Tennessee Bankruptcy Lawyers Blog

One would assume that consumer protection laws are intended to do just that - protect consumers. But a Supreme Court ruling issued earlier this month seems to indicate otherwise.

According to SmartMoney, the ruling determines that credit card holders bound by a mandatory arbitration clause can't dispute grievances such as charges or fees - even if those charges or fees appear to be in violation of the Credit CARD Act consumer protection reform set into law in 2010.

Why should this matter to the average cardholder? Because binding arbitration clauses are common in credit card agreements, though most consumers don't even realize their card came with one.

These clauses require that credit card users go through the private arbitration process, as opposed to a jury trial, whether a consumer wants to take a credit card issuer to court or a credit issuer wants to take a consumer to court.

Critics of the 8-to-1 vote are concerned that it will set precedence for big banks and credit card issuers to add more restrictive arbitration language in their fine print.

Consumers are at a significant disadvantage when it comes to arbitration because they are less likely to be able to afford a private arbitrator. Furthermore, many believe companies that handle arbitration are biased in favor of credit card issuers because the issuers are regular clients with billions of dollars to spend. Arbitrators will likely never see a consumer again, but a bank may be a regular customer.

Tennessee bankruptcy lawyers note that it's extremely rare for a consumer to win an arbitration case against a large credit card company. In fact, data in California indicates that only 4 percent of cases between 2003 and 2007 were decided in favor of consumers.

So how does this ruling affect the average credit card holder?

Fortunately most of us won't end up going through arbitration. But the more credit card debt we carry, the more likely it becomes. If you're being hounded by debt collection companies on a regular basis for debts you haven't paid in years, you increase the risk of being forced into arbitration. Being a victim of identity theft also increases your chances.

In addition to preventing consumers from suing in court, the ruling also appears to prevent consumers from joining class act lawsuits against their credit card issuer.

It looks like consumer protection today isn't all it's cracked up to be. This is where Tennessee bankruptcy comes into play. Unlike the latest credit card laws, bankruptcy laws are guaranteed to legally protect consumers, not big businesses.

For folks with mountains of credit card debt, filing for bankruptcy in Tennessee can provide a fresh start. It can stop foreclosure, end wage garnishments, and help you start rebuilding your credit.

The best way to insulate yourself from damage due to surprise interest rate hikes, unfair fees, or creditor lawsuits is to wean yourself off debt.

Continue reading "Amid Weakening Consumer Credit Protection Laws, Tennessee Bankruptcy Can Help" »

A pair of studies released this month look at characteristics that may predict our credit scores - from the region in which we reside to the e-mail address we use.

Findings by free credit score service Credit Karma indicate G-mail users seem to have better credit than Yahoo users. Regionally, plains residents tend to have higher credit scores than those who live in the south or west, according to MSNBC.com.

While it's certainly interesting information, it's also a bit misleading. Credit scores are ultimately determined by behavior, not the e-mail server you use. A history of timely payments, the amount you pay each month, and how much debt you carry relative to your credit limit are some of the biggest components of your score.

Likewise, bankruptcy is also a behavior that affects your credit score. But while some folks believe bankruptcy ruins credit, the reality is that by the time you file for a Tennessee bankruptcy, chances are your credit history is about as tarnished as it gets. Consumers who have spent years making minimum payments, missing due dates, and doing battle with creditors are not going to have very good scores.

By filing for bankruptcy in Tennessee, these consumers can break free of the credit card cycle so that, when their behavior improves, their score is finally able to rise. After all, bankruptcy laws were designed with the consumer in mind.

Let's take a look at some factors behind the best and worst credit card scores, according to the surveys. Keep in mind that credit scores range from 501 to 900, with a higher number indicating a better score.

E-mail Users' Credit Scores (data from Credit Karma)

Yahoo: 641
AOL: 658
Hotmail: 660
MSN: 662
Gmail: 678
Comcast: 686
BellSouth: 695

Now let's take a look at how location relates to credit.

