have heard of Chapter 7 bankruptcy but wondered who qualifies and how you file for Chapter 7 bankruptcy. To file for Chapter 7 bankruptcy, the filing party must file a bankruptcy petition and also provide a schedule of assets and liabilities, a schedule of income and expenditures, a statement of their financial affairs and a schedule of executory contract and leases that have not expired. A copy of the filing party's most recent tax return must also be provided.

Additional documentation is required from filing parties with primarily consumer debts. The court uses the means test to determine if the filing party qualifies for Chapter 7 bankruptcy which provides that their income is equal to, or less than, the median income in their state. Once the filing party has filed for bankruptcy, an automatic stay goes into effect that prevents creditors from pursuing any collection actions during the bankruptcy process.

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