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Many Tennessee foreclosures tied to reverse mortgages

We are now more than 10 years removed from the housing market collapse that set off the Great Recession, and the dust is still settling. Though the economy has improved in many ways, many Tennessee residents are still struggling with mortgages and other forms of debt.

Fighting wage garnishment

When you're deep in debt, it can feel like an impossible situation. You may have fallen behind on credit card bills, medical bills or other debts, but you're working and trying to save up the money to pay off your unpaid balance. And then, you see that one of your creditors is not going to wait. It has already started taking a chunk out of your take-home pay through wage garnishment.

The advantages of reaffirming a debt in a Chapter 7 bankruptcy

Most people in Eastern Tennessee think of bankruptcy as a method of discharging their obligation to pay back certain debts. Many people resist the idea of filing a bankruptcy petition because they are afraid that they will lose valuable possessions, most significantly, the family home. While understandable, this fear overlooks an important feature of the bankruptcy code: debt reaffirmation.

Reviewing Tennessee's bankruptcy exemptions

Many people in eastern Tennessee who are contemplating bankruptcy are unaware of how the state's list of bankruptcy exemptions can help them. Under federal bankruptcy law, states are given the choice of requiring debtors to select either federal prescribed exemptions or accept the state's list. Tennessee has passed legislation requiring debtors to use the state's list of exemptions and precluding anyone from selecting exemptions from the federal list.

What is the Chapter 7 "means test"?

When people in Eastern Tennessee consider bankruptcy, one of the first questions they ask is whether they should file under Chapter 7 or Chapter 13. Under Chapter 7, many of the family's debts will be discharged, that is, the debt will never have to be repaid in full. Under Chapter 13, the debtor files a plan under which all existing debts will be paid over time and the total balance due may be reduced. Many people naturally find Chapter 7's discharge procedure to be an attractive alternative, but not everyone is eligible to file under Chapter 7. In 2005, Congress, fearing that too many debtors with reasonable incomes would choose Chapter 7, imposed what is called a "means test." The means test is intended to ensure that persons with above-average incomes cannot use Chapter 7.

Mortgage modification firm settles charges of lending abuse

Many residents of Tennessee suffer from financial difficulties have attempted to modify their home mortgages to forestall both foreclosure and Chapter 7 bankruptcy. Unfortunately, some firms offering mortgage modification services attempted to take advantage of persons who see mortgage modification as a pathway to financial health. A recent settlement between Massachusetts and a large non-bank lender shows some of the abuses that borrowers may face.

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