Debts in Bankruptcy: What the Fate has in Store for Them

Debts in bankruptcy: What the fate has in store for them

When filing for bankruptcy, be it Chapter 7 or Chapter 13, it is important for you to know the fate of your debts and how to deal with them accordingly.

What do you understand by the term ‘priority debts’?

Almost all of your debts can be included in your bankruptcy case. But, as per the Bankruptcy Code not all that you include in your petition for discharge will be entertained or for that matter will be obliged by the competent court of law. Debts that will not get discharged and for which you’ll remain liable to pay back are known as priority debts. The reason is that they enjoy greater priority over other lines of credit.

In the case of a Chapter 7 bankruptcy, your priority lenders will be in the forefront when the proceeds from the asset liquidation occurs and hence, will get their share of the pie ahead of all the other creditors. Interestingly, these are such a kind of debt that they don’t even get discharged, even in cases where you may have no asset to liquidate with which to pay them off. This is why in Chapter 13 bankruptcy cases, it is mandatory to provide a detailed debt repayment plan to the court through which you are planning to pay off your priority debts.

Examples of priority debts

Here are some priority debts of which you’re probably aware of:

  • Penalties, fines, and other outstanding fees owed – Some of the instances of these financial liabilities are fines slapped on charges of overdue speeding tickets, tax penalties, vehicle registration fees and so on will not be discharged by the bankruptcy court.
  • Home loans, car loans and other secured loans – Loans (mortgage, car loan, etc) that originate in exchange of an asset pledged as collateral to buy a home or a car are called secured loans. These secured loans can have your home or your favorite car repossessed in case of repeated payment default. If you file for Chapter 13 bankruptcy protection, then secured loans will be restructured such that all the outstanding payments, fines, and penalties are included in the modified repayment plan.

However, if you’ve opted for Chapter 7 bankruptcy, then you may be allowed to keep your asset, provided you have the necessary financial resources to catch up with the missed payments. And not only that, you’ll have to be consistent in making the monthly repayments to hold onto your asset long after your bankruptcy case is complete.

  • Debts incurred due to malicious or harmful behavior – It may happen that you’ve incurred debts because you willfully inflicted injury on other people or to their properties. In that case, if a court has directed you to pay up for the damages caused by you due to the intentional injury you brought upon your victims or to their assets, then those obligations will not go away. This includes damages caused to public or private properties due to rash/negligent driving or worse, driving under the influence of intoxicants.

No matter what type of bankruptcy protection you ask for, these debts simply won’t be discharged, rather they’ll be restructured with other priority as well as secured debts and can be included into your Chapter 13 bankruptcy repayment plan, provided you’ve opted for one in the first place.

Tax debt – The proper timing for a discharge

The Internal Revenue Service (IRS) will forgive its due and you can obtain a complete discharge from your tax debts, only if you can fulfill the following conditions:

  • Your debt must have originated from income taxes and this doesn’t include in any way other financial obligations like payroll or sales tax.
  • You did not commit any kind of tax fraud such as tax evasion or filed fraudulent annual tax returns.
  • Your income tax debt must be minimum three years old. In case you’ve gotten behind in making your tax payments in the recent past, then you have the option to work out a suitable repayment plan or apply with the IRS for an Offer-in-Compromise (OIC) where, if you qualify, you’ll be allowed to pay less than the actual debt amount owed to Uncle Sam.
  • Your annual tax return paper that was generated as your income tax bill must have happened on time and should be 2 years old to say the least. It must be noted here that you are not allowed to postpone filing your annual tax returns for consecutively several years at a stretch and then put in your tax papers all in one year so as to claim bankruptcy protection from paying the outstanding taxes to the IRS and avoid a big financial hiccup.
  • Your tax debt must not have been assessed at least 240 days prior to submitting your bankruptcy petition in the court.

It’s best to come clean when dealing with the IRS, since they can put liens on your property for defaulting in tax payments – something that sticks on, even if you’ve been discharged of all your other debts in a bankruptcy. In Chapter 7, just because a debt is discharged does not mean that the lien is removed from your asset. There are some exceptions and strategies your attorney can do in order to remove in the lien or at least work with the creditor to compromise.

This post was contributed by Any Raybuck. He is a financial writer and personal finance consultant. He participates in quite a number of online communities and social media outlets to resolve people’s daily monetary queries and there he gives them crisp, straightforward answers that can easily be followed.


