Tennessee Bankruptcy Lawyers Blog

The good news is that the economy is showing signs of life.

The bad news is that the recession has left many of us with so much debt that we won't be able to take advantage of the economic improvement.

As The Tennessean reports, home construction, factory output, and employment - all important economic indicators - are on the rise. Meanwhile, consumer borrowing and spending are picking up.

Yet one in five families in the U.S. owes more on credit cards, doctor's bills, and other forms of unsecured debt than we have in our savings, according to USA Today.

During the recession, many folks were forced to dip into savings and rely on credit card spending to make ends meet. Now we're left with the burden of large and expensive debts - and no cash cushion to serve as a safety net.

Since our credit card bills are so high, many of us have no choice but to continue relying on plastic for everyday payments.

When you're spending beyond your means without any savings to fall back on, all it takes is one missed paycheck or other unexpected expense to start a downward spiral into wrecked credit and foreclosure.

Getting finances under control means getting debt under control.

If you're carrying just $10,000 in credit card debt at an 18 percent interest rate, it could take you 20 years to pay it off - and that's assuming you make every payment on time.

For families with too much debt to manage alone, Tennessee bankruptcy can be a practical solution. In many cases, credit card debt can be reduced or dismissed with a bankruptcy filing.

For those who qualify for Chapter 13 bankruptcy, filing can also stop foreclosure - even if the process has already begun.

With the weight of debt off your shoulders, it may finally be possible to enjoy financial freedom.

Continue reading "Economy Picks Up, But Consumers Are Still Weighed Down by Debt in Tennessee" »

American consumers are traditionally pessimistic about the national economy. Yet when it comes to our own economies - our family finances - we can be optimistic to the point of default.

From mounting credit card debt to missed mortgage payments, today's average consumer faces big financial troubles. But when it's time to fix our finances, we tend to take baby steps.

We chalk the money problems up to a temporary issue, like those unexpected car repairs or that bigger-than-anticipated medical bill. We optimistically hope for a solution, such as that pay raise our boss mentioned last year. We might make a few budget tweaks here and there, but for the most part we continue spending as usual, using credit cards to cover the gap between income and expenses.

Before long, our credit cards are maxed out, our house is on the verge of foreclosure, and that raise that we were holding out hope for never came through.

Half-baked solutions produce half-baked results. If you want to overcome overwhelming debt, it takes more than wishing and hoping - it takes action.

As our Tennessee bankruptcy lawyers point out, businesses routinely get themselves into financial difficulty. And when they do, the management team doesn't sit around second-guessing themselves, feeling embarrassed or hoping for things to get better. They make cold-blooded, calculated decisions that produce big results fast.

If a current strategy isn't working, businesses change course. This could mean downsizing, cutting costs, or filing for Tennessee bankruptcy - or "reorganization," as the business world likes to call it.

Consumers have a tendency to take bankruptcy personally. It's why many folks wait to file until we're out of all other options - and money. But by viewing Tennessee bankruptcy as a business decision, not a reflection of character, many consumers could finally attain control over debt.

A mortgage modification or budget adjustment may be able to save a few hundred dollars a month, at best. Our Tennessee bankruptcy clients routinely save thousands of dollars each month - and have the ability to stop foreclosure, repossessions, and harassment by bill collectors.

Big problems take big solutions. If you're buried in credit card debt or behind on your mortgage, bankruptcy may be the answer.

Continue reading "To Repair Finances, Consumers Must Take Pragmatic Approach to Cutting Costs, Filing for Tennessee Bankruptcy " »

Bankruptcy was created to help Americans relieve the burden of impossible debt. Yet for the past 7 years, there was one important type of debt it couldn't ease: student loans.

But some legislators are bent on changing that, according to The Wall Street Journal.

In 2005, Congress revised bankruptcy laws to exclude the discharge of debt from education loans, except in rare circumstances. The theory was that, without collateral like homes and cars, young graduates would find it all too easy to walk away from their obligations if bankruptcy was a possibility.

What Congress couldn't foresee was just how out of control the student debt crisis would get within the next decade.

Earlier this year, the collective total of education loan debt reached the $1 trillion mark, higher than the nation's collective credit card debt.

Meanwhile, college graduates are finding it difficult to make payments. It's estimated that 27 percent of borrowers who have begun paying back loans are already delinquent.

