January 23, 2021

About Jonathan Ginsberg

Jonathan Ginsberg has been in private law practice since 1987. He writes and teaches about Chapter 7 and Chapter 13 bankruptcy protection.

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Credit Counseling and Debtor Education Courses Required for Tennessee Bankruptcy Filers

Mandatory Credit Counseling and Debtor Education Courses for Bankruptcy Filers

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 stipulates that when a person files for personal bankruptcy, they must go through two counseling sessions: a credit counseling course and a debtor education course. Within 180 days before a person files for bankruptcy, they must receive credit counseling from an organization approved by the Department of Justice’s U.S. Trustee Program. Then, once they have filed bankruptcy, they must complete a debtor education course in order to have their debts discharged. The U.S. Trustee Program operates in all states except Alabama and North Carolina.

Pre-Filing Credit Counseling

You must go through a credit counseling session with an approved credit counseling organization before you file for bankruptcy. In this course you will receive an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. Approximately half the people that complete the credit counseling session immediately hire a lawyer and file a case, while the other half usually try cutting more expenses to suspend filing.

The credit counseling course should last about 60 to 90 minutes, and can take place in person, on the phone, or even online. Generally, this session costs about $50 but can be waived for consumers who cannot afford to pay the fee. To waive the fee, you need to request a fee waiver from the counseling organization before the course begins.

Once the course is completed, you must receive a certificate as proof of your participation. It is important to check the U.S. Trustee’s website to make sure that you get the certificate from a counseling organization that is approved in the judicial district where you are filing bankruptcy. To protect against fraud, the certificates are produced through a central automated system and are numbered.

When searching for a credit counseling provider, make sure you receive services only from approved providers for your judicial district. Check the list at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm or at the bankruptcy clerk’s office for the district where you will file.

Post-Filing Debtor Education

As mentioned above, you must complete a debtor education course after you file for bankruptcy in order for your debts to be discharged. As a rule, there is no way that you can take the debtor education course at the same time as the credit counseling course. In the debtor education course, you will receive information on developing a budget, managing money, using credit wisely, and other resources. This course may last about two hours, and like credit counseling can be provided in person, on the phone, or online.

The fee for the debtor education session is generally between $50 to $100. As with credit counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider.

Once the course is completed, you should obtain a certificate as proof of completion, separate from the certificate you received after completing your pre-filing credit counseling.

Check the list of approved debtor education providers at www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm or at the bankruptcy clerk’s office in your district.

Bankruptcy Tips & Secrets

Knowing what to expect can make filing for bankruptcy a smoother, less painful process. Here are some helpful tips and secrets about filing for bankruptcy:

orangecheckPersonal bankruptcy is not just for the poor anymore; formerly affluent people are being pushed into bankruptcy more than ever before. Due to the decline in real estate values and the increase in job losses in professional positions, 8.1% of bankruptcy filers last year made over $60,000. This fact lessens the stigma that personal bankruptcy is for the poor and those irresponsible with their money.

orangecheckYou can choose the best way for your debt to be handled when filing for personal bankruptcy. If you file for Chapter 13, you play an integral role in determining how you will pay off your debt. You will help design a payment plan that works for you, and thus you have a lot of choice about the way your bankruptcy plays out. Even with Chapter 7, you and your attorney can negotiate with creditors to find a way to fit your needs. Chapter 7 and Chapter 13 bankruptcies can be complicated, however, so it is highly recommended that you consult a bankruptcy attorney before filing either type.

orangecheckA common misconception about bankruptcy is that it will leave you with nothing and homeless. Even in Chapter 7 cases, in which most a debtor’s assets are liquidated in order to pay off creditors, debtors often get to keep their homes. This could be because the debtor has taken out a second mortgage or the value of the home has fallen. There is also something called the homestead exemption which most of the time allows the debtor to keep their main residence if their equity in it is below a certain threshold. The laws vary between states, so it is recommended that you consult with an attorney before moving forward.

orangecheckBankruptcy could potentially improve your credit scores in the long run. While it is true that the immediate effect of bankruptcy is a drastic lowering of your credit scores, bankruptcy can be less damaging down the road than juggling late payments on credit cards for years in an attempt to delay the inevitable. Because 35% of a person’s credit score is based on payment history, it is important to keep from missing any payments and establish new credit as soon as possible. Bankruptcy stays on your credit report for 10 years, but you can work to repair it immediately.

