Many debtors in Tennessee who are struggling to pay their bills cut their credit cards to avoid overspending. While this may seem like a smart way to avoid new debts, credit cards can be an asset for those trying to rebuild credit.
It may be possible for Tennessee consumers to settle credit card debt for less than what they owe. However, it is important to consider the potential consequences of doing so. For example, a debt settlement may only be available to those who can show evidence of a financial hardship. Individuals who are planning on settling their debt should also understand that they can do so on their own without going through a third party.
Student loan debt throughout Tennessee and across America has risen to more than $1.5 trillion. However, for those between the ages of 25 and 34, credit card debt is actually a larger burden. According to the 2018 Planning and Progress Study from Northwestern Mutual, credit card debt makes up roughly 25 percent of the debt burden for those in that age group. Student loan debt makes up about 16 percent of the debt burden for someone aged 25 to 34.
With student loan debt on the rise and families struggling with the high cost of medical care, more households may be carrying an unmanageable debt load. Some of them may want to consider filing for bankruptcy.
Financial troubles strike people in Tennessee at all stages of life. Seniors represent a growing group of debtors overwhelmed by too many bills and insufficient retirement savings or benefits. Rising health care costs increase the pressure on older people as well. A report from the Employee Benefit Research Institute indicates that households headed by someone 75 or older have an average debt of $36,757 as of 2016 compared to $30,288 in 2010. Some debtors might salvage their positions by analyzing their budgets, adjusting their lifestyles and reaching out to creditors.
Debt continues to be a major concern for people of all generations in Tennessee and across the country. Young people ages 16 to 20, known as "Generation Z," already have a significant average debt of $4,343 according to a survey of 2,000 young adults conducted by financial company Charles Schwab. Young millennials, aged 21 through 25, have an average of $11,663 in debt. These sums include student loan debt as well as credit cards and other form of personal or consumer debt.
The financial pressures that can drive anyone in Tennessee to choose bankruptcy hit seniors especially hard. A new report based on data collected by the Consumer Bankruptcy Project revealed a large increase in the number of people 65 and over who have declared bankruptcy. As of 2016, one out of every seven bankruptcy filers fell into this age group. Since 1991, the number of senior citizens in bankruptcy court jumped 480 percent.
According to the National Consumer Law Center, over half of all accounts in collections are medical debts. Tennessee residents who aren't sure if they owe a medical debt attributed to them should first contact their insurance company to confirm that it is legitimate. If the bill is legitimate, it may be possible to negotiate a lower balance. Individuals can use a medical debt advocate to help with negotiations.
When a person in Tennessee or any other state files for bankruptcy, he or she is usually granted an automatic stay of creditor actions. However, this stay can be violated if a creditor didn't know about the bankruptcy or wasn't aware of the law. In the event that the creditor knew about the bankruptcy, any violation of the stay could be considered willful.
According to one report, 43 million people around the United States who have credit cards believe that having a balance can improve their credit scores. The report details the result of a June 2018 survey that had 1,000 adult respondents.However, according to one senior industry analyst, this is a myth. While how close individuals come to charging up their spending limit is included in the five main benchmarks that create a credit score, having a credit card balance is not.