Jimmy E. McElroy & Associates Jimmy E. McElroy & Associates 2026-10-12T15:33:35Z https://www.jmcelroy.com/feed/atom/ WordPress /wp-content/uploads/sites/1601851/2020/11/cropped-favicon-32x32.png On Behalf of Jimmy E. McElroy & Associates <![CDATA[Can chapter 7 or 13 bankruptcy help with medical debt?]]> https://www.jmcelroy.com/?p=47797 2026-10-12T15:33:35Z 2026-10-12T15:33:35Z What makes medical debt difficult to manage? Unlike a car loan or a mortgage, medical debt rarely comes from a planned decision. An emergency or unexpected illness often creates this kind of debt. These are situations entirely outside of your control. This makes it both emotionally and financially harder to manage. In Tennessee, medical debt is one of the reasons people consider filing for bankruptcy.

How does the law classify a medical bill?

Medical bills fall into the category of unsecured debt. This means the debt has no property or collateral tied to it. Due to this, bankruptcy law treats medical bills similarly to credit card debt. Both types are legally dischargeable under federal bankruptcy law. This means your personal obligation to pay them is entirely eliminated.

Can chapter 7 wipe out your medical bills completely?

Qualifying filers can use this option to fully discharge unsecured debts, including medical bills. The process typically takes three to six months. Federal law governs how a court grants a discharge. Filing also triggers an automatic stay, which stops most creditor collection efforts immediately. As a Tennessee filer, you may also use state exemptions to protect certain assets. The state protects home equity up to $35,000 for single filers and $52,500 for joint filers. A $10,000 wildcard exemption can also shield personal vehicles and household goods from liquidation.

When is chapter 13 the right fit for your financial situation?

Chapter 13 takes a different approach. Rather than erasing debt immediately, it builds a repayment plan that lasts three to five years. Medical debt falls into the unsecured category within this plan. As a result, your repayment may only cover a fraction of the full amount you owe. Once the plan period ends, the court can discharge the remaining balance.

Does your income level determine which option you qualify for?

Your income plays a major role in determining which type of bankruptcy you can file. Chapter 7 requires passing a means test that compares your income to Tennessee's median income level. Exceeding Tennessee's median income does not automatically disqualify you from Chapter 7. Allowable expense deductions may still bring your disposable income within the qualifying threshold. Chapter 13 also requires a reliable source of income to fund the repayment plan.

Exploring bankruptcy options for medical debt relief

A medical crisis should not sentence anyone to a lifetime of debt. When healthcare costs become overwhelming, bankruptcy may be an option worth considering. Chapter 7 and Chapter 13 bankruptcy offer different approaches depending on your financial circumstances. Understanding how each chapter works can help you make an informed decision.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Credit card debt hits $1.26 trillion across the U.S.]]> https://www.jmcelroy.com/?p=47738 2026-09-29T16:40:09Z 2026-09-29T16:40:09Z Recent reports show that credit card debt in the United States has reached $1.26 trillion. In the second quarter of 2026, this means that overall credit card debt went up by a stunning $21 billion. The highest credit card debt has ever been is $1.28 trillion. That happened last year, in the fourth quarter. So, according to this information that comes from the Federal Reserve Bank of New York, overall debt is still slightly below the all-time high mark. However, if it keeps increasing at this rate, there is certainly a chance that it could meet or exceed that level in the next 12 months.

Credit card debt often leads to bankruptcy

Many bankruptcy filings involve at least some level of credit card debt. One reason is that people simply have to pay for necessities. Someone needs to buy groceries or pay their bills, and they will use a credit card to do so even if they know they will not be able to pay it off at the end of the month. Another component is that many credit cards have high interest rates. When people fail to pay off the total amount that is due, interest is applied. This can sometimes trap people in a cycle where, even if they are making minimum payments, the interest being added means that their total balance continues to increase. If you find yourself trapped in high levels of credit card debt, it is important to consider all of your legal options, which could include filing for bankruptcy to clear the debt and get a fresh start.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Is it too soon to file for bankruptcy again?]]> https://www.jmcelroy.com/?p=47732 2026-09-19T01:10:17Z 2026-09-19T01:10:17Z Living with overwhelming debt can make it difficult to cover even basic needs. Contrary to what some people believe, serious debt is not always the result of overspending. Medical bills, job loss, divorce and other unexpected hardships can leave someone unable to keep up with payments. Bankruptcy may provide a way to regain control of the situation. Bankruptcy can eliminate or reorganize certain debts. Chapter 7 typically offers relief within a few months, while Chapter 13 allows a person to repay some of what they owe over three to five years. Although it is possible to file for bankruptcy more than once, the timing of a new case can affect whether the filer is eligible to receive another discharge.

