Benefits of Chapter 13 Bankruptcy Over Chapter 7

Chapter 13 bankruptcy is a Debt Reorganization Plan commonly known as “wage earner” in Tennessee.  All of your debts are combined and the Chapter 13 trustee is paid who disburses the payments.

A common question is why would I need to file a Chapter 13 bankruptcy instead of a Chapter 7?

The first reason is to stop the student loan collectors from garnishing your wages and your tax refund.  Student loans are paid through the plan that usually lasts 5 years.  The student loans accept the amount we calculate for their share of the plan and it prevents them from instituting collection procedures for 5 years and the debt is actually paid down.  Also penalties and late fees stop, however, interest still accrues.  The Chapter 13 bankruptcy can enable you to determine a permanent settlement and be free of garnishments for up to 5 years.

The second reason for filing Chapter 13 bankruptcy is to enable you to retain your residential home and an affordable repayment plan.  Filing for Chapter 13 bankruptcy allows you to place the amount you are behind by into the Chapter 13 repayment plan and the mortgage company will pay the same way as other secured creditors by the Chapter 13 trustee.  At the end of the plan, the mortgage will be current and since the remainder of your unsecured debt will get discharged, you’ll be able to afford to make the monthly payments.

For example, if your house payment is $500.00 a month and you’re behind by $3,000.00.  The $3,000.00 would go into the Chapter 13 debt payment plan, the $500.00, which is your regular payment, would also go into the plan so the trustee would essentially be distributing the $500.00 of your regular house payment plus the amount necessary to repay the mortgage arrearages.

The third reason to chose Chapter 13 over Chapter 7 is to pay delinquent child support. While child support can not be discharged in bankruptcy, the arrerages can be paid over the life of the plan (usually five years). This will prevent collection efforts as long as the case is active.

The fourth most common reason to consider filing for Chapter 13 bankruptcy instead of Chapter 7 bankruptcy is having too high of an income to qualify under the means test, which is required to qualify to file for Chapter 7 bankruptcy.  While you may feel that you need or at least want to file Chapter 7, making a little too much money can disqualify you from this type of bankruptcy.  The other way you can be forced to file Chapter 13 Debt Reorganization is if your income exceeds your expenditures.  It would take an analysis from a bankruptcy lawyer to learn if this is a factor.  The means test is a government calculation, which is allegedly supposed to be a test line.  The government’s calculation is based on your income and Internal Revenue Service created living expenditures depending on family size, then create a determination of a Chapter 7 or Chapter 13.  The means test is a calculation using the financial information and expenditures, is designed to determine based on your income or means whether you should be able to qualify for a Chapter 7 bankruptcy.  However, just because you have too much income to qualify for Chapter 7, does not mean that you are not eligible to file bankruptcy all together.  This is one case where Chapter 13 bankruptcy may be the best option.

It is very important to understand, that even if you do not qualify to file for Chapter 7 bankruptcy due to your income, or you’re behind in your mortgage payment and you want to save your house, filing Chapter 13 bankruptcy can help you save your house, your car and stop wage garnishments.

Guidelines for Filing Long-Term Disability Insurance Claims

This article is provided by the Law Offices of John E. Dunlap, P.C.  to assist you in the insurance claims process.  It is not a substitute for legal representation.  Every claim is different, and only by employing a lawyer do you fully protect your rights.  If you have questions about your long-term disability, please call our office at (901) 320‑1603 or email us on our web site.

Locate the original and any addendums of your policy.  Maintaining good records of your contracts is essential, should you need to go to an administrative appeal or litigation.  Do not rely on your employer’s human resources department or insurance carrier to provide those contracts.

Do not try to represent yourself.  Working with an attorney who is experienced in handling these type of claims could mean the difference between a properly prepared claim and one that gets denied.

Monitor dates and deadlines.  If your policy requires a 90‑day filing of proof of loss, make every effort to be several days or even weeks ahead of the curve.  Filing even a day late could turn a claim into a denial.  Moreover, send all correspondence to the insurance company by certified mail and make certain you keep all copies for your own records.

Medical records are probably the most important part of your claim presentation.  You have a right to have a copy of all your tests, records and reports and you need time to review them.  If there are things you don’t understand, ask your treating physician.  If your doctor does not provide a satisfactory answer, obtain another opinion.  If there is information that does not seem correct to you, insist on discussing it and if necessary, request that corrections be made in the proper manner.

Treating doctors are not insurance professionals or lawyers and do not understand many of the elements in determining claim decisions.  Medical records must clearly indicate limitations and restrictions and relate specifically to your occupation and should clearly describe how these problems prevent you from performing tasks necessary to do your job.

Medical records must include documentation that could also serve as evidence of your inability to perform the necessary task associated with employment, whether it’s physical labor or sedentary employment.  Insurance adjusters often fail to consider the cognitive requirements of work, so you must present these aspects of the job.

Every time you have contact with the insurance company, be careful.  Always make detailed notes on who you spoke with, the date, time and details of the conversation.  If necessary, have a friend or professional on the phone or in the room who could serve as a witness on your behalf.  Tell the insurance company representative another person is on the phone line with you and make a note that this has been made clear to all parties.  After each phone conversation, send a letter that describes the conversation and all details.  In the letter by requiring the insurance company to respond if they disagree with the details.

Protect your claim.

No matter how friendly the insurance adjuster may be, they are not your friends.

Filing a disability insurance claim can often result in the possibility of surveillance and review of any material you post on social media.  If your claim involves being unable to travel to get to work, you may be videotaped if the investigator sees you traveling.  If you call the adjuster from a phone not located in your home, caller ID can be established to prove you are able to travel.  Today’s insurance company watches public posts, forums, bulletin boards, chat rooms, social networking sites and any online sources where information can be gathered.  Our office recommends that people refrain from using Facebook or Twitter while the claims process is ongoing.

Filling out insurance forms is much like a lawyer preparing for trial in that every piece of information is a chance to build or destroy your claim.  Always be honest, but do not leave yourself exposed to evidence contrary to what you have stated.  If you have days where you do not feel sick or disabled, be prepared to state how many days a week you’re able to function.  If the disability leaves you unable to do much of anything except between 10:00 a.m. and 11:00 a.m., state this.  If the forms are not long enough, make a note on that form that clearly indicates more information is on the attached page.

If the insurance company instructs you to go for an Independent Medical Examination understand that you are going to be examined by a doctor who is employed and paid for by the insurance company.

If you are ordered to go for a Functional Capacity Evaluation, review your policy to determine if this test is specifically in the language of the policy.  These tests are not necessarily required, and they are often not accurate.  If you do go for the test then you are asked to perform a task you know you cannot do without pain or discomfort, do not do it.  Be certain to document how you feel following the testing, and consider seeing your treating doctor shortly after the test for further evaluation.