Some are referring to the situation as the next big economic bubble. For the many young grads struggling to find decently-paying jobs, paying down debt may not currently be possible. Not surprisingly, young adults are putting off major purchases like homes and cars, which is having an effect on the entire economy.

A proposed bill would allow the most overwhelmed graduates to file for bankruptcy in Tennessee and other states. Unfortunately, even if it passed, it would only apply to a small portion of borrowers - those with private loans from banks and other lenders.

Ninety percent of school loans are government-backed, and therefore wouldn't be eligible for bankruptcy.

However, Tennessee bankruptcy may still offer indirect assistance to students, and families of students, drowning in student loan debt.

By relieving other forms of unsecured debt such as credit card debt and medical expenses, filing for bankruptcy may help debtors better afford loan payments, lower their overall debt burden, and eventually begin rebuilding credit.

Continue reading "Concern About Student Loan Debt Drives Discussion Over New Tennessee Bankruptcy Laws" »

In the past, Americans have tended to put their tax refunds toward family vacations, new cell phones, and other fun indulgences.

This year, however, many cash-strapped consumers are spending their checks from Uncle Sam on something a little less frivolous - but potentially more rewarding in the long-run.

More than 200,000 Americans hope to apply their refunds toward a bankruptcy filing, according to the National Bureau of Economic Research.

Personal bankruptcy filings typically rise around the time when refunds get mailed out, but the surge should be even more pronounced in 2012, reports The Tennessean.

While Tennessee bankruptcy usually pays for itself many times over by helping consumers reduce all-consuming debts, it has become significantly more expensive since 2005, when U.S. bankruptcy laws were made more complex in order to prevent bankruptcy abuse.

As a result, many of the people who stand to benefit most from bankruptcy - such as families at high risk of foreclosure and swamped in credit card debt - tend to put off filing while they wait for an infusion of cash. Meanwhile, their debts grow larger and unpaid bills pile up.

Some argue that, rather than prevent bankruptcy abuse, the new laws have just made it more difficult for those most in need of help to receive relief.

With the average tax refund expected to be approximately $3,000 in 2012, many families will have more than enough to file for bankruptcy in Tennessee.

Obviously, consumers who can afford to pay down debt with their refund won't need to file. However, many of us have debts that have spiraled completely beyond our control.

Whether it's due to overwhelming credit card debt or massive medical bills, it can be almost impossible to catch back up when you've missed numerous payments and put your credit score through the ringer.

It may be hard to commit to covering bankruptcy costs when other bills need paying, but only bankruptcy has the ability to pay off for years to come. For many folks, bankruptcy has the power to stop foreclosure and either reorganize debts into manageable payments or discharge them entirely.

Filing for bankruptcy may not be as fun as putting your refund toward a family vacation, especially when you've been scrimping and saving for months and are in desperate need of a splurge. But bankruptcy can put you on the path to financial recovery so that one day you'll hopefully be able to enjoy life's little indulgences - without the guilt of having too much debt.

Continue reading "Rising Number of Consumers Plan to Put Tax Refund toward a Tennessee Bankruptcy Filing" »

There's good and bad news for Tennessee homeowners. Homes sales are picking up - but prices aren't, reports The Tennessean.

Compared to a year ago, sales of Middle Tennessee homes rose by 17 percent in March and 24 percent for the entire first quarter, according to the Greater Nashville Association of Realtors.

Some homes received multiple offers, resulting in bidding wars. Homes are also turning over more quickly. With less time spent lingering on the market, foreclosed properties may be less likely to have a negative impact on the values of neighboring houses.

But while prices were shown to rise slightly for some areas, they declined for others.

One realtor noted that today's prices are about equivalent to what we saw in 2002 - a full decade ago.

While quicker turnover helps home values, the sale of foreclosed homes still affects the values of other houses in the neighborhood.

Meanwhile, obtaining a mortgage remains a challenge for potential home buyers who have damaged credit due to overwhelming debt and missed payments.

For many hurt by today's real estate values, Tennessee bankruptcy may offer relief.

Bankruptcy was created with the sole purpose of assisting struggling consumers.

For folks with underwater mortgages, filing for Chapter 13 bankruptcy can provide an affordable payment plan for unsecured debts and late payments. So long as payments are made on time over the designated 3-5 year period, you can keep you home.

