Memphis TN Legal Blog

The financial circumstances people experience are often largely out of their control. No one decides to become sick with a severe and debilitating condition that keeps them from working. Similarly, no one hopes to wind up in a car accident that leaves them with injuries and major bills. There are countless scenarios that people encounter that leave them financially overextended and struggling with debt.

While you should do your best to repay any amount of money you borrow, sometimes predatory lending and unfortunate circumstances combine in a way that leaves people unable to meet their financial obligations each month. For those struggling to make ends meet, bankruptcy is the simplest solution for handling most forms of unsecured debt.

Once you fall behind on your credit card bills, mortgage, car payments or utilities, you will start getting letters from your lenders. If you do not respond to those letters with payment in full, your creditors will start to take more aggressive actions. Typically this would involve either turning the account over to an internal collections department or, worse, selling your debt to a third party collection agency.

Once an account goes into collections, it can become a significant source of stress for the borrower. Collection agents have to adhere to laws about their behaviors, but they will push the issue as far as they can without incurring legal risk. They may call you at inconvenient times or places, such as your place of work.

Let's face it — life is full of curveballs. Many of those seem to occur in the financial sector of our lives, and sometimes we aren't as well-prepared as we should be.

If your economic situation is in free-fall, the following tips might help you avoid filing for bankruptcy:

If you qualify to file for debt reorganization under a Chapter 13 bankruptcy, you may enjoy a number of advantages that individuals who file for other forms of bankruptcy do not. Unlike Chapter 7, which focuses on liquidating assets to allow a debtor with little or no income to discharge his or her debts, Chapter 13 allows those who have income to repay debts at a more manageable pace, potentially discharging some portion of the debt.

One of the most attractive aspects of a Chapter 13 bankruptcy is that the procedure allows those who qualify to keep their personal property, as long as they can complete the repayment plan while abiding by its particular restrictions and timelines. If you suspect that Chapter 13 may resolve your financial difficulties, do not waste any time moving forward. The sooner you begin your own Chapter 13 procedure, the sooner you can get out of debt and back on track, all while maintaining ownership of your property.