Tennessee Bankruptcy Lawyers Blog

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" »

When it's a challenge for the most seasoned business professionals to land a well-paying job, you can only imagine how difficult it is for today's recent college graduates.

Gone are the days when a four-year education equaled job security. More than a shiny new degree or passion for one's particular field, employers are looking for solid work experience.

Tennessee bankruptcy lawyers have seen an increasing number of well-educated young people struggling in today's economy. Foreclosures are on the rise in Tennessee neighborhoods, and so is unemployment. As a result, many recent college grads quickly end up over their heads with debt.

In many cases, considering bankruptcy in Tennessee may be a smart idea.
That said, bankruptcy doesn't work for everyone. That's why consulting with an experienced bankruptcy lawyer should be your first move if you're experiencing debt trouble.

Bankruptcy's effectiveness depends on factors that include income level, types of debt, amount of current and expected debt, and your personal situation. A bankruptcy lawyer can evaluate this information to determine your best course of action.

Perhaps the most appealing aspect of bankruptcy is that it was designed to help the consumer. Nonprofit credit card counseling programs may offer some guidance, but they do nothing to legally lower debt. For-profit programs often make the problem worse by requiring substantial fees.

Debt settlement companies also cost money and may make your credit worse by recommending that you stop paying your debts. The truth is, getting a lender to sit down with you and negotiate a repayment plan is not likely to happen.

Student loans are a difficult debt burden to unload. In fact, the only way to discharge student debts is to prove you have an "undue burden" or are otherwise physically unable to work due to injury or illness. But that's not how bankruptcy works.

What bankruptcy can do is relieve pressure from unsecured debts - i.e., your credit card balance, medical bills, and other types of loans. Many young Tennessee bankruptcy attorney clients have high unsecured debt because student loans and car payments have left them with little cash leftover to pay other bills. Filing for bankruptcy can free up money for your loan payments, making the rest of your bills more affordable.

If you're unemployed or underemployed, an underutilized two-year-old federal provision known as the Income-Based Repayment program may also help, according to the Associated Press.

Aimed at grads with little or no income that are stuck paying off federal loans, the program lets enrollees pay back debt over either 10 or 25 years if they take a public service job. Eligibility can be determined with a debt vs. income calculator on the Department of Education's website.

There are some cons, however. If your student loans came from a bank, not the Fed, you're out of luck. Also, it's possible that repayment plans can be recalculated based on your annual tax returns - perhaps resulting in higher payments. Selecting the 25-year repayment option will also result in higher interest rates, though remaining debt will eventually be discharged.

Continue reading "Recent Grads Considering Tennessee Bankruptcy Amid High Unemployment and Poor Economy " »

This fall, thousands of young people set up camp in cities nationwide to protest economic and social injustice. While the Occupy movement has since faded due to increased police presence, angry city officials, and dropping temperatures, the questions it raised remain unanswered.

The young Americans who carried signs, shouted slogans, slept on lawns and benches, and sought change have one thing in common. They're frustrated by their limited opportunities for success.

In essence, the Occupy movement is about finances.

Today's bright young college graduates are entering the real world swimming in student debt - sometimes hundreds of thousands of dollars worth - and walking into a job market that simply doesn't need them.

They can't find work, they can't find an affordable place to live, they can't keep up with their mounting credit card debt - they can't find the footing they need to get their life started. But bankruptcy in Tennessee may offer a solution.

Tennessee bankruptcy lawyers have helped numerous clients find a fresh start. When bills are high and income is low, waiting for an opportunity to find you isn't an option. You need to make something happen. Bankruptcy is a way to take action.

From the moment consumers file for bankruptcy, creditors are prevented from making harassing phone calls - and from contacting debtors altogether. For those with an income level that qualifies for Chapter 7 bankruptcy, debts are wiped out completely. While giving up assets is sometimes required, many filers are eligible for exceptions and exemptions.

