Consumers in Tennessee may have more money to use for savings and purchases as across the United States, the median household income has risen by 30% in 10 years. While this is good news, Americans are dealing with medical costs that are growing faster than income. Since 2009, medical costs have gone up by 33%.
Credit card charge-offs on the rise
A number of credit card companies are reporting high rates of charge-offs. A charge-off is a loan that the creditor has determined it will not collect. Overall, the charge-off rate rose to its highest point since 2012's second quarter and was reported at 3.82% for the first quarter of 2019. This according to data gathered by Bloomberg Intelligence. People in Tennessee who are struggling to pay debts may take solace in the fact that they're not the only ones.
Medical debt causing older Americans to go bankrupt
Roughly 12% of those who file for bankruptcy in Tennessee and other states are 65 and older. The rate was only 2% in 1991, and there are several reasons why older Americans are doing so more frequently. Generally speaking, older people are less likely to work, which may make it harder to pay their medical bills. Of those over age 65 who file for bankruptcy, 60% do so because they can't afford to repay a medical debt.
What to know about America's credit card debt
Americans owe a cumulative $900 billion to credit card companies. According to the Consumer Financial Protection Board, there are reasons to be worried that it will be difficult to pay off this balance in a timely manner. Of course, there are also reasons to believe that Tennessee residents and others shouldn't worry too much about paying down their debt. Low unemployment and low interest rates have made it possible for debtors to make their payments in a timely manner.
How bankruptcy impacts credit scores
Tennessee residents who are struggling to pay their bills are sometimes reluctant to file for bankruptcy because of fears over what it could do to their credit scores. A Chapter 7 bankruptcy will remain on credit reports for up to 10 years and a Chapter 13 bankruptcy will appear for up to seven years, but that does not mean scores will remain low. Credit scores generally fall when a bankruptcy is filed and then begin to increase after it has been discharged.
The power of the automatic stay in a bankruptcy case
Filing for bankruptcy in Tennessee may put a stop to a foreclosure or repossession. It could also prevent utilities from being shut off or a landlord from evicting a tenant. The automatic stay can also put a stop to wage garnishment, which would allow an individual to bring home a larger paycheck until the stay is lifted. Those who owe money to the IRS could be able to avoid a lien on their property while the stay is in place.
Credit card balances increasing throughout America
Those who live in Tennessee have the 17th highest average household credit card balances in the United States. Households in California owe an average of $10,175 in credit card debt, which is the highest in the United States. During the second quarter of 2019, the state added $4.4 billion in new debt, which was the most in the country. Altogether, Americans owed more than $1 trillion to credit card lenders at the start of 2019.
Reasons for decline in bankruptcies unclear
A report written by John Roberts, the Chief Justice of the Supreme Court, shows that bankruptcy rates are at their lowest in 10 years. The reasons for the lull in filings may have more to do with people being broke than secure, however. People in Tennessee and across the country might not be filing for bankruptcy because they can't afford to file and they have few assets to protect. Bankruptcy rates do not necessarily indicate the economic health of the country.
How to incur new debt during a Chapter 13 case
Tennessee residents and others who have filed for Chapter 13 bankruptcy may be allowed to incur new debt while their cases are ongoing. However, debtors must get a court's permission to do so. Failure to do so could result in a case being thrown out and the vehicle being repossessed. There is also a possibility that a debtor could be sued by his or her creditors.
Women often struggle with credit card debt
A new study has found that women are less confident than men that they can pay off their credit card debt. Specifically, it found that 26% of female respondents expressed doubt that they could pay their balances in full this month. Only 14% of male respondents felt the same way when asked that question. On average, women in Tennessee and throughout the country make 80% of the median annual income that a male does.
