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Cleveland TN Bankruptcy Law Blog

How can Chapter 7 bankruptcy help?

In general, bankruptcy options are available to help protect individuals from overwhelming debt. Chapter 7 bankruptcy is one option for individuals who qualify under the means test that can help them enjoy debt relief and a fresh financial start and future. Chapter 7 bankruptcy allows an individual filing for bankruptcy to eliminate debts by liquidating non-exempt assets to repay them.

Though Chapter 7 is a liquidation bankruptcy process, some assets are exempt from the bankruptcy process during a Chapter 7 bankruptcy. Exempt assets are assets that fall into certain categories, or a wild card category for assets that do not fit into other categories or exceed the limit allowed, and are subject to certain limits. The Chapter 7 liquidation bankruptcy process begins with the filing of a bankruptcy petition. Once the filing party has filed a bankruptcy petition, and automatic stay goes into effect that protects the filing party from collection actions by creditors while the process proceeds.

Two Tennessee long-term care facilities enter business bankruptcy

Two long-term care operators in Tennessee recently announced that they are voluntarily filing for Chapter 11 bankruptcy protection. The long-term care companies will continue to operate the businesses as debtors in possession during the reorganization bankruptcy. They will retain the same management and staff to continue to run the businesses and provide for residents. In a statement, a representative announced a commitment to continuing to provide high-quality care to residents.

The representative further noted that the decision to file for Chapter 11 reorganization bankruptcy protection was a business decision that will allow obligations to be restructured and will provide the best option for the company to return to profitability and continued success. Chapter 11 bankruptcy is a business bankruptcy option that allows for a business to continue to operate while it restructures to help ensure the future success and continued operation of the company.

Understanding the homestead exemption in Tennessee

A previous post here discussed exemptions that may protection certain property from the bankruptcy process for Tennessee residents who have filed for a Chapter 7 liquidation bankruptcy, allowing the filing party to liquidate non-exempt assets to repay creditors and enjoy debt relief. The homestead protection, which may provide both state and federal protections, is an important protection for many filers to be aware of.

In most states, a portion of the homeowner's property can be declared exempt from the Chapter 7 bankruptcy process, which helps filers protect a family home. The homestead exemption can be used to protect a family home from creditors and a forced sale during the Chapter 7 bankruptcy process. In Tennessee, a filing party can commonly designate up to $5,000 of the value of the property for exemption as a homestead; the number increases to up to $7,500 if more than one filing party is involved, such as spouses. If the filing party has custody of at least one minor child, they may claim an exemption up to $25,000.

Business bankruptcies continue to increase year-over-year

Business bankruptcy filings increased by 21 percent in October for United States businesses when compared to the same month a year ago. There were a total of 3,023 business bankruptcy filings in the U.S. in October of 2016, while the number of business bankruptcy filings for 2015 was 2,491. October of 2016 also marked 12 consecutive months in a row that saw a year-over-year increase in business bankruptcy filings.

A representative for the American Bankruptcy Institute noted that American businesses are continuing to utilize the protections of business bankruptcy as an option when struggling during a difficult financial period. Tennessee ranked as the state with the highest per capita filing rate. The business bankruptcy process provides different bankruptcy options to help struggling businesses. Bankruptcy options are available to businesses and consumers alike based on their needs for the process.

Personal bankruptcy options may help stop wage garnishment

Struggling with debt can be overwhelming enough without the added stress of wage garnishment. When a judgment for a debt has been obtained, it is likely that the party against whom the judgment is being enforced will be subject to wage garnishment. Personal bankruptcy options provide resources to help stop collection actions and prevent additional collection activity, including wage garnishment in some circumstances.

When a bankruptcy petition is filed, such as for Chapter 7 bankruptcy, an automatic stay goes into effect which prevents additional collection actions and stops those in progress. This may provide relief and stop wage garnishment for a party struggling with debt. In some circumstances, in addition to stopping the wage garnishment, some of the wages already garnished may be recovered.