Bankruptcy and your credit report

A Bankruptcy Discharge on Your Credit Report Does Not Mean You Cannot Get Credit — Most Nashville Residents Receive Credit Offers Immediately

Many people share the common misunderstandings that a bankruptcy on your credit report is a lifelong scarlet letter that permanently ruins your credit and that it takes years to get any credit whatsoever after filing for bankruptcy. Unfortunately, too many people in Nashville presume that this is true and never speak to a bankruptcy attorney to get the facts. They continue paying overwhelming interest charges instead of ever getting out of debt and getting a fresh start.

Although Chapter 7 bankruptcies appear on credit reports for 10 years after discharge, it is not uncommon for people to be able to buy cars and even houses well within that period of time. The most important thing is to show creditors that you have learned from past mistakes and now use credit responsibly. The economic recession hit Nashville residents hard over the last several years has forced many people into filing for bankruptcy. Hiring a bankruptcy attorney has given them the fresh start that they needed.

Speak with an experienced bankruptcy attorney to give you the facts about bankruptcy law if you are in worried about your financial well being. Interest fees are piling up and compounding every month you wait to get help from a professional. Get the truth about bankruptcy from an expert that can help you make an informed decision about your best course of action.



How much does it cost to file for bankruptcy?

Deciding whether or not to file for bankruptcy is a difficult decision. There are some unexpected costs that arise during the course of a bankruptcy filing that many people do not anticipate. However, the costs are usually negligible compared to the amount of debt that people are looking to have forgiven. The decision about whether or not bankruptcy is right for you depends on whether the pros outweigh the cons for your particular circumstance. The best way to make this determination is to have a consultation with an experienced Nashville bankruptcy attorney.

The fees for filing are generally minimal for most people considering bankruptcy. The filing fee for a Chapter 7 bankruptcy is $335. Chapter 13 is $310, which is paid as part of the plan and is not an upfront payment. If you are unable to afford the fees, you may be able to get those fees waived if your income is far enough below the poverty line.

The fees for filing do not include attorney’s fees. Those will depend on whom you hire to represent you in the matter. It is always recommended to hire a skilled Nashville bankruptcy attorney to prepare your case if filing for bankruptcy. The difference that an attorney makes in presenting your case and negotiating settlements is more than worth even the most expensive attorney’s fees. You need someone that understands the exemptions and different types of debt that you wish to be discharged. And, the relatively small investment of filing and attorney’s fees is usually less than the interest payments alone for many debtors.

The real costs of filing from bankruptcy are the costs that are more indirectly incurred after filing for bankruptcy. Different life opportunities and some careers are negatively impacted by a bankruptcy on your record. You should speak with a knowledgeable bankruptcy attorney in Nashville before filing bankruptcy so that you know in advance what all of the costs are going to be. The ultimate goal is to give you a fresh start for your financial well-being.

Are Your Affairs in Order?

It is a big presumption to think that your affairs are in order if you have not met with an experienced estate planning attorney to make your plans known. Estate planning is complex, and certain rules must be followed or else your final wishes will be replaced with the state’s default rules for managing estates. Don’t leave your loved ones behind with a lot of undue stress and legal matters to contend with after your passing.

One of the newest issues for managing the affairs of planning your estate has arisen over the last couple decades as our medical technology has improved. We are now able to keep people in alive, but unconscious states for longer than ever before. Families are left in the painful position of having to decide whether their loved ones would w
)ant to be kept alive in that state. A Tennessee estate planning attorney can discuss all of the options for advance directives so that you can make an informed decision for your medical future.

Estate planning is not just about planning for the status quo—it is about anticipating the surprises and changes to come in the future. Having your affairs in order requires speaking with someone that has seen it all and is ready to guide you through all of the possible scenarios that you probably do not expect. It is not uncommon to find that the people that feel the most confident about having their financial affairs in order are the ones that are the least prepared for the possibilities that could make their current plans less feasible.

The adage that an ounce of prevention is worth a pound of cure especially rings true when it comes to estate planning. Unforeseen events and incomplete planning can lead to a lot of undue heartache for your loved ones. More unfortunately, it is usually too late to make changes after you realize that your planning has been incomplete. Skilled and experienced estate planning attorneys in Tennessee help you avoid making mistakes that lead to unintended consequences.

Your rights & options regarding debt relief

Facing a mountain of credit card or other forms of debt is not uncommon. Statistics show the average US household credit card debt stands at $15,252, while the average mortgage debt is $152,209, and the average student loan debt rests at $32,986.

But once you reach the conclusion that you cannot realistically pay back your debt by the traditional method, the question remains: what is your best option for debt relief? The answer varies as there are several choices for how to resolve your debt and regain your financial security.