Top Cities with Highest Average Credit Scores (data from Experian via MSNBC.com)

Wausalu, WI: 789
Minneapolis, MN: 787
Madison, WI: 785
Cedar Rapids, IA: 781
San Francisco, CA: 781
Green Bay, WI: 780
Boston, MA: 779
Peoria, IL: 778
Sioux Falls, ND: 778
La Crosse, WI: 777

Top Cities with Lowest Average Credit Scores

Harlingen, TX: 686
Jackson, MS: 701
Corpus Christi, TX: 702
Monroe, LA: 706
Shreveport, LA: 706
Augusta, GA: 709
Bakersfield, CA: 709
Las Vegas, NV: 709
Tyler, TX: 710
El Paso, TX: 710

The good news is that, regardless of where you live, what you do for work, or where your e-mail goes, you have the ability to fix your credit. If you've spent years with a poor credit score caused by debt problems, you may want to consider a Tennessee bankruptcy. Bankruptcy can offer a chance to shed your old debts for a fresh start.

Continue reading "Consumers with Bad Credit Could Benefit From Tennessee Bankruptcy" »

You can't really solve a problem until you admit you have a problem in the first place. For many Americans, this means coming to terms with the fact that we need help with unmanageable credit card debt.

There's no doubt that the majority of Americans are struggling with debt - it's estimated that the average U.S. family carries $4,200 of it, though many folks have much more - yet few are willing to admit to having a problem. In fact, a recent Bankrate.com survey found that 9 in 10 Americans say debt does not interfere with their lives.

Whether the problem is gambling, alcoholism, or credit card spending, denial is often the biggest barrier keeping us from making a life-improving change.

Time and time again, our Tennessee bankruptcy attorneys have seen people make their money problems worse by ignoring the issue, whether it's by underestimating what they owe or holding out hope for a miracle that will magically wipe out debt.

The only way to get out of debt is to take action. If you're not doing something to solve your problem - or if your solutions just aren't working - it's time to consider seeking help from a financial professional. Bankruptcy was created by the government specifically to provide people the opportunity to legally eliminate debt.

You can't ignore your debt burden forever. Do you want hidden fees, foreclosure notices, debt collection phone calls, and wage garnishments to be running your life? You don't have to let it happen.

Bankrate.com features a list of the biggest signs you have a serious debt problem. Find yourself identifying with many of the signs on the list? Filing for bankruptcy in Tennessee may be able to help.

You Don't Know How Much You Owe
Have you conveniently been avoiding the little box on your credit card bill that tells you your balance? Paying just the minimum may help you avoid a late fee - at least momentarily - but it doesn't do anything to stop your debt from growing.

Approaching Your Credit Limit is the Norm
You know that exceeding your credit limit will cost you. But if you're routinely approaching the limit, you're not doing yourself any favors. Much of your credit score is determined by your credit utilization, or the ratio of your debt to your credit limit. Anything over 30% will hurt your score. If it's a one-time scenario, you can probably recover - but if it's happening almost every month, you're carrying too much debt.

You Routinely Open New Credit Lines to Transfer Debt
Do you frequently take advantage of those 0% balance transfer offers? If you transfer debt to a much lower rate and proceed to pay off your balance before the introductory period ends, there's no problem. But if you often find yourself carrying debt and paying interest on yet another credit card, maybe it's time you stopped shifting your debt around and started actually paying it down.

You Almost Never Pay More than the Minimum
The No. 1 sign that you have too much debt is regular reliance on minimum payments. Many credit cards require such low minimums that you may only be covering interest. Can't afford to pay more than 2.5% most months? By failing to actually pay off your balance, you're allowing your debt to grow unchecked.

Debt Is Growing; Income Is Shrinking
When you're dealing with job loss, medical bills, or other overwhelming expenses, you need money. That's why most folks in these situations turn to credit cards. The problem is that by accumulating debt, you actually end up spending even more money thanks to interest and fees. If you're struggling at your current income level but your debt is getting bigger and bigger, getting it under control may require outside help.

Continue reading "Consumers in Denial about Credit Card Debt May Find Help with Tennessee Bankruptcy" »

Dozens of phone calls a day, threatening messages on the answering machine, stacks of letters in the mailbox - sound familiar? It's no wonder that the typical debtor experiences some degree of psychological trauma from the harassment of collection agencies.

Debt collection companies don't care about feelings. They don't care that the economy has forced Americans into debt. All they know is that a barrage of phone calls is an easy way to get debtors to surrender into coughing up cash they can't afford.

A recent Wall Street Journal story offers advice on how to limit headaches caused by the most common collection tactics. That's all well and good, but Tennessee bankruptcy lawyers believe there's an even better way to limit psychological damage - avoiding the problem in the first place.