orangecheckMany debt settlement firms can actually do more harm than good. Most are unregulated, for-profit, and require regular payments before even helping the debtor. Because they are getting fees every month, they have little incentive to settle with creditors quickly. I recommend being very wary of debt settlement firms.

orangecheckWhile it’s a natural desire to pay back friends and family before filing for bankruptcy, it can cause many problems. The trustee has the power to sue over any money repaid to friends and family within a year of bankruptcy if it is not voluntarily returned. Bankruptcy filers must disclose everything they’ve sold, transferred or given away in the past two years, and attempting to hide assets from the court can lead to bankruptcy discharge or even jail time for perjury.

orangecheckEven if you stop receiving bills, it is still important to pay them. When you file for bankruptcy, you stop receiving collection calls and most bills aren’t sent to you, but that does not mean that you are released from obligations for paying them. If you file for Chapter 7 bankruptcy you must remember to continue to pay for what you want to keep, known as “secured possessions” such as a car or house, even if you don’t receive a bill.

orangecheckTiming is very important, and when you owe more than you own, it’s time to talk to a lawyer. It does not mean that bankruptcy is the next step. As counter-intuitive as it may seem, it is sometimes best to wait until you think the worst is over. Otherwise you may file prematurely and acquire more debt that will not be included in the bankruptcy discharge. For example, if you are facing hospitalization you may want to wait to file until that’s behind you. However, there are other situations where it is better to file sooner rather than later. Legal advice can help you find the correct timing.

orangecheckThere is nothing easy about bankruptcy, but it certainly does not have to be the end of the world. An important part of coping is for debtors to acknowledge the normal feelings of depression, fear, and anger that come with filing for bankruptcy, and to make sure to reach out to support networks. The stigma that comes with bankruptcy has been lessened as it becomes more widespread and accepted. Often times filers come out stronger than they expected.

The Equal Employment for All Act – brought to you by Tennessee Representative Steve Cohen

Finding a job in this economy can be very difficult to say the least; however, some employers use background and credit checks that can make it seem impossible. Approximately forty-three percent of companies use credit checks as a prerequisite to employment. The credit checks are used for various reasons, including attempting to determine if a person has a propensity to steal because of debt, etc. Despite this reasoning, however, many studies conducted by various unbiased groups have found that a person’s credit history does not predict job performance.

In an effort to stymie the use of credit checks, especially in this difficult economy and while unemployment rates are high, Tennessee

Tennessee Representative Steve Cohen

Tennessee Representative Steve Cohen

Representative Steve Cohen has introduced HR 3149, The Equal Employment for All Act, which would help individuals, especially students, recent college graduates, low-income families, and senior citizens, to build or rebuild their credit by obtaining a job. According to Representative Cohen, one-third of individuals making less than $45,000 a year have poor credit scores due to bankruptcy, foreclosure, loan delinquency, divorce, medical debt, or unemployment. Their credit score can continue to be adversely affected the longer they remain out of a job, and companies using a credit investigation to determine whether to hire them adds to their problems.

The Equal Employment for All Act would prohibit employers from using an individual’s credit check as part of the hiring or firing process, unless the job involves national security, FDIC clearance, or significant financial responsibility – positions such as loan officers, bank managers, or financial officers. Representative Cohen has noted that approximately forty-six other House Representative colleagues have endorsed the Equal Employment Bill. He has stated that the purpose of the Bill is to prevent the loss of job opportunities for people who need them the most and to stop a hiring trend that will only hurt those who need the employment the most. In these difficult economic times, people are continuing to struggle with debt and many are attempting to work their way out of it. This Equal Employment Bill represents a tangible, simple, and immediate action that can be taken to provide unemployed individuals an opportunity to work their way out of debt without some of the roadblocks along the way.

Tennessee Solar Initiative to Create 200 to 400 New Jobs

Tennessee’s job market and solar initiative will be stimulated with the opening of a manufacturing, warehousing, and distribution facility in Clinton, Tennessee. Confluence Solar, based in Missouri, will be investing $200 million for the new facility in Clinton, which is expected to create 200 to 400 new jobs.

Confluence Solar produces mono-crystal silicon ingots that increase the solar panelsefficiency of solar photovoltaic, which helps to reduce the cost of solar power generation. Tennessee, which has noticed a quick surge in solar capital investments and growth in solar research and development throughout the state, is eager to house the new facility. Wacker Chemie and Hemlock Semiconductor will be investing over $2 billion for the construction of polysilicon manufacturing facilities near Cleveland, Tennessee.