Tennessee-based restaurant chain bankruptcy continues

Commercial bankruptcy options may provide beneficial resources and tools to struggling companies seeking to perform well once again. The commercial bankruptcy process for the Tennessee-based restaurant chain, Logan's Roadhouse, currently continues. The restaurant chain filed for bankruptcy earlier this summer, listing $347.2 million in assets and liabilities of $546.1 million. The restaurant chain expects to emerge from bankruptcy later this year after is has renegotiated leases and shed $300 million in debt.

The restructuring process has included closing 34 of the restaurant chain's 256 restaurants.

Understanding the role of creditors in a business bankruptcy

A previous post here discussed business and commercial bankruptcy filings. One important aspect of the Chapter 11 business and commercial bankruptcy process is working with creditors and the meeting of the creditors. Once a petition for bankruptcy has been filed, a temporary stay goes into effect which prevents creditors from pursuing any collection actions. This period of time allows for the reorganization plan to be developed and contracts and leases with creditors can be renegotiated.

Creditors usually have an incentive to work with the filing party because if the filing party were to file for Chapter 7 liquidation business bankruptcy the creditors usually would not fare better than under a Chapter 11 business bankruptcy. Creditors are placed in different classes related to the handling of their claims. First priority is given to state and federal taxes owed, employees who are owed money and stockholders. Each is placed in their own class, as is true of each secured creditor. Unsecured creditors are all placed in one class. The reorganization plan may modify the amounts owed and repayment terms related to these creditors.

Commercial bankruptcy filings increase

It was recently reported that commercial bankruptcy filings have increased year-over-year, however, total bankruptcy filings declined for the first 9 months of the year and during September alone. The number of commercial bankruptcy filings for the first 9 months of this year increased 28 percent over filings for the first 9 months of 2015. In total, there were 28,789 commercial bankruptcy filings for the first 9 months of this year and 22,444 for the first 9 months of 2015.

Filings for Chapter 11 commercial bankruptcy increased 5 percent during the first 9 months of 2016 totaling 4,311 filings compared to 4,091 during the first 9 months of 2015. Business bankruptcy filings overall increased 38 percent from 3,072 in September of 2016 compared to 2,219 in September of 2015. Chapter 11 bankruptcy filings increased 8 percent from 337 in September of 2015 to 364 in September of 2016. Leading states with the highest per capita bankruptcy rate for the first 9 months of 2016 include Tennessee with a rate of 5.67 when considering total filings per 1,000 population.

What are bankruptcy exemptions?

Filing for bankruptcy can be a fearful time, but it does not necessarily have to be. Individuals filing for bankruptcy relief may have concerns about their home, cars and personal property but it is important to understand that the bankruptcy process provides important protections for filers seeking debt relief. Chapter 7 bankruptcy is considered an asset liquidation bankruptcy that allows the filing party to liquidate assets to repay their debts. However, some assets are exempt from the process.

Chapter 7 bankruptcy provides a fresh financial start for filing parties through the ability to liquidate non-exempt assets to repay debts and any remaining debts are then discharged through the bankruptcy process. Certain categories, and types, of property, however, may be exempted from the liquidation process. There are both state and federal exemptions and it is important to be familiar with the exemptions in your state and the exemptions that can help you protect the assets you are seeking to protect.

Personal bankruptcy options may help avoid foreclosure

When faced with losing a family home, it is important to be familiar with options that can help. Personal bankruptcy is one option that may allow homeowners facing foreclosure to avoid losing their homes and enjoy debt relief. Many people make a diligent effort to pay their bills, yet still fall behind and find themselves facing the stress of past-due bills and overwhelming debt. There are different options that may help with foreclosure, and personal bankruptcy is one to consider.

Chapter 13 bankruptcy may help a struggling homeowner, with a reliable source of income, reorganize his or her debt and avoid foreclosure, however, it is important to act as soon as possible. Filing for bankruptcy causes an automatic stay to go into effect which will halt creditor collection actions against the filing party. At that point, the filing party may be able to bring past due home loan payments current over time. Overall, Chapter 13 bankruptcy provides the filing party with the opportunity to reorganize his or her debt into a manageable repayment plan and possibly avoid foreclosure.

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