How the Covid-19 Pandemic is Affecting Tennessee Families, Debt & Bankruptcy

TRI Writer • September 22, 2021

Throughout the course of 2020 and 2021, the Covid-19 pandemic affected nearly everyone in the nation. Many have lost their jobs or settled for work that provides them with a significantly lower income to pre-pandemic positions. Others saw their education or career training progression come to a screeching halt due to rapid changes in the education. Many Americans find themselves behind on their basic bills. Some are turning to credit to cover their basic needs. A significant number have depleted their savings accounts. To alleviate the pressure, many Tennessee families are considering the benefits of bankruptcy.

Covid-19’s Effect on Tennessee Families and Personal Finances:

Many Tennessee residents are worried about their jobs; unexpected changes have become the norm, and families fear having to make ends meet with a suddenly lower income. Around 25% of Americans have struggled to make their payments at some point during the pandemic, and a large percentage of these likely used up most or all of their savings before finding themselves at a loss.

When Savings Are Depleted Tennessee Families Turn to Loved Ones for Help

When Tennessee families have depleted their savings, they generally turn to their loved ones for help. Up to 1 in every 6 Americans have borrowed money from family or friends once they’ve run out of options to make it work financially. Some families have turned to nearby food banks for help for the 1st time.

How Can Tennessee Families Recover from Negative Financial Impacts of the Pandemic?

Tennessee families who are in a tight or impossible financial situation due to unprecedented circumstances during the pandemic or following the pandemic, should remember to have hope. In addition to the government providing assistance as a result of the CARES Act, Tennessee residents should be proactive in seeking relief from lenders and financial institutions. Many have special options or programs available for those affected by the pandemic. Contact creditors or lenders and ask for alternatives. Prioritizing expenses, cutting out expenses that aren’t essential, and tracking/budgeting carefully can also be extremely helpful in gaining control of a difficult financial situation. If you lost your job and are unable to find another job to replace the lost income, consider seeking out accessible unemployment programs.

Considering All the Options: Tennessee Bankruptcy

Financial struggle is always difficult, but it is particularly stressful and unnerving during uncertain times. If you are struggling to recover from the pandemic financially, and need to talk about filing bankruptcy, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.

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Are you a Tennessee resident facing financial challenges and considering bankruptcy? If so, you may have heard about a relatively new option called Subchapter 5 bankruptcy. But what exactly is Subchapter 5 and how does it differ from traditional Chapter 11 bankruptcy? More importantly, what benefits does it offer to individuals and small businesses?  In this blog post, we will explore the world of Subchapter 5 bankruptcy and shed light on its advantages for Tennessee residents. Whether you're a struggling entrepreneur or an individual burdened by overwhelming debt, understanding the potential benefits of Subchapter 5 can help you make informed decisions about your financial future. What is Subchapter 5 Bankruptcy? Subchapter 5 is a relatively recent addition to the United States Bankruptcy Code, specifically designed to provide a streamlined and cost-effective bankruptcy process for small businesses and individuals. It was created as part of the Small Business Reorganization Act (SBRA) in 2019, with the aim of increasing accessibility to Chapter 11 bankruptcy relief. The Benefits of Subchapter 5 Bankruptcy Simplified Process: One of the key advantages of Subchapter 5 is its simplified and faster bankruptcy process. Unlike traditional Chapter 11 bankruptcy, which can be complex and costly, Subchapter 5 offers a more streamlined approach that is better suited for small businesses and individuals. Retention of Ownership: Under Subchapter 5, business owners have the opportunity to retain ownership and control of their company while developing a repayment plan. This allows for greater flexibility and the ability to restructure debts without losing ownership interests. Reduced Plan Requirements: Subchapter 5 eliminates certain stringent plan requirements that are typically associated with traditional Chapter 11 bankruptcy. This simplification of the plan process makes it more accessible to small businesses and individuals. Debt Repayment Plan: Subchapter 5 allows for the development of a debt repayment plan based on the individual's or small business's disposable income. This plan spans over three to five years, making it more manageable and achievable for debtors. Creditor-Friendly Approach: Subchapter 5 encourages creditor participation and collaboration, promoting consensual resolutions and a more amicable environment. This can lead to increased cooperation, reduced litigation costs, and ultimately, a more successful restructuring process. Subchapter 5 vs. Chapter 11 Bankruptcy: Understanding the Difference While both Subchapter 5 bankruptcy and traditional Chapter 11 bankruptcy share some similarities, there are significant differences between the two. The primary distinction lies in the complexity, cost, and requirements associated with each option. Subchapter 5 offers a more simplified and accessible bankruptcy process specifically tailored to the needs of small businesses and individuals, while Chapter 11 is better suited for larger businesses with more complex financial structures. If you're a Tennessee resident grappling with financial difficulties, Subchapter 5 bankruptcy may provide a viable solution. Its streamlined process, reduced plan requirements, and debtor-friendly approach make it an attractive option for small businesses and individuals seeking relief from overwhelming debt. Before making any decisions, it's essential to consult with a qualified bankruptcy attorney who can guide you through the process and help determine the best course of action for your specific situation. Remember, bankruptcy is not a one-size-fits-all solution, and the outcome will depend on various factors. However, understanding the potential benefits of Subchapter 5 bankruptcy can empower you to make informed decisions about your financial future. At Kenneth C. Rannick, P.C., we specialize in bankruptcy law and can provide the guidance and support you need during challenging times. Contact us today to schedule a consultation and explore your options for a fresh start. Take control of your financial future with Subchapter 5 bankruptcy. Let us help you navigate the path to a brighter tomorrow.
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