How long must you wait to file again?

There is no limit to how many bankruptcy cases a person may file. However, the law does limit how often someone can file for and receive a bankruptcy discharge. The applicable waiting period generally depends on the chapter used in the previous case and the chapter being filed now. The usual waiting periods are:
  • Chapter 13 followed by Chapter 13: Two years
  • Chapter 7 followed by Chapter 13: Four years
  • Chapter 13 followed by Chapter 7: Six years
  • Chapter 7 followed by Chapter 7: Eight years
These periods generally run from the filing date of the earlier bankruptcy case to the filing date of the new one. Because a Chapter 13 repayment plan usually lasts three to five years, someone who previously completed a Chapter 13 case may already have satisfied the two-year waiting period before filing another Chapter 13 case. There may also be exceptions to the six-year waiting period between a Chapter 13 case and a Chapter 7 case. For example, the waiting period may not apply if the filer paid all unsecured creditors in full through the Chapter 13 plan. An exception may also apply if the filer paid at least 70% of those claims and proposed the plan in good faith.

Filing again before you qualify for a discharge

In some circumstances, a person may be able to file another bankruptcy case before becoming eligible for a new discharge. Doing so may still provide temporary protection from collection efforts or allow the filer to address secured debts through a Chapter 13 plan. However, the benefits may be limited, particularly if a previous case was dismissed. Filing another bankruptcy can affect a family’s finances for years, so timing matters. Professional legal guidance can help someone determine whether enough time has passed, whether an exception applies and which type of bankruptcy may provide the best relief.  ]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Can you eliminate alimony with a bankruptcy filing?]]> https://www.jmcelroy.com/?p=47730 2026-08-31T15:50:15Z 2026-08-31T15:50:15Z No, spousal support, or alimony, typically cannot be changed with a bankruptcy filing. If a person has been ordered to pay spousal support, they do still have to follow that court order. Even if their bankruptcy case is successful, they cannot eliminate alimony any more than it could waive an obligation to pay child support. The reasoning is that the court has issued a binding order with another person’s best interests in mind. Alimony is supposed to provide financial support for someone who needs it in the wake of divorce, just as child support is set up to focus on the best interests of the child and give them the financial support they would have had if their parents had stayed married. Even if other types of debt are discharged, these financial obligations remain.

Is bankruptcy still helpful?

Yes, bankruptcy can still be helpful. For one thing, eliminating or consolidating other debt could make spousal support more affordable. A person may have been struggling to pay their monthly support obligations due to other outstanding debt, like high credit card bills, so reorganizing that debt through a Chapter 13 plan or eliminating some of it through a Chapter 7 bankruptcy filing can make it possible for them to make the appropriate alimony payments. In some cases, a person can modify alimony support. Someone who loses their job, for instance, may not realistically be able to pay. But the tactic to do this would be through a modification of the standing court order, rather than a bankruptcy filing.

Navigating complex bankruptcy cases

It is very important to understand the complexities of bankruptcy, including what types of debts can and cannot be discharged. Those going through this process need to know exactly what legal steps to take.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[How does bankruptcy stop creditor harassment calls?]]> https://www.jmcelroy.com/?p=47726 2026-08-26T15:30:12Z 2026-08-26T15:30:12Z Dealing with unpaid bills is stressful enough without your phone ringing every hour. If you're behind on payments, you may already know what creditor harassment feels like: constant calls, threatening letters, and collectors who won't take no for an answer. The good news is that filing for bankruptcy can bring this to a stop almost right away. Here's how it works and why it matters.

What happens the moment you file

As soon as you file your bankruptcy case, something called the automatic stay goes into effect. This is a court order that legally requires creditors to stop nearly all collection efforts against you. That means no more phone calls, no more collection letters and no more lawsuits or wage garnishments tied to the debts in your case. The stay applies immediately, so creditors don't get a warning period. Once your attorney or the court notifies them, they must stop contacting you altogether.

What if a creditor keeps calling anyway

Sometimes a creditor doesn't get the message right away, or simply ignores the rules. If this happens, it's a serious issue. Creditors who willfully violate the automatic stay are liable to the debtor for actual damages, court costs, and attorneys' fees. They may also face punitive damages or court sanctions for egregious violations.  To protect yourself, keep a record of any calls, texts or letters that come in after your filing date, including dates and what the creditor said. This information can help show the court that a violation occurred and support any action you take against the creditor.