If carrying too much debt is keeping you from qualifying for fair interest rates - or from being able to qualify for a loan or credit card, period - a bankruptcy filing may be able to reduce other obligations so you can begin reducing your debt balance and making timely payments, both moves that will eventually lead to improved credit.

When you've exhausted other options, finding relief through bankruptcy in Tennessee can be a breath of fresh air - and a fresh start for your finances.

Continue reading "Local Home Sales Rebound, but Tennessee Foreclosures Continue to Drag Down Property Prices" »

Most parents would do anything to help their kids succeed. But by co-signing loans for young adults, many families are unintentionally making things more difficult.

Despite everything Americans have learned in recent years about having too much debt, we are putting our kids under immense pressure to borrow money.

With tuition rising rapidly, most students don't believe they can achieve an education without taking out student loans. With the cost-of-living high and the number of job positions low, young adults are making ends meet with credit cards. And when it comes time to buy a car or home, many young people can't gain approval without assistance.

As a result, more students are asking for help from moms, dads, grandmas, grandpas, aunts, and uncles, say Tennessee bankruptcy lawyers. By co-signing loans, these adults believe they can help their young relatives attain financing and establish a credit history.

But the benefits of borrowing are quickly erased when the primary borrower - the person you co-signed for - cannot afford to pay back the money.

According to a recent Business Insider story, as many as three-quarters of all co-signers are left to foot the bill after the primary borrower fails to make payments. Many must file for Tennessee bankruptcy in order to regain control over finances.

Not all young people who default on loans are recklessly irresponsible. In fact, many are intelligent and motivated young adults who simply haven't been able to achieve the income necessary to keep up with their bills in today's economy.

When your name is attached to their credit card debt or loan, you are liable for making any payments they cannot afford. In the case of a default, your credit score, home, and life savings will be at risk. In fact, a growing number of parents are facing foreclosure as a result of providing financial help to their children.

Not only can co-signing loans have negative consequences for parents, but it also causes trouble for young borrowers.

Many young people learn to use credit before they learn to use cash, making it impossible to understand important concepts such as budgeting and saving.

With poor credit scores from the get-go, young adults are unable to qualify for loans or forced to accept ridiculously high interest rates.

If you can afford to part with the money, making a personal loan is a lower-risk option because, unlike with co-signing, a default won't be reflected on your credit score. If the damage has already been done and you're suffering the consequences of a co-signing gone bad, bankruptcy may be able to help.

Chapter 13 bankruptcy can allow the primary borrower to make payments over a period of time, preventing default and protecting the co-signer. If lenders agree to release you from liability, you may be able to file for bankruptcy yourself.

While Tennessee bankruptcy can't be used to discharge student loans, it can free up money by reducing or eliminating credit card debt and other unsecured debts.

Continue reading "Parents Who Co-Sign for Kids May Be Stuck With Credit Damage, Tennessee Bankruptcy" »

Most of us would rather eat glass than knowingly sign up for a credit card with a 365% APR. Yet consumers are increasingly being tricked into loans with exactly that kind of sky-high interest rate - by their own banks, according to CNN Money.

Called advance loans, these short-term loans provide quick cash for bank customers with direct deposit checking accounts.

The arrangement is strikingly similar to that of payday loans, which are the cause for a large number of Tennessee bankruptcy filings each year.

Both payday and advance loans allow struggling consumers to pay the bills between paychecks. But because the balances and fees are due in full just two weeks to a month after the loan is established, it's common for borrowers to be unable to pay the money back.

As a result, many recipients of payday and advance loans are forced to take out an additional loan to pay off the first.

What makes the latest advance loans especially dangerous is that banks can debit the amount due directly from a person's checking account as soon as a recurring deposit - such as a paycheck - a is made.

Instead of just being unable to pay back the loan, now borrowers are also unable to pay any important bills, from the mortgage to the phone bill, because they never received their salary.

The loans have consumer protection groups crying foul. With big banks pushing predatory short-term loans, bank accounts are morphing from an important savings tool into an unsafe place for money. As a result, consumers may be encouraged to close bank accounts - and perhaps rely solely on credit cards and payday loans.

Short-term loans can result in the same vicious debt trap as credit cards, but because interest rates are much higher, consumers get into more trouble more quickly.

According to CNN Money, the average advance loan is for 10 days and charges $10 per $100 - but because the average consumer remains indebted to the bank for 175 days, the annual percentage rate can end up at more than 300 percent!

It's hard to turn down quick cash when you're living paycheck to paycheck, even when you know that the terms don't make sense. For many, bankruptcy is the only way to break the cycle.

If you're handing over every paycheck to the bank, you're essentially working for them. But as a customer, your bank should be working for you.

By allowing you to make manageable payments on unsecured debts - or discharge the debts entirely - filing for Tennessee bankruptcy can give you the foothold you need to get your finances, and your life, back on track.

Continue reading "As Banks Trap Consumers in Cycle of Advance Loans, Nashville Bankruptcy May Offer Relief" »

There's a common stereotype that bankruptcy filers are unrestrained spenders. But statistics show that more Americans file for bankruptcy because of medical bills than credit card debt.

Hospitals and doctors are increasingly farming out patient bills to debt collection companies, according to a recent Associated Press story.

Between 2005 and 2010, the number of Americans contacted by debt collection agencies for unpaid medical debts rose from 22 million to 30 million.

Of these cases, an estimated 3.4 million Americans still have credit reports that show medical debt, even after the debt has been paid.

When your debts get kicked back to collection agencies, it automatically drops your credit score - even if you end up paying the bill.

In the AP story, a couple with seemingly good credit applied for a home loan, only to learn that a $200 bill they didn't even know about had been sent to a collection company, sinking their credit score and their chances of getting the mortgage.

CNN Health estimates that 60 percent of people who file for bankruptcy today do so because of difficulty paying medical bills. But here's the real shocker: nearly 80 percent had health insurance.

In more and more cases, unpaid medical bills stem not from lack of coverage, but from gaps in coverage such as deductibles and co-pays.

When combined with expensive mortgages and unsecured debts - such as credit card debt - small medical bills can be enough to push someone in an already precarious financial situation over the edge.

Sometimes a bill may be affordable, but it goes unpaid due to a dispute with the insurance company over a billing error or other problem. That debt can still be sent to a collection agency - and it can still drop your credit score.

Despite health care reform, the costs of medical treatment are getting more troublesome for American consumers. Tennessee bankruptcy is often the most realistic solution.

Health care is supposed to make us better, not make us sick with stress. If medical debt is causing you pain - either alone or in combination with other forms of debt - filing for bankruptcy in Tennessee may be able to provide relief.

Continue reading "Lingering Medical Bills Are Causing More Consumers to Turn to Tennessee Bankruptcy" »

Tennessee universities are short on cash, and its students who are bailing them out.

While Tennessee funded 55 percent of public college budgets in 2002, a decade later the state is only covering 30 percent, according The Tennessean.

As a result, students are being crushed under a load of ever-increasing debt. Students at Middle Tennessee State University, for example, now have a cumulative student debt of $63 million - or $5 million more than the previous year.

Meanwhile, scholarships are increasingly more difficult to come by. For college students lucky enough to find financial aid, many programs are covering smaller percentages of expenses.

Despite threats by President Obama to withhold federal aid if colleges don't stop hiking costs, tuitions keep going up.

Typical student debts can range anywhere from $10,000 to $100,000 by graduation time.

When economic times are good, it's possible for new grads to pay the bills with an entry-level job. Unfortunately, today's economy means many graduates are working at the local coffee shop or fast-food joint rather than a corporate office.

Without a decent paycheck, it's easy for students and grads to get in the habit of relying on credit cards to cover costs while they continue to pay school loans. In fact, many young people are racking up credit card debts as high as their student debts.

Some are speculating that the rise of unmanageable student debt will be the new housing-bubble crisis.

In many cases, bankruptcy can provide relief.

Most students don't consider filing for Tennessee bankruptcy because student loans cannot typically be discharged unless they can be proven to provide an undue hardship. But bankruptcy can often help the millions of young people who have been pushed into overwhelming credit card debt because of student loans.

Filing for bankruptcy presents the ability to eliminate unsecured debts - i.e. credit card debt, medical bills, and other non-college-related burdens not secured by assets.

If you're regularly maxing out credit cards and making late payments, getting back in control of your debt can help you begin rebuilding your credit score so you can qualify for loans in the future.

College is supposed to increase our chances, not limit them. By conquering debt, you can finally transition into the real world, leaving college - and its impossible costs - far behind.