Some of the other initiatives in the state include the establishment of the Tennessee Solar Institute and an investment of $62.5 million in research and energy production. Tennessee Valley Energy Enterprise was introduced by the Department of Energy in March of 2009 for reusing federal sites for the purpose of energy related research.

The Governor of Tennessee, Phil Bredesen, said that these new developments in addition to the advances in energy storage from the Oak Ridge National Laboratory have helped to build a solar footprint throughout the state. Confluence Solar will be building its facility in the Clinton I-75 Industrial Park on a 25-acre site.

Tennessee Valley Authority, the Tennessee Department of Economic and Community Development, elected officials, local economic developers and the Clinton Utilities Board worked together to seal the deal.

Tennessee Teachers Helping Their Students Learn Financial Literacy

Teachers in Tennessee, which in 2009 had the highest rate of Chapter 13 bankruptcy per capita in the United States, believe it’s never to early to teach children how to handle money and make smart choices.

The $mart Tennessee Financial Literacy program, which is taught to first-, fourth-, and seventh-graders as well as high school students, aims to teach children and young adults that money does not grow on trees. The program is in its fourth year in Tennessee, and in 2008-2009 it reached over 15,000 students.

Cordova Elementary school teacher Jennifer Conti gave her fourth-grade class a lesson on the difference between goods and services. A fast-food chain was used as an example. While the children understood that their parents paid for edible goods, such as burgers and fries, at the chain, they also heard their parents complain about bad service. Another example was if a good such as a computer was purchased, Conti explained to her class that it’s a service if someone comes to your house to set the computer up or fix it.

Students also learn about the link between education and careers. “I learned the more education, the more cash,” said fourth-grader Lauren. “If you have a lot of talents and skills, you get much more money for that,” said classmate Zeric.

According to Marilyn Taylor, who oversees social studies in Memphis City Schools, “Saving is a big part of this; it may just be a nickel in your hand, but saving a nickel each week will add up. This is about more than money, if students learn to make wise choices, that goes across their whole life. It’s about decision-making.”

In the Western District of Tennessee, which includes Memphis and Jackson, 20,029 individuals or businesses filed for bankruptcy last year. The $mart Tennessee Financial Literacy is hoping to reduce the number of filings in future generations by teaching children early on about money and economics in terms to which they can relate.

Bankruptcy Filings Soar in Middle Tennessee

The Tennessean recently reported that bankruptcy filings in Middle Tennessee rose as much as twenty percent in 2009. Hit especially hard were those in the home building and trucking industries. What is more concerning2010 increase is that industry experts and bankruptcy attorneys believe that that number will continue to rise throughout 2010. Playing a role in the steady increase was credit card debt, unemployment, real estate foreclosures, and medical debt. Homebuilders often found it difficult to manage their businesses when their subcontractors were not paid. If they were unable to collect, then it was likely that the main homebuilding business would have to file for bankruptcy.

The twenty percent increase includes both business and individual filings in Middle Tennessee. In addition to this increase, there was also a rise in the number of individuals filing for Chapter 11 bankruptcy. Specifically, there was a fifty-seven percent increase in these filings in Tennessee, due primarily to wealthy individuals filing for bankruptcy in accordance with business debt reorganization laws. Although the bankruptcy laws were changed in 2005 to make it more difficult for consumers to enter into bankruptcy, the poor economy, record unemployment figures, and the housing market bust have contributed to increased filings.

In fact, business bankruptcies across the United States rose to a record thirty-eight percent since the new bankruptcy laws went into effect. In Middle Tennessee alone, there was a fifteen percent increase in business filings under Chapter 7. According to the Associated Press, 2009 was the seventh worst year for bankruptcy filings at 1.4 million. Although the states with the largest increase in petitions were in the West, including California, Tennessee until only recently had the highest per capita rate of bankruptcy filings. Nevada surpasses Tennessee just this past month; however, the state still remains number two in this area.

Although the bankruptcy process is difficult on consumers, it has also been hard on many of the creditors. Mortgage companies, credit card companies, vendors, contractors, and subcontractors are all fighting to collect money owed to them in a bankruptcy. Most of the time, they lose. And, although there are reports that the economy shows some signs of improvement and that unemployment will begin to taper off here one year after the stimulus plan went into effect, most experts agree that bankruptcy petitions will continue to increase in at least the first half of 2010. Those states with inflated filings (such as Tennessee) already are sure to see those increases almost double.

