According to a report from Experian, the average credit card debt in America is $6,354. In Tennessee, the average credit card debt is $5,975. On average, Americans carry 3.1 credit cards to go along with 2.4 retail cards. While many people use credit cards to accumulate rewards points or other perks, it is a good idea to pay the balance off each month. The report found that 43 percent of those who have a balance carry it from one month to the next.
How rising interest rates impact consumers
While a strong economy offers many benefits to Tennessee residents, it can also lead to higher interest rates and more debt. As the economy strengthens, individuals may first accrue more debt than they can actually afford to pay off in a timely manner. After they acquire the debt, rising interest rates push monthly payments higher, which can make them harder to keep up with.
Some misconceptions about bankruptcy and credit
When people in Tennessee file for bankruptcy, it does not necessarily mean they will be unable to rebuild their credit again. A Chapter 7 bankruptcy stays on the credit report for 10 years, but a Chapter 13 bankruptcy remains there for only seven. Furthermore, liens, judgments and some other debts discharged in bankruptcy also fall off the report after seven years.
American credit card debt on the rise
Americans, including Tennessee residents, are racking up a lot of debt according to a new report by WalletHub. In 2017, U.S. consumers accumulated $92.2 billion in credit card debt, which is the most in 10 years. They also added nearly $68 billion in credit card debt in the final quarter of last year, which is the highest quarterly amount in three decades. Overall, the Federal Reserve estimates that Americans currently owe more than $1 trillion in outstanding credit card balances.
Federal Reserve chair questions student debt bankruptcy policy
Tennessee residents who have ever received student loans for college may recall being warned that student loans must be paid even if the borrower ever declares bankruptcy. Though bankruptcy can dismiss other types of debt, student loans are banned from discharge. The chairman of the Federal Reserve does not agree with this policy, according to statements he made at a Senate banking committee on March 4.
Medical debt may be challenging for everyone
For Tennessee residents and others across the country, medical debt is the most common reason to file for bankruptcy. Of those who have insurance and are under age 65, approximately 20 percent say that they have trouble paying medical costs. Although seniors are most likely to have health issues, members of Generation X have the highest levels of medical debt. A person in this generation has a medical debt load of $19,670 on average.
Courts may reshape "cram down" modifications
A series of bankruptcy court decisions could signal an impending shift in the way Tennessee courts treat residential mortgages. In a number of cases, Ohio bankruptcy judges greatly expanded a debtor's ability to "cram down" a mortgage on their primary residence. This marks a stark change from how most courts treat these mortgages.
Chapter 13 bankruptcy and foreclosure: Four things to consider
Many people find themselves behind on their mortgage payments because of an unforeseen event like a job loss, a business problem, an expensive medical event or a divorce. Some consumers consider a Chapter 13 bankruptcy filing to stop the foreclosure process and save their homes.
Pitfalls with medical credit cards for consumers
A survey by the Kaiser Family Foundation found that approximately 33 percent of people around the country have trouble paying their medical bills. Tennessee patients who have used a medical credit card to pay for these expenses may not be fully aware of the consequences. One reason is that people sometimes sign up for these types of cards without fully understanding the terms.
Which generation struggles the most with debt?
Many Tennessee consumers struggle with multiple types of debt, including credit card bills, student loans, medical bills and unpaid taxes. According to one report that compared how different generations were managing their debt, members of Generation X are struggling more than baby boomers and millennials.
