When Tennessee residents file for Chapter 13 bankruptcy, they are given either three or five years to complete the repayment program. During this length of time, it is common for someone to need a new vehicle. Fortunately, it is possible to finance a new car while going through bankruptcy. However, the purchase will require approval from the court.
In 2015, Tennessee had the highest rate of bankruptcy filings in the nation; as a matter of fact, the number of filings there was twice the national average. Ergo, the citizens of this fine state are no strangers to the terror that comes with the possibility of not being able to meet their obligations. Moreover, the entire process of filing for bankruptcy can be confusing given the amount of legal red tape surrounding the whole process. For instance, plenty of people are confounded by the difference between Chapter 7 and Chapter 13 bankruptcy.
For many people in Nashville, store-brand credit cards have led to debt that is increasingly difficult to manage. Delinquency rates on these types of cards have reached their highest level in seven years, according to Equifax, the credit reporting agency. The percentage of accounts in default for at least 60 days has risen to 4.65 percent, an increase from 4.08 percent in March 2017. This is the highest level of default on these types of credit card accounts have seen since early 2011.
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.
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.
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.
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.
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.
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.
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.