Drowning in Debt and Turning to Bankruptcy for Protection

TRI Writer • Nov 27, 2019

Kenneth C Rannick PC, Kenneth C Rannick bankruptcy, Rannick bankruptcy attorney, Tennessee bankruptcy attorney, Georgia bankruptcy attorney, Tennessee bankruptcy lawyer, Georgia bankruptcy lawyer, declare bankruptcy in Tennessee, declare bankruptcy in GeorgiaAre you drowning in debt? Do you and your family struggle to make your monthly payments? Do you worry about how you will pay for your necessary living expenses? If so, you’ve probably already started to consider bankruptcy. Filing for bankruptcy offers people in severe financial distress relief from the overwhelming burden of debt; a chance to start fresh financially.

Bankruptcy offers many benefits in addition to wiping the slate clean for a fresh start. But it isn’t a free pass; there are serious issues to consider before moving forward with the decision to file.

Will Filing Bankruptcy Help in Your Situation?

Do your due diligence before moving forward to determine if declaring bankruptcy would help in your specific situation. While no one should take bankruptcy lightly, it’s often the best way to move forward and get back on your feet after debt has knocked you down. But how do you know if bankruptcy is the right choice with the best opportunity to relieve your debt?

Bankruptcy is a legal procedure used to discharge debt for consumers who either won’t be able to repay the debt or who do not have the means to repay the debt in their current situation. There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13.

In Chapter 7 bankruptcy, nonexempt assets belonging to the filer are liquidated if there is expected to be enough proceeds to make a material distribution to creditors. The proceeds are distributed towards the debts. Filers must pass the means test before filing Chapter 7 bankruptcy. The means test is in place to make sure that the court isn’t abusing bankruptcy law when granting a discharge of debt.

Chapter 13 bankruptcy is often called the wage earner plan and is for bankruptcy filers with a steady income. In Chapter 13 bankruptcy, filers pay back all or part of their debt through a bankruptcy court-approved payment plan over three to five years.

In most cases, bankruptcy does not protect you from debts incurred after filing. All types of liability are not eligible for bankruptcy. To determine if the majority of your debt is eligible for bankruptcy discharge, discuss it in detail with a bankruptcy attorney.

Is it Worth the Negative Consequences?

Bankruptcy will hurt your credit worthiness if your borrowing opportunities are now high.  It will raise your borrowing opportunities if your credit score is very low.  The bankruptcy remains on your report for ten years if you file Chapter 7 and seven years if you file Chapter 13. When filing Chapter 7 bankruptcy, you may lose assets (depending on the amount of equity involved).

If you are considering filing for bankruptcy and you need to discuss the pros and cons of filing, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in the Chattanooga area with two! You are in good hands with Kenneth C. Rannick P.C.