Did you know that when you file for bankruptcy in Tennessee, harassment from collection companies stops immediately? The moment your case is opened, agencies are notified to cease all direct communications with debtors. From that point forward, the only contact between you and bill collectors will happen in court.

When most people think of filing for bankruptcy, they think of eliminating debt. But that's only one benefit of filing. Bankruptcy also has the ability to stop foreclosure, end wage garnishment, and, yes, even put a halt to harassing phone calls and e-mails. In short, bankruptcy can be the breath of fresh air you need.

Many debtors make the mistake of believing bill collectors will eventually give up. Not so. To understand debt collection agencies, you must understand their incentives. These people are being paid to wrangle up money for lenders. They don't care about your well-being. They don't want to negotiate with you, strike a deal, or find a debt management solution simply because it doesn't benefit them to do so.

Often times, the harassment becomes so unbearable that consumers make a minimum payment just to (temporarily) quiet the relentless collection calls. Unfortunately, this payment often stretches finances enough to lead to more debt, more interest and fees, and more phone calls.

The aforementioned Wall Street Journal article makes some interesting points. In it, a man getting up to 50 collection calls a day employed a caller ID machine with a ring controller to get some peace and quiet from debt collectors. By freeing himself from harassment, he was able to think clearly enough to achieve a 69% reduction in $54,000 of credit card debt. But most people aren't so persistent - or so lucky.

To make matters worse, many Tennessee debtors are falling victim to debt relief companies. These businesses claim to work on your behalf to lower debt, but they won't do it for free. Again, it always comes back to incentives. Just like bill collectors, debt management companies get paid when you pay up. This can mean upfront fees or paying premiums of up to 20 percent of your outstanding debt.

You need a debt relief plan that protects your interests, not the interests of an outside party. This is where Tennessee bankruptcy comes into play.

Continue reading "Tennessee Bankruptcy Helps Avoid Psychological Trauma Caused by Aggressive Bill Collections " »

Mortgage rates have hit historic lows. According to the Tennessean, the average rate for a 30-year fixed mortgage is now a shocking 3.91%.

It's a great way to ring in the New Year for folks who can afford to purchase a home or refinance their current property. Unfortunately, taking advantage of these rates just isn't an option for many consumers.

A large number of Tennessee homeowners have either already refinanced or are unable to get approval for a refinance or modification because of underemployment or a bad credit score. As for Uncle Sam's effort to help underwater homeowners, the Housing Affordable Refinancing Program (HARP) is still on hold while an expanded program is developed.

As Tennessee bankruptcy lawyers have discussed here before, one of the biggest problems with HARP is that it requires the participation of lenders. That means that if your lender isn't involved with the program, you can't qualify - whether or not you have appropriate income or credit.

Filing for Chapter 13 bankruptcy is a solution that works for almost everyone, regardless of your lender, your earnings, or the condition of your credit.

Thousands of Tennessee residents owe more on their mortgage than the current value of their home. Unemployment, medical bills, and credit card debt coupled with higher costs of living can eat into money needed for mortgage payments.

When you're on the verge of losing your house, you don't have time to wait for lenders to put you through a lengthy application process, only to tell you that a modification or refinance isn't possible - especially now that banks are getting more aggressive and taking swifter action to deal with homeowners who have fallen behind on payments.

A Tennessee bankruptcy filing has results immediately. From the day you file for Chapter 13, foreclosure is prevented or stopped - whether you missed your first house payment or were hours away from having your home sold on the auction block. Without having to worry about losing the roof over their head, many Tennessee bankruptcy lawyer clients find themselves better able to focus on regaining control of their finances.

For most of us, the mortgage isn't the problem - instead, it's other types of debt, such as credit card debt and hospital bills, that overwhelm our budget. A Chapter 13 bankruptcy filing allows debtors to work out an affordable payment plan so that much of the debt can be paid back over a manageable period of time. Whatever is left over when you've completed your plan is discharged free and clear.

If you're tired of being teased by low rates that are out of your reach, filing for bankruptcy in Tennessee can provide a tangible solution and much-needed legal protection - fast.

Continue reading "When Refinancing Isn't Realistic, Tennessee Bankruptcy Can Stop Foreclosure" »