One option is to talk with your creditors and discuss if they can work out a modified payment plan. Another choice is to partner with a credit counseling service that can help you and your creditors develop a debt repayment plan. These plans require that you deposit money regularly with the counseling services which then works with creditors to pay off your debt.

Consolidating your debt by taking out a second mortgage or home equity line of credit is another remedy. However, the Federal Trade Commission cautions that these options generally require your home as collateral and may not always be the best option. Bankruptcy may also be the final alternative if no other options are possible. There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each type of bankruptcy must be filed in federal bankruptcy court.

A qualified Nashville debt relief attorney can assist you in deciding which debt relief choice is best for you and your family. Experienced debt attorneys access your debt, discuss your options and work with you in starting your debt relief process. A also can inform you of all relevant laws and regulations that pertain to your credit and ensure creditors are fairly handling your situation.

When confronting substantial debt, it’s also imperative that you know your rights as a consumer. Debt collectors must adhere to strict federal rules about when they can contact you. For instance, a debt collector may not contact you before 8 a.m. or after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie or use unfair practices when they attempt to collect debts. And they must honor a written request from you to stop further contact.

Additionally, the Fair Credit Reporting Act states that consumer reporting agencies must correct or delete inaccurate, incomplete or unverifiable information in your credit file. As a consumer, you also have the right to dispute any information in your file and the consumer reporting agency must investigate your concerns.

Reasons Why You Need a Last Will and Testament in Tennessee

The adage that an ounce of prevention is worth a pound of cure is particularly true when it comes to estate planning in tennessee. Too many people in Nashville put off speaking with a Nashville estate planning attorney leaving their loved ones with a lot of unnecessary stress to go along with their grieving. Planning for your estate by executing a will can prevent families from being torn apart and let your loved ones sleep soundly in knowing that your final wishes are being carried out as you would have wanted.

Tragedies often happen unexpectedly, and families are left trying to guess at what the deceased would have wanted with their remains and their assets. Unfortunately, even telling your loved ones orally or in a hand written document is not always enough for Tennessee probate courts to issue orders after your passing. Most of the final wishes that people have cannot be carried out without a properly executed will.  An experienced Nashville estate planning attorney can make sure that your will is executed in accordance with Tennessee law to protect your interests after your passing.

Loved ones that pass away without a will can lead to families being torn apart by legal battles in probate courts. Families wind up fighting lengthy and emotional battles over everything from the division of assets to what should happen with your remains. The aftermath of the fighting in probate court leads to wounds that never heal. Some familial relationships never heal afterwards. The lack of estate planning puts your loved ones in a position where they become adversaries due to not knowing what your final wishes were.

It is in the best interest of you and your family to speak with a Nashville estate planning attorney if you have not formally executed a final will and testament. Doing so will minimize the emotional toll that your loss will have on them. A properly filed and executed will minimizes the stress of dealing with the aftermath of your passing and helps your family sleep soundly at night knowing that they abided by your final wishes as you would have wanted.

Things to watch out for when buying a used car in Tennessee

By: The Nevin Law Firm

Caveat emptor, or let the buyer beware, is an important principle to take into consideration when you are purchasing a vehicle. Although the state of Tennessee enacted a Consumer Protection Act, it is still much less stressful and time consuming to do proper due diligence upfront, to avoid unnecessary hassles. There are some important steps that you should take before buying a used car to minimize your risk of buying an unsafe vehicle or even a lemon.

Modern technology has made it significantly easier to do research and see what a used car has been through with previous owners. Has the vehicle been in an accident? Is it a lemon? Does it have a clear title? Services like Carfax are inexpensive and allow consumers to view the vehicle history before making a purchase. Reputable Nashville auto dealerships often provide the Carfax report to you free of charge.

Another technological resource at your disposal is internet search engines. You should search the make and model of the vehicle you are considering to see what consumer reports say about the car. Past recalls or histories of issues offer insight about what to look for and what to avoid.

Because the internet and Carfax are not 100% accurate, bringing the car to a trusted mechanic is a wise investment before making an expensive vehicle purchase. A trained mechanic will look for evidence of past accidents, structural damage, engine problems and electrical issues. Your mechanic helps ensure the vehicle will be dependable and safe and measures up to the dealerships claims.

