Tennessee residents may be using their credit cards more than in the past. According to the Federal Reserve, Americans have accrued $3.79 trillion in consumer debt. That is an increase of $15.2 billion in February according to data from a report it issued on April 7. Credit card debt increased by 3.5 percent on an annual basis to $1.1 trillion after it dropped by 3.2 percent in January 2017. That was the first drop since April 2013.
It was believed that the January reduction in credit card debt was the result of debtors trying to pay down their holiday expenditures. Installment loans such as those used to go to school or buy a car increased by 5.3 percent in February to $2.79 trillion. Overall, those who study the economy say that it is in the best shape since 2008. However, consumers are still cautious with their money as the memory of the Great Recession lingers.
Individuals who are looking for debt relief may file for bankruptcy to achieve that goal. When a person files for Chapter 13 bankruptcy, he or she is generally entitled to a stay of creditor collection efforts such as repossession or foreclosure. There may be other benefits to bankruptcy such as having debts reorganized over a payment period of three or five years. During this time, repossession or foreclosure generally cannot take place.
Those who file for Chapter 7 bankruptcy may see their debts erased within weeks or months of asking for protection from creditors. An attorney can determine which chapter clients might be eligible for. Legal counsel may also advise them as to the impact that filing may have on their credit score or credit report.