27 Mar, 2024
Understanding which Debts can be Discharged in Chapter 7 Bankruptcy
19 Feb, 2024
Protecting Your Assets in Chapter 7 Bankruptcy
30 Jan, 2024
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.
21 Dec, 2023
Filing for bankruptcy can be a scary and confusing decision, but it is a necessary step for individuals and businesses who are struggling with their finances. In Minnesota, one of the most common types of bankruptcy is Chapter 11 bankruptcy, which allows a business to reorganize its debts and continue operating while paying off its creditors. If you're considering Chapter 11 bankruptcy, it's important to understand how it works and what benefits it can offer. In this post, we'll delve into the process of filing for Chapter 11 bankruptcy, highlight its advantages, and discuss how you can get started.  1. Understanding Chapter 11 Bankruptcy Chapter 11 bankruptcy is a form of bankruptcy that allows businesses to reorganize their debts while continuing to operate. The goal of this process is to give businesses a chance to become profitable again by restructuring their debt payments. During Chapter 11 bankruptcy, a business is protected from creditors by an automatic stay that prevents them from pursuing collection activities. The debtor then works with a bankruptcy court and creditors to create a repayment plan that will allow them to pay off their debts over time. 2. Benefits of Chapter 11 Bankruptcy There are several benefits to filing for Chapter 11 bankruptcy. One of the primary benefits is that it allows the debtor to maintain control of their business operations while repaying their debts. This means that the debtor can continue to generate revenue and will not be forced to liquidate their assets to pay off their creditors. Additionally, Chapter 11 bankruptcy can give the debtor more time to negotiate with their creditors and reach a repayment agreement that is more favorable to them. 3. How to File for Chapter 11 Bankruptcy Filing for Chapter 11 bankruptcy can be a complex and time-consuming process, but it is possible with the help of a knowledgeable bankruptcy attorney. The first step is to file a petition with the bankruptcy court, which will initiate the automatic stay and prevent creditors from taking any further collection actions. Next, the debtor will need to provide the court with a comprehensive list of their assets, liabilities, and creditors. From there, the debtor will work with their attorney to create a repayment plan that is feasible and fair to all parties involved. 4. Working with a Bankruptcy Attorney Filing for Chapter 11 bankruptcy can be an overwhelming process, and it is important to work with a qualified bankruptcy attorney who can guide you through the process. A bankruptcy attorney can help you prepare and file the necessary paperwork, negotiate with creditors on your behalf, and create a repayment plan that is tailored to your unique financial situation. Additionally, an attorney can give you advice on how to protect your assets and maintain control of your business operations during the bankruptcy process. Filing for Chapter 11 bankruptcy can be a complicated and stressful process, but it can also be a valuable tool for businesses that are struggling with their finances. By reorganizing their debts and negotiating with creditors, businesses can get a fresh start and work towards profitability once again. If you're considering filing for Chapter 11 bankruptcy in Minnesota, it's important to work with a qualified attorney who can guide you through the process and help you achieve the best outcome.
02 Dec, 2023
Chapter 7 vs Chapter 13 Bankruptcy: Which is right for you?
20 Oct, 2023
For many people in Tennessee, bankruptcy can be a daunting and overwhelming prospect. However, if you are struggling with unmanageable debt, it is important to know that there are options available to you. One such option is subchapter 5 bankruptcy, a relatively new form of bankruptcy designed specifically for small businesses and individuals with debts of less than $7.5 million. In this blog post, we will take a closer look at what subchapter 5 bankruptcy is, who might be eligible to file for it, and the benefits it can offer. What is Subchapter 5 Bankruptcy? Subchapter 5 bankruptcy was created as part of the Small Business Reorganization Act of 2019. Its purpose is to provide a streamlined and cost-effective process for small businesses and individuals to restructure and eliminate their debts. Some of the key features of subchapter 5 bankruptcy include: - A simplified reorganization plan process - No requirement for a committee of creditors - No need to obtain approval from creditors for the reorganization plan - Filing fees can be paid in installments Who Should File for Subchapter 5 Bankruptcy? Subchapter 5 bankruptcy is specifically designed for small businesses and individuals with debts of less than $7.5 million. To be eligible to file for subchapter 5 bankruptcy, you must meet certain criteria. These include: - Being engaged in commercial or business activities - Owning no more than $7.5 million in debt - Earning at least half of your income from your business - Being an individual or married couple, rather than a corporation or partnership Benefits of Filing for Subchapter 5 Bankruptcy There are several benefits to filing for subchapter 5 bankruptcy. These include: - Cost-Effective: One of the primary benefits of filing for subchapter 5 bankruptcy is that it is often less expensive than other forms of bankruptcy. This is because it eliminates certain requirements, such as the