Tennessee Republican Bob Corker helps propose a plan for setting up a new bankruptcy court for failing financial firms

The U.S. Senate is likely to propose setting up a new bankruptcy court for failing financial firms. The plan has been crafted by Senators Mark Warner, a Virginia Democrat, and Bob Corker, a Tennessee Republican, who want a specially trained judge, rather than a government agency, to preside over the takedown of financial firms whose failure could destabilize the system.

While details of the plan are still being worked out and will be released by the banking committee as part of the regulatory revamp, Corker said, “We absolutely want to eliminate from the American vocabulary that any company is too big to fail.” Both Corker and Warner have come to a strong preference for bankruptcy.

The lawmakers are among a number of bipartisan teams that Banking Committee Chairman Christopher Dodd, who announced his retirement last week, has assigned to draft pieces of the overhaul bill. They are in charge of crafting rules for how large, interconnected financial institutions should be regulated.

Both the banking committee bill and one that passed the House late last year will be part of the government’s effort to support financial system rules and to avoid the chain reaction of panic and failures that resulted from the 2008 collapse of Lehman Brothers Holdings Inc.

According to the Obama administration, the Lehman Brothers bankruptcy is an example of why the government should have power to recover complex financial companies outside of the courts. “Taxpayers simply must not be put in the position of paying for losses incurred by private institutions,” Obama wrote in a letter to House Financial Services Committee Chairman Barney Frank last October. “When major financial firms fail, government must have the ability to dissolve them in an orderly way, with losses absorbed by equity holders and creditors.”

Both FDIC Chairman Sheila Bair and Fed Chairman Ben S. Bernanke have also argued against the proposed plan, and oppose putting too-big-to fail firms in bankruptcy. “We feel very strongly that bankruptcy frequently does not work,” said Bair.

Corker and Warner’s plan offers a compromise. While it would require the firms to go into bankruptcy, the firm would then be subject to a government-controlled takedown. The group of regulators deciding if the resolution should be removed from the courts would include the Treasury, the Federal Reserve and a member of a newly created systemic risk council.

8 Recession Proof Jobs

As the unemployment rate has failed to improve and the recession remains in effect, I bet there are very few people out there who aren’t worried at least a bit over their job security. During these tough economic times, you never can tell whether any job is completely secure, but there are some jobs will always be in demand. Here are eight jobs that appear to be the most “recession proof.”

1. Entertainmententertainment

One of the only markets that continue to grow at a fast rate is the entertainment business. When people are dealing with a difficult recession, entertainment becomes increasingly important. Jobs involving movies, video games, alcohol, and nightlife venues become more in demand when times are tough.

2. Software Design and Developmentsoftware

According to the US Department of Labor, the software design and development industry is on track to be one of the fastest growing jobs through to 2016.

3. Accountantsaccounting

The recession has resulted in an increased demand for accountants. There are tougher accounting and auditing regulations, and more accountants are needed to help people with their finances.

4. Educationeducation

No matter what shape the economy is in, the nation’s youth must have access to education. Teachers and educators will always be needed; however location may play a part in where the jobs are located.

5. Law Enforcementlaw-enforecement

As times get harder, crime increases, putting law enforcement jobs such as police officers and security staff in high demand.

6. Funeral Services and Elder Care funeral

The high percentage of elderly today, and the aging population of baby boomers, keeps the funeral service business and care services for the elderly in high demand.

7. Doctors and Nurses healthcare1

Even during economic hardship life goes on, people get injured, have babies, get sick, and therefore will always need doctors and nurses.

8. Bankruptcy Attorneysbankruptcy-lawyers

Here at Clark & Washington, we have only seen an increase in the amount of bankruptcy filings since this recession began. As long as people continue to suffer from financial hardship, we will continue to stand by to provide support for those interested in filing bankruptcy!

Another Newspaper Company to File Bankruptcy

MediaNews Group Inc. will be the latest in the string of troubled newspaper companies that have had to seek protection from creditors amid unsustainable debt loads. The holding company plans to file for bankruptcy protection by the end of the month.

MediaNews, which owns 54 daily newspapers, along with television and radio broadcasters, is expected to file bankruptcy in Delaware as early as this week. MediaNews has been nearing bankruptcy for months but had been trying to rework its debt load outside of bankruptcy court, said William Dean Singleton, the company’s chairman and chief executive.

MediaNews will file a prepackaged bankruptcy, in which companies gather support from creditors ahead of a filing, creating a streamlined bankruptcy that can be approved by a judge quickly with little or no opposition from creditors. Sources familiar with the transaction said the company has been valued at approximately $200 million, including about $50 million of equity value.