A final thought

Bankruptcy law can feel confusing, especially when you're already under pressure from collectors. Talking with an attorney may help make this process easier to understand and give you a clearer sense of what protections apply to your situation. They may also help make sure creditors are notified properly and step in if any of them cross the line after your case is filed. Having someone familiar with the process by your side often brings a sense of relief during an already difficult time.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Can bankruptcy stop a foreclosure?]]> https://www.jmcelroy.com/?p=47724 2026-08-19T15:26:07Z 2026-08-19T15:26:07Z Facing foreclosure can put the future in uncertain terms. It can be very stressful to find out that you are going to lose your home, and you may be interested in what options you have to stop the foreclosure case. One option that people often consider is filing for bankruptcy. For instance, maybe you have so much debt that you have been missing mortgage payments, which is why the lender is going to foreclose in the first place. If you file for bankruptcy, can that prevent the foreclosure?

An automatic stay

In the short term, yes, filing for bankruptcy does pause the foreclosure process. This is due to the fact that the court will issue an automatic stay, which applies to other financial cases pending against you. The foreclosure cannot continue, nor can any other collection efforts, until the bankruptcy case is over. In the long term, though, once your bankruptcy is concluded, you do need to realize that the automatic stay will be lifted. If you are still not current on your mortgage, the foreclosure could resume. Even in that situation, though, bankruptcy can help. If you file for Chapter 7 bankruptcy, liquidate non-exempt assets and eliminate other debts, you may be able to afford your mortgage again. If you file for Chapter 13 bankruptcy, consolidating your debt into a repayment plan, you may restructure your debt so that you can start making your monthly mortgage payments. If so, the lender will not foreclose and you can get current on those payments moving forward. The bankruptcy process can feel complex, especially if you have never gone through it before, so it can help to work with an experienced attorney.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Filing mistakes that could lead to bankruptcy fraud allegations]]> https://www.jmcelroy.com/?p=47723 2026-08-10T15:02:10Z 2026-08-10T15:02:10Z Filing for bankruptcy requires complete and accurate financial disclosure. You must provide information about your income, property, debts, accounts and recent transactions so the court and trustee can properly evaluate your case. Not every filing mistake amounts to bankruptcy fraud. Intent matters. However, errors that appear deliberate, repeated or designed to hide important financial information can create serious problems and may lead to further investigation.

Leaving assets off your schedules

One of the most serious mistakes is failing to disclose property that may belong to the bankruptcy estate. This can include bank accounts, vehicles, investments, valuable personal property, pending claims or other financial interests. Even property you believe is exempt should generally be disclosed. Leaving an asset out because you assume it cannot be taken may create unnecessary suspicion about why it was omitted.

Reporting inaccurate income

Bankruptcy forms require you to provide accurate information about your income. Underreporting wages, leaving outside income or failing to disclose other regular payments can affect eligibility and repayment calculations. An accidental omission may be correctable. However, repeatedly providing inaccurate figures or concealing a source of income may be viewed very differently.

Undervaluing property

Guessing at the value of significant property can cause problems. If you substantially undervalue a vehicle, business interest, jewelry or other asset, the trustee may question whether the value was intentionally reduced to protect the property from creditors. Using reasonable market values and keeping records that support those estimates can help explain how you reached the figures listed in your filing.

Failing to disclose recent transfers

Before filing for bankruptcy, you may have sold, gifted or transferred property. Those transactions may need to be reported even if they occurred before the case began. Transferring valuable property to a relative or selling an asset for far less than its value can attract additional scrutiny, particularly if the transaction appears designed to keep property away from creditors.

Providing inconsistent information

Your bankruptcy schedules, tax returns, bank statements and statements made during proceedings should generally tell the same financial story. Significant inconsistencies can raise questions about whether information was intentionally concealed or misrepresented. If you are concerned that a filing error could result in bankruptcy fraud allegations, seek legal guidance to understand how to correct the record and protect your interests.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Life After Filing: Will Bankruptcy Ruin My Credit Forever?]]> https://www.jmcelroy.com/?p=47722 2026-07-31T05:55:31Z 2026-07-31T05:55:31Z Filing for bankruptcy often feels like a permanent financial setback, yet the legal process actually establishes a structural foundation for long-term recovery. Many individuals worry that seeking court protection under Chapter 7 or Chapter 13 permanently destroys their financial standing. In reality, Tennessee residents who file bankruptcy frequently find a clear, predictable trajectory toward restoring their credit ratings and overall financial solvency.