need for a committee of creditors. - Reduced Plan Length: In a typical chapter 11 bankruptcy, the debtor has up to 5 years to repay their debts. With subchapter 5 bankruptcy, the plan length is limited to 3 years, making it a quicker and more efficient process. - Greater Control: Unlike other forms of bankruptcy, in subchapter 5, debtors retain greater control over the bankruptcy process. This includes being able to draft their own reorganization plans and being granted more leeway in determining treatment of unsecured creditors. - Fewer Restructuring Hurdles: With subchapter 5 bankruptcy's simplified reorganization plan process, small businesses and individuals have more flexibility in restructuring their debts. Overall, subchapter 5 bankruptcy is an attractive option for small businesses and individuals who are struggling with unmanageable debt. By offering a streamlined and cost-effective process, it provides an opportunity for these entities to effectively restructure and eliminate their debts. If you are considering subchapter 5 bankruptcy, it is important to consult with an experienced bankruptcy attorney who can guide you through the process and help you determine whether it is the right option for your specific situation. 
By Kenneth Rannick 28 Sep, 2023
The pandemic has caused immense financial distress for individuals and businesses alike. With businesses shutting down and millions losing jobs, many have turned to bankruptcy for relief. And this is where subchapter 5 bankruptcy comes in. If you're a resident of Tennessee and are looking to file for subchapter 5 bankruptcy, you've come to the right place. In this blog post, we'll explore what subchapter 5 bankruptcy is, who should file for it, and the benefits of doing so. We'll also discuss how Kenneth C. Rannick, P.C. can assist you with your subchapter 5 bankruptcy matters. 1. What is subchapter 5 bankruptcy? Subchapter 5 bankruptcy, also known as small business reorganization, is a relatively new form of bankruptcy introduced by the Small Business Reorganization Act of 2019. It is designed specifically for small businesses and individuals with debts of less than $7.5 million, making it a simpler and more affordable form of bankruptcy compared to other chapters. The aim of subchapter 5 bankruptcy is to help small businesses restructure their debts and emerge from bankruptcy with a viable business. 2. Who should file for subchapter 5 bankruptcy? Subchapter 5 bankruptcy is a great option for small businesses that are struggling with debt but have a viable business model. It can also be a good option for individuals who don't qualify for other chapters of bankruptcy, such as chapter 7 or chapter 13. To file for subchapter 5 bankruptcy, the debtor must have a regular income and be willing to work with creditors to come up with a repayment plan. 3. Benefits of filing for subchapter 5 bankruptcy One of the biggest benefits of subchapter 5 bankruptcy is that it allows small businesses to restructure their debts and emerge from bankruptcy with a viable business. This means that creditors are more likely to be paid, and the business can continue to operate. Another benefit is that subchapter 5 bankruptcy is faster and less expensive than other chapters of bankruptcy, making it more accessible to small business owners. Additionally, subchapter 5 bankruptcy allows debtors to retain ownership of their business and reorganize their debts in a way that is manageable. 4. How Kenneth C. Rannick, P.C. can assist you with your subchapter 5 bankruptcy matters If you're a resident of Tennessee and are considering filing for subchapter 5 bankruptcy, Kenneth C. Rannick, P.C. can help. We have extensive experience with bankruptcy matters, including subchapter 5 bankruptcy, and can guide you through the process from start to finish. We can help you determine whether subchapter 5 bankruptcy is the right option for your small business, and can help you come up with a repayment plan that works for you and your creditors. Subchapter 5 bankruptcy can be a great option for small businesses and individuals who are struggling with debt but have a viable business model. It is a simpler and more affordable form of bankruptcy compared to other chapters, making it more accessible to those who need it. Kenneth C. Rannick, P.C. can help you with your subchapter 5 bankruptcy matters, and guide you through the process from start to finish. If you're a resident of Tennessee and are considering filing for subchapter 5 bankruptcy, don't hesitate to reach out to us for assistance.
22 Aug, 2023
IS IT A SIN TO FILE BANKRUPTCY?
By TRI Writer 19 Oct, 2022
If bankruptcy is your only hope of getting out from under a mountain of debt that’s grown too large for you to pay, you have one more big question to ask yourself. Should you file for Chapter 7 or Chapter 13 bankruptcy? Most assume Chapter 7 is the appropriate choice for consumer bankruptcy, but some... The post Who Benefits the Most from Chapter 13 Bankruptcy? appeared first on Kenneth C. Rannick, P.C..
By TRI Writer 12 Oct, 2022
Tennessee or Georgia residents filing consumer bankruptcy must complete a consumer credit counseling course before their bankruptcy and a financial management course after their bankruptcy. Why Am I Required to Take Courses For My Bankruptcy? The course requirements for Georgia bankruptcy are based on the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which... The post What You Need to Know About Credit Counseling for Your Tennessee Chapter 7 Bankruptcy appeared first on Kenneth C. Rannick, P.C..
More Posts
Share by: