Memphis TN Legal Blog

If you're in a difficult financial position, you may be thinking about applying for bankruptcy. Bankruptcy can be an excellent way to help you get better control of your finances, and it has a number of benefits. In fact, once you begin a bankruptcy, collections activities usually stop, so you know that you'll finally get relief from the harassing calls and letters.

The trouble that you're running into is that you're concerned that you will lose your home, personal property and possessions. You've worked hard to buy a home, car and the other items that you consider necessities. You don't want to lose your home over a lost job or debts that have spiraled out of control. Fortunately, the truth is that many of your possessions will remain in your hands at the end of the bankruptcy thanks to the exemptions currently allowed.

People who are swimming in debt might have trouble making payments on secured assets, such as a vehicle or home. It is imperative that you decide how you will handle this situation as soon as you realize you won't be able to keep up with the payments. Your first line of defense might be contacting the lender to see what you can work out. During this meeting, be sure that you don't make any payment arrangements that you can't keep.

If you aren't able to work something out with the lender, you might consider bankruptcy to try to prevent repossession. This requires that you take a hard look at your financial situation to determine what you need to do. There are two primary options in a personal bankruptcy. You can file for a Chapter 7, which is the liquidation bankruptcy and doesn't require you to make payments. You might qualify for a Chapter 13, which requires you to make regular payments to the bankruptcy trustee.

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.