Initial Credit Adjustments Create Immediate Bottom Limits

Your credit score drops rapidly upon filing a petition, with higher initial scores experiencing sharper immediate declines. However, this sharp initial reduction reaches a baseline floor immediately, halting the compounding damage of persistent delinquencies, defaults and collection efforts.

As the bankruptcy court discharges qualifying unsecured debts, your debt-to-income ratio improves instantly. This structural change eliminates overwhelming liabilities and sets the stage for future stability.

Public Credit Records Age Off Over Time

Credit reporting bureaus retain Chapter 7 filings on public records for ten years and Chapter 13 filings for seven years. Nevertheless, modern scoring algorithms prioritize recent financial behavior over historical entries. The negative impact of the public record diminishes steadily with each passing year, provided you maintain disciplined financial habits and fulfill post-filing obligations without missing payments.

Credit Reconstruction Begins Promptly

Rebuilding a robust financial profile starts long before the official public record disappears. Responsible habits—such as securing a low-limit credit card, remitting timely payments and keeping revolving balances under ten percent—consistently elevate your score. Within two to three years of a successful discharge, many filers successfully secure traditional auto financing or competitive home mortgages.

Professional Guidance Secures Maximum Relief

Tennessee statutory frameworks enforce strict property exemptions, including specific dollar caps on home equity and personal belongings. Retaining a dedicated legal advocate ensures that you properly utilize every available statutory exemption under state law; allowing you to maximize a fresh start and secure your financial independence.

]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[Filing for bankruptcy in Tennessee: What property can you keep?]]> https://www.jmcelroy.com/?p=47721 2026-07-27T10:57:21Z 2026-07-27T10:57:21Z Keeping the family home Tennessee's homestead exemption protects equity in a primary home. A single filer can shield up to $35,000 of equity, while joint owners filing together can cover up to $52,500. These flat-rate limits apply to all Tennessee residents, regardless of the filer’s age or whether minor children live in the home. As long as the equity falls within these limits, a bankruptcy trustee, the court-appointed official who oversees the case, cannot sell the property to satisfy the creditors.

Protecting the vehicle

There is no separate car exemption in the state, but that does not mean a vehicle is at risk. The state’s flexible $10,000 wildcard exemption can cover car equity, cash or nearly any other property. Married couples who file jointly can double this amount, safeguarding up to $20,000 combined.

Other assets Tennessee law protects

Beyond homes and cars, state law further safeguards several key assets, such as:
  • Wages: A portion of earned income stays safe from garnishment during the case.
  • Retirement accounts: Most 401(k)s, pensions and Individual Retirement Accounts (IRAs) receive strong protection, with IRAs protected up to a very high federal cap that covers the vast majority of filers.
  • Tools of the trade: Work equipment valued at up to about $1,900 may stay protected.
  • Clothing and household items: Necessary clothing, family portraits and prescribed health aids stay exempt no matter the value, while most other household items and furniture are preserved using the wildcard exemption discussed above.
These rules mean a fresh start rarely means giving up daily needs or livelihood when pursuing debt relief.

Getting the right guidance for filing

Financial hardship can feel isolating, but state exemption laws exist to help people rebuild without losing their footing. Reviewing a case, confirming current exemption amounts and building a tailored strategy can help preserve what matters most. With the right legal guidance, bankruptcy can become a clear path toward financial stability, not a source of ongoing fear.]]> On Behalf of Jimmy E. McElroy & Associates <![CDATA[How long is a Chapter 13 plan, and how much do filers pay?]]> https://www.jmcelroy.com/?p=47718 2026-07-10T00:54:59Z 2026-07-10T00:54:59Z Every filer has unique circumstances The laws regulating Chapter 13 bankruptcy outline standards for repayment plans, but the terms imposed are different in every case. The duration of payments can be anywhere from three to five years. The amount the filer pays monthly is frequently less than the combined monthly minimums for all of their financial obligations. However, there is often an expectation that they should commit most of their disposable income to those payments. The amount of debt they carry, the value of their personal holdings, their income and even the nature of the debts owed can all influence how much a filer pays each month and how many months they must make payments. Those who have a bankruptcy lawyer supporting them at creditor meetings and while developing proposed payment plans are in the best situation possible to arrange a sustainable plan. Having support can take much of the uncertainty and stress out of a Chapter 13 bankruptcy.]]>