Continue reading "As State Cuts University Budgets, College Students Take Out Bigger Student Loans in Tennessee" »

Sometimes we're our own worst enemy.

Case in point: While many Tennessee consumers are in a position to find financial relief through bankruptcy, most are too afraid to file because of unfounded fears.

According to Bankrate.com, many Americans believe filing for bankruptcy will mean losing all their assets, becoming ineligible for a credit card, and dealing with numerous other difficulties.

The article goes on to point out that most of our concerns are, in fact, untrue.

In reality, a Tennessee bankruptcy may be the most effective way for people to manage debt when other options, such as reducing expenses or negotiating a loan modification, just aren't a possibility. While bankruptcy may not be right for every situation, it can be a godsend for those who qualify.

Tennessee bankruptcy attorneys have worked with many clients who avoided filing until there was no other solution, leaving them with a rock-bottom credit score and foreclosed home. The sooner you file for bankruptcy, the sooner you can protect your house from the bank, begin repairing credit, and get back in control of your bills.

We often forget that bankruptcy was created for one reason: to help consumers. Here are Bankrate.com's top bankruptcy myths - and why they're simply not true.

Your credit will be forever tarnished

It's true that bankruptcy will remain on your credit report for up to 10 years. This concept frightens people. But considering most consumers who file have been missing payments and routinely approaching or exceeding their credit limit for years, bankruptcy probably isn't going to make that much of a difference. What bankruptcy can do, however, is allow you to make the necessary changes to start improving your credit. In fact, many bankruptcy clients receive credit card offers shortly after filing.

You'll lose your stuff

While Chapter 13 bankruptcy protects assets, Chapter 7 bankruptcy allows some items to be liquidated. This leads many people to assume they will automatically lose their personal possessions by filing for Chapter 7. In most cases, homes, cars, retirement funds, and many other items are protected by a list of exemptions determined by each state. In addition, any item that you continue making payments on will remain yours to keep.

Your filing will become public knowledge

Maybe one of the biggest deterrents for most potential bankruptcy filers is pride. They worry that somehow neighbors, co-workers, and acquaintances will find out and view them as a financial failure. While bankruptcy is a public legal proceeding, it's not like your name will be read out on the steps of the courthouse. Unless you're a famous celebrity, no one is going to find out you filed for bankruptcy. In fact, by nipping your financial problems in the bud before they cause long-lasting damage - such as the loss of your home to foreclosure - you're in a better position to privately solve your problems and move on before anyone notices.

Bankruptcy is simpler and more effective than most Americans realize. Ultimately it's your choice whether to file. By educating yourself about Tennessee bankruptcy, you'll have the information needed to make the right decision.

Continue reading "Common Misconceptions Prevent Consumers from Finding Relief with Tennessee Bankruptcy" »

More Tennessee residents are taking out personal loans to pay down debt - but while some borrowers are finding relief, others end up exacerbating their debt problem.

After falling out of favor during the recession, personal loans are once again being handed out by lenders for everything from kitchen remodels to debt consolidation, reports The Wall Street Journal.

With tighter lending standards and low real estate prices ruling out the possibility of a home equity loan for many homeowners, lenders see personal loans as a way to grow their business. Banks mailed out 424.8 million offers for personal loans in 2011, compared to just 290.5 million in 2010.

Personal loans don't come cheap, but they can be more affordable than credit cards. A typical interest rate for a borrower with good credit is between 9 and 15 percent for a five-year personal loan, whereas interest rates on credit cards are often more than 20 percent.

Some banks are sweetening the deal further by issuing "debt consolidation specials" with rates as low as 6.5 percent if customers agree to allow their payments to be directly deducted from their accounts.

For consumers committed to paying off debt, a personal loan may provide a solution. But Tennessee bankruptcy lawyers have also seen debt consolidation loans make a bad situation worse.

Many Americans have relied on credit cards to make ends meet during the recession. When our paychecks didn't cover car repairs, doctor's bills, or phone bills, we paid for them with plastic.

Unfortunately, leaning on the crutch of credit can be a hard habit to break. This is where Tennessee bankruptcy comes in handy.

People who take out debt consolidation loans or transfer credit card debt to a card with a lower rate often continue racking up debt. As debt continues to grow, the lower interest rate offers little relief.

Sadly, many people with personal loans find themselves burdened with new credit card debt on top of loan payments.