Singleton, who has been able to retain control over MediaNews, represents a victory as bankruptcies often result in board and management changes. According to Singleton, cleaning up the company’s debt allows him to help lead newspaper consolidation, which some say could help publishers stay in business by creating stronger, more efficiently run groups of papers.
Singleton wants to be aggressive in merging newspapers. Potential candidates for such a merge have been pointed out, including MediaNews’s paper in St. Paul with the Star Tribune in Minneapolis, and adjacent papers in Southern California published by MediaNews, MediaNews Group Co., and MediaNews Group Inc. When asked what groups of newspapers may merge, Singleton simply said “you can look at the map.”

Because only MediaNews’s holding company is filing for bankruptcy protection, its newspapers should remain unaffected. The company remains current on vendor payments and should remain so, said Singleton. Also, the company’s trade creditors, suppliers and employees should be unaffected by the filing.

The top 10 reasons to file bankruptcy

Here are some top reasons why people file for bankruptcy, and also a discussion of how filing for Chapter 7 or Chapter 13 Bankruptcy can help.

1. I filed to eliminate the legal obligation of paying off my debts.debt

This process of wiping the slate clean is called a discharge of debts. The goal of a discharge is to reduce debt to give you a fresh start. Whether it is through total elimination of debt via a Chapter 7 Bankruptcy, or through reorganization of your current debt via a Chapter 13 Bankruptcy, most or all of your current debts will be addressed.

2. I filed to stop foreclosure on my house and effectively make payments to catch up on missed payments of my mortgage.foreclosure

If your home is in foreclosure, Chapter 13 Bankruptcy will stop the foreclosure any time prior to the sale. Bankruptcy does not eliminate mortgages on your property without payment. Rather, bankruptcy will structure a payment plan (usually lasting 5 years) in order for you to repay your mortgage the amount that you are behind.

3. I filed to prevent my car or other property from being repossessed.repo

Like foreclosure, repossession is another big reason people file bankruptcy. The past payments you have missed on your car or other personal property will be consolidated into your Chapter 13 Bankruptcy plan. After this you will no longer pay the finance company, rather you will make monthly payments to the trustee of your Chapter 13 Bankruptcy who will then pay the finance company.

4. I filed to reduce (or even eliminate) high medical bills.bills1

Sometimes people get blind-sighted by an accident or an illness which can prove to be an expensive affair. Filing Chapter 7 Bankruptcy can greatly reduce the amount of those expensive medical bills.

5. I filed because I recently lost my job and am now unemployed.unemployment

According to studies, loss of work is one of the most common reasons people file for bankruptcy. Losing a job is closely tied to high medical bills and can mean that a family may be left without the protection of insurance that was once provided by their employer. Often times these two factors combined create an almost impossible situation to get out of without the help of bankruptcy.

6. I filed to stop the harassing behavior from creditors.creditors

Often, creditors will persistently call the home of a particular debtor with demeaning and abusive behavior. Not only are these actions unethical, they can be unlawful. Bankruptcy will put on hold the demands of many creditors and stop their distressing behavior.

7. I filed to prevent my utilities from being shut off (or to restore already cut-off utilities)utilities

If you have been failing to pay the utility companies, then there’s a good chance your utilities may be in risk of being terminated. Filing bankruptcy can prevent the utility company from shutting off your utilities.

8. I filed to get help for large amounts of student loan debt.student-debt

While it is true that your student loans will not be eliminated like several other types of unsecured debt, bankruptcy can at least consolidate your student loan debt. This consolidation will allow a debtor to make monthly payments through Chapter 13 Bankruptcy that are within the financial ability of the debtor.

9. I filed to end wage garnishments.wage-garnishment

Chapter 7 Bankruptcy can stop those wage garnishments which take away some of your weekly earnings – often times leaving you without necessities. Chapter 7 Bankruptcy allows you to purchase necessities for you and your family and Chapter 13 Bankruptcy will also help if you face wage garnishment.

10. I filed to challenge certain claims of fraudulent creditors.creditor-fraud

Bankruptcy will allow you to challenge the fraudulent claims of creditors who are trying to collect more money from you than you really owe, or those creditors who are using illegal practices to collect your money. An experienced bankruptcy attorney can provide the expertise you will need to stop these creditors. A good bankruptcy attorney can often even the playing field between a big creditor and a single debtor. Filing bankruptcy with an attorney can stop fraudulent reporting by a creditor.