Before finalizing a sale and signing the title, it is a good idea to read it first. Dishonest used car dealers can be misleading about the extent of damage to a vehicle that has been involved in an accident. It is illegal to sell a car with a salvaged title to a consumer who plans on driving the car, without full disclosure. If the buyer is not planning to drive it, but plans on fixing it, the vehicle can be sold, as long as the salvage title was disclosed. If a dealership has not properly disclosed a salvaged title, a consumer can return the car for a full refund.

Dealers may be slow to apply for a rebuilt title, or disregard it overall, as it requires filing specific paperwork and paying a fee. They have to provide photos of the damaged vehicle, shown both before and after repairs, outline details of the damage and the repairs and provide receipts for all parts and labor to verify the repairs were made. In addition, the state sends an investigator out to inspect the vehicle prior to assigning the new, rebuilt title.

The Tennessee Consumer Protection Act is a good last resort for car buyers that have been taken advantage of by dishonest Nashville car dealerships. However, you want to be vigilant prior to purchase. Taking a few simple steps before buying a vehicle can protect you from making a big mistake.

Nashville Consumer Protection Attorneys Hold Car Dealerships Accountable for Selling Unfit Vehicles

By The Nevin Law firm

Enforcing the Consumer Protection Act against dishonest auto dealers

When purchasing a used vehicle from a dealership, you have the right to know if that vehicle is in good working condition, been in a wreck or totaled, and that you are able to safely drive it. Tennessee law imposes strict penalties on car dealerships that put you and your family at risk by knowingly selling you a car that is potentially unsafe for regular driving. The consumer protection attorneys at The Nevin Law Firm in Nashville safeguard consumers who have fallen prey to unscrupulous used car dealers. We help right the wrong when dealerships violate your trust and the Tennessee Consumer Protection Act.

How does the Tennessee Consumer Protection Act help if a car dealership sells you a lemon?

Tennessee legislators enacted the Consumer Protection Act to protect car buyers from dealers that conceal the accurate histories of the cars they sell. When a car dealership violates the Act, you have the right to take legal action to recover monetary compensation. If you feel that you have been misled or taken advantage of by a Tennessee car dealer, speak with our Nashville consumer protection attorney. We will review your claim and determine your best course of legal action. The damages you can recover for a Consumer Protection Act violation in Tennessee include:

  • Amount paid for the car
  • Additional monetary damages, up to three times the price paid for the car
  • Attorney’s fees
  • Court costs

How do businesses violate the Tennessee Consumer Protections Act?

The Tennessee Consumer Protections Act places several duties on used car dealerships when it comes to vehicles that have been involved in an accident. Cars must be re-titled as rebuilt if the car was totaled out after an accident. Even classifying it as a salvaged title is a violation of the Act. Additionally, dealerships cannot knowingly mislead a customer concerning the history of the vehicle they are trying to sell. For example, a dealership is in violation of the Tennessee Consumer Protections Act if they tell you a car had only minor damage from an accident when in fact, the damage was severe enough for the vehicle to be totaled out by an insurance company. A knowledgeable Nashville consumer lawyer can help you get justice if you have been taken advantage of by a dishonest car dealership. Tennessee law clearly outlines your rights as a consumer when dealerships endanger you and your family with a defective vehicle.

Our Nashville consumer protection attorneys are on your side

At The Nevin Law Firm, our attorneys provide personalized attention and strong advocacy when you have been wronged. We take the time to listen to your dispute and help you determine the best course of action to recover compensation. Contact us online or call us at 615-244-7708 to schedule a free initial consultation. Our office is located in downtown Nashville, near the Tennessee state capitol, across the street from the Old Historic Courthouse. Ample parking is available.

Rebuilding your credit after bankruptcy

Rebuilding Your Credit After Bankruptcy is Possible

By: The Nevin Law Firm

If you have filed for bankruptcy in Tennessee recently, you’re not alone.  Statistics show nearly 1.2 million Americans went bankrupt in 2012 alone. But now that the process is over, how will you rebuild your credit?

Rebuilding your credit in Nashville is a common question after bankruptcy. Some assume their financial life is doomed for the next 10 years after filing. However, by taking a few tips into consideration, you can ensure your bankruptcy does not seriously damage your future credit.

One of the first steps is to get your credit report from the three primary credit bureaus. Make sure all debts included in your bankruptcy are in the report. Check closely for mistakes, such closed accounts with a status of open. If you find errors, dispute these with the credit agencies and make sure they are corrected.

Next, build some new credit. This may seem daunting and hopeless after a bankruptcy filing, but it’s possible – and necessary. Developing credit is an essential step in restoring your credit score. You can begin by obtaining a secured credit card. Because these cards require a deposit, most people are usually approved. Your new credit line will equal your deposit. At the same time, start an emergency fund. This means having at least three to six months of financial reserves in the case of an emergency.

