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Tyler Texas Bankruptcy Law Blog

Many fear serious illness less than serious medical expenses

Tyler residents who are worried about their health care expenses are not alone. Roughly three in four Americans have experienced an increase in the cost of health care in recent years, leading to concerning statistics about their ability to stay on top of medical costs.

More than one in three Americans, according to a new study, reported that they would not be able to cover a bill of more than $100 for an unanticipated medical expense. Perhaps surprisingly, more than half feel that receiving a serious diagnosis is just as bad as receiving a medical bill they cannot afford to pay. And around one in 10 would rather take the diagnosis over a bill they could not pay.

Student loans, Chapter 7 and the Brunner rule

We recently wrote about the concerning rates of student loan default in America today, and the important fact that bankruptcy cannot eliminate this kind of debt as it can others. Let's take a look at how this reality has played out for one Texas resident who filed for Chapter 7 bankruptcy, and the very narrow (virtually impossible) exceptions to the student loan rule which some are advocating to change.

The story recently came to light of a Texas woman who borrowed $7,000 in student loans back in 2012. She was in her late 50s at the time and enrolled in two semesters at a community college. By 2014, she was unemployed, in part due to struggles with diabetic neuropathy. She was unable to make payments on her student loans, not to mention other debts, and filed for Chapter 7 bankruptcy in 2017.

Sobering statistics in new study of student loan default rates

$1.4 trillion: this is how much American graduates owe in student loan debt today. If that figure sounds alarming, there is more bad news in a recent Brookings Institution study of the latest data released by the U.S. Department of Education. The study sought to examine student debt over a longer term than the often-studied first few years after graduation. It found that, of borrowers who started college back in 2004, nearly two in five will likely default on their student loans within the next five years.

Some are more likely than others to default. Students at for-profit colleges and universities were twice as likely to default on their student loans as those who studied at public two-year universities and four times as likely as those enrolled in community colleges. Individuals who do not complete a degree program are also more likely to default.

Has your cancer diagnosis left you in serious debt?

The last words you ever expected your doctor to say to you when you went in for your regular checkup were that you have cancer. A cancer diagnosis can come as a shock. It can be difficult to wrap your head around. In fighting your cancer, you may find it physically and emotionally challenging, and financially draining. Most cancer patients end up in serious debt.

The expense of cancer treatments is outrageous. Yet, they are necessary if you want to survive or at least prolong your life. Insurance providers, sadly, do not usually cover the full cost of treatment, which can leave you and your loved ones in a bad economic situation. What can you do?

Nation's credit card debt ballooned in 2017

Many Tyler residents likely made a new year's resolution to get a handle on their credit card debt. The phenomenon is occurring across the country: a recent study projects that Americans added a total of $50 billion in credit card debt over the course of the past year. Collectively, we owe $1 trillion in credit card debt.

Here in the city of Tyler, according to the study, residents owe an average of nearly $6,000 on their credit cards. That sum will take the typical borrower more than five years to pay off and cost over $2,500 in interest. Other cities didn't fare even as well as Tyler: some owed an average of as much as $7,100. The lowest-debt city in the study still carried over $1,000 per person on average.

Unemployment could be the cause behind Chapter 7 bankruptcy

We have all had that friend, family member or co-worker who was suddenly let go from their job. It can be a shock, both emotionally and financially. Sometimes, despite a person's best efforts, it can cause a term of unemployment. With many people living paycheck to paycheck to begin with, a bout of unemployment can have catastrophic consequences.

These consequences can include crippling debt due to an inability to bring in income to pay outstanding debts or other financial responsibilities. Most people require a paycheck in order to pay their bills and support their family. So, understandably, a lack of income can cause everything to go awry. Chapter 7 bankruptcy can help to wipe the financial slate clean and start again.

Safeguarding your financial future by knowing the causes of debt

The burdens of debt can place you under a significant financial weight and may leave you with concerns about your financial future. If you are experiencing prolonged periods of monetary hardships, you may also be suffering a lesser quality of life in the process, potentially prompting a need to seek relief.

Your search for relief may also have you wondering how you got to this point in the first place. Although this may seem like a pointless query at first, understanding the most common causes of monetary hardships could prove exceedingly beneficial in your efforts to protect your financial future.

Energy company reorganized, back in business after Chapter 11

There is an all-too-common understanding in business here in Tyler and throughout the country that bankruptcy is the end of the line. Certainly, when business profits shrink, operations struggle and debts take over, something will need to change. But when that change is achieved by filing for Chapter 11 bankruptcy, the business does not necessarily have to call it quits altogether.

Take the example of the once-major renewable energy player SunEdison. Major spending on acquisitions, coupled with multiple lawsuits and a nosedive in stock prices, lead the company to file for Chapter 11 bankruptcy in early 2016. Through the Chapter 11 process, SunEdison sold off over $2 billion in assets. This enabled it to reach settlements with its numerous creditors and other parties with a financial stake in the company.

Reorganization under Chapter 13 bankruptcy

Although it is often the last thing that a debtor wants to consider when they are facing insurmountable financial challenges, bankruptcy is an excellent option for many people who want to be in control of their loans and other financial obligations. Texans have several options for bankruptcy that may allow them to receive judicial discharges of their debts and, depending upon the form of bankruptcy that they choose, the process of reaching a discharge can look very different.

Under a Chapter 7 plan a debtor must sell off or liquidate items of property that are not exempt under the bankruptcy rules. The proceeds of the property sales then may be applied to the debts the individual holds with their creditors; this will allow a debtor to achieve discharge under Chapter 7 bankruptcy.

Exemptions under Chapter 7 bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, permits a debtor to sell of items of property in order to satisfy their outstanding obligations to their creditors. Some Tyler residents may be wary of this process as it may seem as though they will be left with nothing once their financial obligations are fulfilled. However, through the permissible use of property exemptions a debtor may protect certain items of property for their lives after they have received their Chapter 7 discharges.

There are limits on what property may be exempt under the Chapter 7 bankruptcy rules. A debtor that owns two homes, such as a primary residence and a vacation property, may not be able to retain both properties throughout bankruptcy process. Additionally, a person who owns expensive items of personal property, such as artwork, heirlooms and jewelry collections may not be allowed to retain those items if they want to fulfill their debts to the creditors.

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