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.
When filing for bankruptcy is a good decision
During the financial crisis, there were 1.6 million bankruptcy filings per year. While that number has dropped by roughly 50% in recent years, it doesn't necessarily mean that Tennessee residents are doing better financially. In some cases, individuals don't file for bankruptcy because they can't afford the $1,000 or more that it can cost to do so. However, the benefits of filing may outweigh the cost to do so.
Chapter 13 bankruptcy offers additional choices for debtors
Many people in Tennessee struggle to make ends meet, even if they have significant assets or properties that they want to keep or make a substantial salary. Credit card debt, medical bills and other expenses can put people's financial health and credit rating at severe risk, especially when they wind up dealing with creditor calls and debt collectors. People often think that they can only declare bankruptcy if they give up all of their assets. However, Chapter 13 bankruptcy offers an option that allows people to retain their property while paying off their debts through a special, court-approved repayment plan.
How to respond to a debt collection lawsuit
In Tennessee and across the United States, people who are experiencing severe financial challenges may need to contact an attorney regarding debt relief. Delinquency in mortgage payments and credit cards may lead to a constant bombardment from creditors attempting to collect payments. A debtor may have the ability to stop creditor harassment by taking the right legal steps. A person who receives a court summons or official complaint from a creditor needs to respond promptly.
Millennials are buried in credit card debt
Young people in Tennessee need to be careful with credit cards. When they take on credit card debt, it can be difficult for them to get out of debt because of the high rates of interest that card issuers charge.
