Bankruptcy Happens to Good People, Too

TRI Writer • March 23, 2022

Did you know that Tennessee has more than double the national bankruptcy rate? According to Memphis Business Journal, Tennessee sees 5.17 filings for every 1,000 residents each year. The prevalence of Tennessee bankruptcy filings is likely because state laws are quite friendly toward creditors and lenders, so consumers seek the protections of bankruptcy more often.

Bankruptcy Is for Good People, Too:

Any bankruptcy attorney with a significant amount of time practicing will agree that bad things happen to good people. Many people still attach a negative tone or perception to the bankruptcy process or someone who files bankruptcy. It can be difficult to understand what it feels like to be buried in debt with no means to reverse the situation until you’ve been in that scenario or until you’ve worked with those looking for a solution.

Filing Bankruptcy Doesn’t Mean You Did Something Wrong

Sometimes it’s tempting to assume that the only reason someone would ever need to file for bankruptcy is if they did something wrong, but that’s not the truth of the matter. Many bankruptcy filers come to their first consultation still a little shell shocked because they thought they were doing everything right…until something unexpected happened or in some cases, until a series of unfortunate events occur. No one can plan for every eventuality or every combination of possible factors. In some cases, doing everything right can still end in a tough spot for no good reason at all.

Common Reasons People End Up Filing Bankruptcy:

People seeking the protection of bankruptcy do so for countless reasons, but there are some that you can call “common” reasons simply because they come up so frequently even though they have nothing to do with making a poor choice, being a bad person or failing to plan appropriately.

  • Long time employers go out of business
  • Wage earners experience a reversal of health
  • Medical debt
  • Family tragedy
  • Legal trouble
  • Death in the family

This partial list is just an example of the many situations that bring good people to the office of a bankruptcy attorney seeking help. Whether you’re looking to file bankruptcy yourself, or you are helping a friend or loved one seek out possible answers to their difficult situation, always remember that bankruptcy is for good people, too.

We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and how to obtain a Chapter 7 discharge, please don’t hesitate to contact Ken Rannick. 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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