When Tennessee residents fail to pay a creditor, they are likely to be expected to pay a late fee, and they may also be reminded by the lender that they owe money. If this goes on for an extended period of time, their account may be passed on to collections or sold to a debt collection agency. When the debt is sold, the collection agency will normally report the debt to credit agencies so that it shows up on the debtor’s credit report.
In many cases, this will continue to show up on a credit report for seven years. Even if the debt is paid off, it will still show up on a report, but it will normally be marked as paid. However, not all collections should be shown on a person’s credit report.
One type of debt that shouldn’t be put on or stay on a person’s credit report is debt for which there is no agreement. For instance, unpaid library fines or parking tickets should not end up on a person’s credit report. Additionally, medical bills that are paid by an insurance company after they are late should be removed from a person’s credit report once they are paid.
Although many people are able to deal with unpaid debts and repair damage to their credit score by making payment arrangements, many individuals have debt that is beyond their ability to pay back in the time frame available to them. In these cases, filing for Chapter 13 may be a good option. Filing gives people more time to repay debts, and it can also stop foreclosures. The process usually takes between three and five years, and it requires a court-approved repayment plan. An attorney can often be of assistance in preparing and submitting one.