Lefkovitz & Lefkovitz

Nashville Office 615-256-8300       Cookeville Office 931-400-2218

Nashville Office 615-256-8300
Cookeville Office 931-400-2218

Serving all of Middle Tennessee’s Bankruptcy Needs

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Creating a debt repayment strategy

On Behalf of | Nov 8, 2018 | Chapter 13 |

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.

Debtors can benefit by reviewing their existing debt balances and better understanding the repayment terms. Ideally, an individual will know the repayment term, interest rate and current balance on a credit card or other debt balance. It is also worth noting how often the interest compounds on the debt as balances that compound more frequently result in more money being paid to the lender. Reviewing existing loan terms can make it easier to determine which balances to allocate additional money to first.

Individuals who are looking for a fresh financial start may find it by filing for bankruptcy. While it may have an impact on a person’s credit score, it might also make it possible to discharge debts or strip liens. In some cases, it could be used to renegotiate secured loan terms. Generally speaking, creditors are not allowed to foreclose on a property or repossess an item while a bankruptcy case is still open.

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