Sometimes eliminating the burden of debt, interest, and late fees is enough to help folks get their lives on track. Here's some additional advice that may be useful to young people looking for financial solutions, from a recent column in Kiplinger:

Look Before You Leap

Every year thousands of recent grads head to major metropolitan cities like New York and Los Angeles in hopes of hitting the big time. But before you make a life-changing move, do your homework. Not all cities today have the same employment rates, rent prices, or quality of life. Instead of looking for glamour, look for real job opportunities and a low cost of living. This summer Forbes.com looked at the best cities for young professionals. Des Moines, Iowa boasts a 5.8 percent unemployment rate, while jobs in Raleigh, North Carolina are expected to grow by at least 2 percent annually.

Lower Student Loans

You shouldn't have to spend the rest of your life paying off your education - that's not the point! If a scholarship is out of the question, alternatives like gradual payments or repayment plans based on your income level can make college more affordable. If you're looking at college choices, it may be worthwhile to choose an in-state school to avoid outrageous out-of-state tuition. Taking the bulk of your general education classes at a community college or public university can lower costs significantly, leaving the option open to transfer to a private school for your major-specific courses.

Find Affordable Health Insurance

Even young people need health care. Health insurance helps guarantee you won't be stuck with enormous debt if you need to see a doctor, purchase a prescription, or spend a night in the ER. Again, you may be able to save money on health insurance premiums if you live in a more affordable city. Those with certain pre-existing conditions or at an elevated medical risk can stay on their parents' insurance until age 26.

Continue reading "Young Tennessee Residents in Need of Financial Help May Benefit from Bankruptcy in 2012" »

Being young doesn't always mean being carefree - especially in today's economic climate.

With college tuition fees and the cost-of-living rising steadily, young adults today are suffering from more financial pressure than they have in generations. Couple these costs with the fact that most recent college grads are faced with a sluggish and brutally competitive job market, and you get a battle that feels like it just can't be won.

As a result, say Tennessee bankruptcy lawyers, many people in their 20s are starting out their adult lives with the burden of debt.

Credit card companies routinely push their products on college students who can't afford them. Meanwhile, young folks can't really rely on their parents for guidance and advice because adults of all ages are suffering from the same problem: spending more than we earn with the help of credit cards, then getting stuck with growing debt thanks to high interest rates and hidden fees.

Yet there's a solution that many young people overlook: filing for bankruptcy. Young adults often have a negative perception of bankruptcy because it seems extreme - and they may have heard it can't eliminate college loan debt. While it's true that bankruptcy can't make your school loans disappear, it does have the power to wipe out unsecured debt like your credit card balance.

For most young people, credit card debt is a problem that only gets bigger. Without a well-paying job, you may only be able to make minimum payments. Without years of responsible credit experience to your name, you may only qualify for high interest rates. The combination of low payments and high rates leads to a balance that grows out of control. Before long, you've got debt collection companies calling and wages being garnished from your already-too-small paycheck.

By filing for bankruptcy in Tennessee, many clients are finally able to pay more than the minimum payment on credit cards, make on-time payments, and get a handle on debt. With the financial burden lifted from your shoulders, you can start worrying about what really matters: finding that well-paying job and moving on with your life.

Never has there been such a significant gap between the earnings of the young and old, according to a recent story on MSNBC.com. Adults over 65 enjoyed a median net worth of just under $180,000 in 2009 - an increase of 42% since 1984. Meanwhile, people under the age of 35 had a net worth of $3,662. That's a decrease of 68%.

Part of the discrepancy is due to home ownership. Since the majority of older adults purchased a home before 1986, the gains received during the real estate boom in the 1990s offset many of the losses we've seen since. Young adults, on the other hand, either purchased at the peak of the market - leaving many struggling with high payments and little equity or, worse, a credit-wrecking foreclosure - or have yet to buy a home.

While all ages are suffering from the poor job market, older adults are more likely to have an established career and reputation.

Life isn't always fair when it comes to finances. But if unmanageable debt is holding you back, you don't have to put up with it. Tennessee bankruptcy is one tool that can help you make a change.

Continue reading "More Young Adults Struggle with Debt in Tennessee Compared to Older Consumers" »