Nashville Bankruptcy Law Blog

Analysts from LendingTree examined the rates of spending in November and predicted that the credit card balances of Americans would increase by at least 5 percent before the end of 2018. When the balances of credit cards rise, so does the cost of the associated debt service. People in Tennessee and across the U.S. spent more than $100 billion from January through November 2018 on credit card fees and interest, and annual percentage rates are higher than ever, averaging from 16 to 17 percent.

Debt overall is on the rise as well, with Yahoo! Finance reporting that consumer debt is expected to top $4 billion before 2019 begins. Since 2013, consumer debt has risen by $1 trillion. The consumer debt numbers break down into $2.9 trillion in student loans, auto loans and other non-revolving debt and $1.04 trillion in credit card debt. These consumer debt figures do not include mortgage debt. Non-revolving debt has increased by 30 percent and revolving debt by 22 percent since 2013.

Many consumers in Tennessee who have accumulated debt they cannot pay back choose to file bankruptcy to stop creditors from calling and get a financial fresh start. Debtors can only file for a Chapter 7 bankruptcy every eight years.

Debtors who have previously filed for a Chapter 7 may be able to file another type of bankruptcy before eight years has passed. A debtor who wants to file a Chapter 13 bankruptcy can do so after four years have passed since they filed a Chapter 7 bankruptcy.

For millions of homeowners, the difficulties of the 2007-2010 Great Recession are easy to remember. In many parts of America, inflated home values plummeted, abundant business seemed to dry up dramatically, and unemployment skyrocketed. Home equity lines of credit became much more difficult to obtain, and once-ubiquitous refinancing money became far more scarce.

Recent years have been fatter for homeowners, with home values rising significantly and unemployment dipping to low levels. But are we headed for another burst housing bubble? Should you be more concerned about your personal debts? What if you're considering bankruptcy in the wake of a personal financial problem?

Household debt for those living in Tennessee and throughout the country increased by $63 billion in the first quarter of 2018. That was the 15th straight quarter in which household debt increased. Accruing debt may make it harder to achieve long-term financial goals, so it is a good idea to create a path to becoming debt-free or being able to better manage an existing debt load.

While bankruptcy may be an option for some, it is important to understand the pros and cons of doing so. It is also important to note that it isn't necessarily a viable option for those with student loan or other priority debts. Therefore, debtors may want to first consider creating a repayment plan with their lenders. It is worth noting that paying less than the entire balance may harm an individual's credit score.