Nashville Bankruptcy Law Blog

From an early age most children are taught how to be responsible with their finances. Their parents give them allowance so they can begin to learn how to appreciate the value of a dollar, how to save it, and when to spend it. As they grow older, the value is expanded to include meeting your obligations.

These values become guideposts to our adult lives. It is how we live responsibly in society. We pay our bills. Few of us consider what we might do if these beliefs come into conflict with taking care of our family. It may be difficult to imagine how this divergence could occur.

Yet, for many responsible Tennessee families this is just what has happened to them in the aftermath of the mortgage meltdown. They find themselves in the position of choosing between paying the mortgage and providing for the needs of their families. For the first time in their lives, many people in Nashville faced foreclosure.

For many people in Nashville struggling to manage their debt, receiving a summons from a creditor can initiate the first of a series of sleepless nights. Summons are written in the legal language of attorneys and are frequently confusing to the average reader.

Even for those who have a valid defense, they may not have the assets to hire an attorney to represent them. Consequently, according to www.Forbes.com, the majority of these lawsuits wind up as default judgments against the debtor.

A judgment, whether it be by default or not, is a ruling by the court that a debtor owes the creditor money. Once that judgment is in place, the creditor has the right to execute that judgment and seize the debtor's assets.

The bankruptcy laws were drafted with the intention of providing debtors with a fresh start. Debtors buried under credit card debts, loans or crippling mortgages can get out from under by filing bankruptcies. It would be logical to think the same safety hatch might be available to college graduates unable to find jobs in the country's stagnant economy. Unfortunately, there isn't one.

It wasn't always this way. While federal student loans have not been dischargeable in bankruptcy since 1978, private student loans were dischargeable until 2005, when the Bankruptcy Abuse Prevention and Consumer Protection Act went into that effect. Since that time all student loans have in essence been non-dischargeable.

The economic downturn of the past few years has taken its toll on businesses as well as individuals. Many people who have spent their entire lives building their companies are finding their livelihoods threatened due to mounting debt. For small business owners looking for way to save their business, there may be an option with a Chapter 11 bankruptcy.

What Is Chapter 11?

A Chapter 11 bankruptcy is also known as reorganization. It is typically used by businesses so they can remain operational while paying off their debts. Although a Chapter 11 bankruptcy may be completed in a few months, it generally lasts several years.