Consolidating debt is just another term for moving debt around. If debt is running your life, rearranging it isn't enough - you need to eliminate debt. Filing for bankruptcy in Tennessee provides the power to do just that.

Continue reading "Debt Consolidation Loans Make a Comeback, but Tennessee Bankruptcy May Offer Smarter Solution" »

With debt, as with so many other struggles, the first step to finding a solution is identifying what is causing the problem.

Tennessee bankruptcy attorneys often observe that - despite the different homes, jobs, and lives of the millions of Americans currently balancing large debt burdens - the root reasons for debt come down to just a handful of scenarios.

Bankrate.com recently highlighted the top causes of debt - some within our control, some not.

Money Management

Often debt accumulates as a result of consumer behaviors.

It should come as no surprise that many of us grow up with some degree of financial illiteracy. Schools today don't teach money management. Most of us were raised watching our parents pull out a credit card to make purchases. By the time we're in college, creditors are lining up to give us our first taste of plastic. The result is a lost generation of wayward spenders.

It all comes down to simple math: spend more than you earn, and you end up with debt.

Perhaps you spend more than usual during your holiday shopping spree but fail to save more than usual the next month. Maybe you don't have a budget, so you end up spending more some months than others, without ever recognizing the pattern. Maybe you don't have a savings plan, and surprise expenses force you to reach for the credit card.

Whatever the reason, debt ends up filling in the gap.

Organizing your financial information and creating a monthly spending plan is the best way to get expenses in line with earnings. It may not help you cover the bills, but at least you'll know where you stand.

Limited Income

More than ever, people are accumulating debt because of reduced pay or unemployment. When hours are cut or a job is eliminated, consumers feel they have no choice but to turn to credit to make ends meet.

The problem is that many workers who have recently become underemployed don't reduce spending because they view their situation as temporary. When a few weeks with a smaller paycheck turns into a few months, credit card debt snowballs. Throw payday loans with ultra-high interest rates into the mix, and you can really end up in a pickle.

Having an emergency savings to fall back on can prevent a short income loss from becoming a long-term burden. Unfortunately, few Americans have enough savings to make it longer than a month without pay.

When income is limited and debt is high, Tennessee bankruptcy can help people keep their heads above water. Unlike Chapter 13 - which requires a payment plan - Chapter 7 bankruptcy can eliminate debt for people with little income. Tennessee bankruptcy lawyers have seen many clients have their unsecured debt wiped out entirely.

Unexpected Expenses

Even a steady job can't protect us from surprise expenses. The reality is that people get divorced, sued, and sick or injured every day. The resulting legal and medical bills can easily total tens of thousands of dollars and bury consumers under a burden of debt for years.

But while it may not be feasible to prevent these expenses, we can control how we deal with them.

If possible, negotiating an affordable payment plan is a better solution than putting it all on a credit card. However, if a payment plan isn't an option, you need a plan for paying down that credit card balance. Making minimum payments and ignoring the bulk of debt is only going to make the problem worse.

Bankruptcy was developed specifically for helping consumers pay down unsecured debt caused by credit cards, medical bills, and legal fees. Filing for bankruptcy in Tennessee has the ability to eliminate debt at any point - but the sooner you file, the sooner you can lower bills and start keeping your hard-earned dollars for yourself.

Continue reading "Common Causes of Credit Card Debt in Tennessee " »

After a few years of cutting costs and trimming budgets, it appears that Tennessee consumers are once again slipping back into debt.

The average Tennessee resident now owes $24,043 in credit cards, personal loans, and auto loans - a $500 increase over last year, according to credit reporting agency Experian. Residents in Middle Tennessee areas including Nashville have a slightly higher average debt load of $24,152.

Higher levels of debt can mean one of two things: Either consumers are feeling more confident in their ability to spend, or they're falling back into the bad habit of spending more than they're earning.

Some financial experts fear it's the latter.

Those who have struggled to stay afloat since the recession arrived may finally be falling behind. With costs rising and wages falling, people who were formerly living paycheck-to-paycheck are falling back on credit cards.

According to The Tennessean, U.S. wages rose just 0.9 percent in 2011, while inflation increased by 3.2 percent. Savings dropped from 5.3 percent in 2010 to 4.4 percent in 2011.

But despite the recent return to debt, the average Tennessee consumer still managed to reduce personal debt by $2,000 between 2007 and 2010. That's compared to just an $800 reduction by consumers nationwide.