Lastly, one of the most important parts of rebuilding your credit in Nashville after bankruptcy is paying your bills on time. Payment history consists of 35 percent of your credit score. Pay bills by the due date or before to begin racking up positive credit. In addition, strive to pay off credit balances each month and do not charge more than 30 percent of your credit limit.

With a little effort, time and dedication, you can build your credit back after bankruptcy and ensure your financial future is bright. If you are considering filing for bankruptcy protection, contact an experience Nashville bankruptcy attorney for sound legal guidance. Trust the bankruptcy attorneys at Nashville’s premier bankruptcy law firm, the Nevin Law Firm, to help you weather the storm. Our attorneys ensure you know every option available and how to best preserve your credit and protect your financial future. Contact us at (615) 244-7708 or online today

Tennessee Bankruptcy Exemptions

How Experienced Tennessee Bankruptcy Attorneys Can Leverage Federal Law and State Exemptions to Protect your Property and Assets

One of the biggest fears that our clients have when exploring bankruptcy with The Nevin Law Firm is losing their property and assets in the process. While there is inherently some risk that these things can become the subject of bankruptcy proceedings, there are certain protections in place under Tennessee law that, in many cases, can safeguard valued items. An experienced bankruptcy attorney can leverage these exemptions to your benefit, and reduce the risk that you will have to part with your home, car, future income, retirement, or other assets following bankruptcy.

Tennessee law provides those filing for bankruptcy with certain exemptions—in other words, property and assets that cannot be used to satisfy your debts. Any property that is not included in the Tennessee exemptions—property considered non-exempt—may be at risk during the bankruptcy proceeding. Fortunately for individuals navigating the bankruptcy process with a skilled attorney, the Tennessee exemptions can be leveraged so as to secure valuable property during and after bankruptcy.

In our experience, clients of The Nevin Law Firm are most often concerned with certain key property:

  • Family home—The thought of losing a house can be paralyzing, especially if you have a family whose wellbeing is tied to the home. Given the importance of your home, the Tennessee bankruptcy exemptions set forth a certain value in the home’s equity, up to which the property cannot be subject to seizure during the bankruptcy proceedings. The specific amount can vary depending on the ownership arrangement you may have with your spouse or others.
  • Vehicles—Automobiles have become essential to our daily life, and many people rely on them for work purposes, family reasons, and as the sole means through which to travel. While Tennessee bankruptcy laws do not contain an exemption specific to automobiles, there is a catchall category for any personal property. And, through this exemption, individuals going through bankruptcy can seek to exempt a certain amount of the value of their car, truck, or other vehicle.
  • Wages—The thought of obtaining a fresh financial start through bankruptcy may not seem promising if you fear that future income could be impacted. There is a wage exemption available under Tennessee bankruptcy law that limits the extent to which creditors in the bankruptcy process are able to access your future earnings to satisfy your present debt. There are several wage exemption options that an attorney knowledgeable in bankruptcy laws can put to work for your benefit, depending on income level and number of children.
  • Pensions—Protecting retirement savings is a key concern of those going through bankruptcy, as these are often what individuals and families rely on to support themselves through older age. To safeguard against stripping individuals of these hard-earned savings, federal and state law generally provide comprehensive coverage for a variety of individual retirement accounts, employer-sponsored retirement plans, public and government employee plans, and other tax-exempt retirement accounts. With the expertise of a Tennessee attorney skilled in bankruptcy practice, individuals going through bankruptcy can rest easy that their savings are secure.

There are also more obscure, but nevertheless useful, exemptions under Tennessee bankruptcy law, which a knowledgeable bankruptcy attorney can leverage. For example, individuals receiving unemployment, Social Security payments, or workers compensation can benefit from certain exemptions, as can those receiving disability benefits.

While there are many options available under Tennessee law to safeguard your property, successful protection comes best from an experienced and reputable Tennessee bankruptcy attorney. Clients often come to The Nevin Law Firm after attempting to embark on the bankruptcy process alone, or once they come to the unfortunate realization that their attorney isn’t familiar with bankruptcy laws. We see first-hand what a negative impact these experiences can have on our clients—and these can be expensive mistakes. If you or someone you know are considering bankruptcy, get all the facts first from a dedicated bankruptcy attorney who is familiar with bankruptcy and Tennessee bankruptcy exemption laws.

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