A portion of the debt decrease may be due to bankruptcy filings. Tennessee had the country's third-highest personal bankruptcy rate last year, according to the article.

Unlike credit counseling and debt consolidation, bankruptcy is the only debt-fighting tool legally created with the consumer in mind. Filing for bankruptcy in Tennessee has the power to substantially reduce or eliminate debt, stop wage garnishments, and halt harassment from debt collection companies.

Of course, some of the state's lowered debt levels can be attributed to consumers prioritizing their credit card payments over mortgage payments - a practice that can eventually result in foreclose.

Homeowners who qualify for Chapter 13 bankruptcy can kill two birds with one stone. Chapter 13 legally stops foreclosure while setting up a payment plan to help consumers lower debt. After the mandatory 3-5 years, any remaining debt is discharged free and clear.

The bad news is that the economy may continue to get worse before it gets better. The good news is that Tennessee bankruptcy can allow consumers to do something about it.

Continue reading "As More Consumers Slip Back Into Debt, Tennessee Bankruptcy Offers a Solution" »

Think the top cause of divorces and breakups is infidelity? Think again.
It turns out that financial unfaithfulness is one of the leading reasons for relationship problems.

Yet more than 80 percent of married people copped to hiding financial information from a spouse - be it a credit card balance, a purchase, or a separate bank account, according to a survey by CESI Debt Solutions. In a poll by the National Endowment for Financial Education, 16 percent of those who lied about finances said their money problems resulted in divorce.

Perhaps the best Valentine's Day gift for your significant other is not spending money on that box of chocolates.

Even better, perhaps you can take the time to sit down and talk about solutions to your debt - such as filing for bankruptcy in Tennessee. It's not the most romantic conversation, but it just might save your marriage.

While any amount of financial difficulty can put a strain on a relationship, it's hidden debt - for instance, when one spouse makes secret purchases or maintains a separate credit card - that takes the biggest toll.

Time and time again, Tennessee bankruptcy lawyers have seen couples become buried under a sea of debt because one partner kept secrets instead of seeking help.

As time goes on, the secret-keeping partner's financial troubles may snowball as they attempt to manage finances alone. Bearing the burden can leave them feeling overwhelmed, depressed, and lonely. Meanwhile, the spouse being lied to often knows something is up - and when the secret is out, they are likely to be resentful, angry, and suspicious of their partner's activities.

In worst case scenarios, people have opened credit card accounts in their spouse's name. However, just being married can make you liable for your partner's debt in most states, whether or not your name is affixed to their bills.

While there's no easy solution to existing debt, talking about the problem is the only way to make progress. Living in denial is no way to spend a marriage.

Even if one person handles the finances, both partners have the right to know how the couple's money is being spent and saved. Two heads are better than one, and handling a stressful financial situation together - as opposed to separately - can provide the combination of brainpower and moral support needed to get through a difficult time.

When lowering debt requires much more than simply rearranging a budget, Tennessee bankruptcy may be a solution.

In the meantime, here's some advice from CNN Money on preventing and dealing with problems money in a relationship.

Get Your Priorities Straight

Engaged? Make time to discuss your current financial situations and future financial goals as a couple before you walk down the aisle. Marriage complicates financial matters. While it's definitely possible to overcome debt together, most people never overcome financial incompatibility. This is the time to make sure you are on the same page about financial priorities, as your money moves as individuals will affect you both once you're legally married.

Look for Financial Red Flags

Debt has a tendency to keep growing. The sooner you both acknowledge a problem forming, the sooner you can figure out how to solve it. Have you noticed your partner relying on credit lately? Are new bills showing up, some for purchases you didn't know about? Are there shopping bags in the closet? Does your spouse get irritable when you ask questions about your finances? You may need to stage a financial intervention. While many people hide their financial problems because they're scared or ashamed, bankruptcy can often eliminate debts in the toughest of situations.

Hold Family Money Meetings

Prevention is the best medicine. If you make a point from the beginning of your marriage to go over your finances together once every month, quarter, or whatever timeline works for you, an incentive for honesty is created. It's fine if one partner handles financial tasks, but both should be aware of how the money is being spent. One way to start is by getting copies of your free annual credit report.

Continue reading "Hidden Credit Card Debt Strains Tennessee Marriages" »

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.

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