Tennessee Bankruptcy Lawyers Blog

As many as 8 million children in the U.S. may be directly affected by foreclosure, according to startling new data reported in USA Today.

Since the foreclosure fiasco began in 2007, an estimated 2.3 million kids have lost their homes to a bank. An additional 3 million children face the same fate because their parents are either already in the foreclosure process or are at risk of foreclosure due to missed payments.

As our Tennessee Bankruptcy Lawyers Blog reported earlier this month, a new flood of foreclosures is expected to wash over the market later this year.

While moving is never easy on kids, foreclosure in particular can have devastating effects because it impacts kids physically, mentally, and emotionally.

As data by the advocacy group First Focus illustrates, children who change schools as a result of a move can see their reading and math scores fall by as much as if they had missed a full month of classes. Kids who move frequently are also 50 percent more likely to drop out of school before graduating.

Because foreclosure is typically the result of serious financial distress, many children of families facing foreclosure suffer health problems since parents are often without health insurance.

Foreclosure frequently leads to depression, anxiety, and relationship trouble in parents, which in turn impacts children.

Children do best in stable environment where they have a sense of security. Losing the roof over their head - and seeing their parents stressed out from the process - challenges all that.

These days, it's impossible to guarantee a stable financial environment. But parents who can manage to hold onto their home might be better able to help insulate their children from economic problems. Filing for Tennessee bankruptcy may make it possible.

Chapter 13 bankruptcy protection has the power to halt foreclosure proceedings and debt collection, giving families time to reorganize debts into a realistic repayment plan. Debt remaining at the end of a 3-5 year repayment period can often be discharged completely.

If foreclosure or other financial issues are threatening the health and happiness of your family, a Tennessee bankruptcy lawyer can help determine if filing can offer much-needed relief.

Continue reading "Children of Homeowners May Suffer Most in Tennessee Foreclosures" »

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" »

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" »

For many of us, family comes first. But what happens when helping out your relatives puts you in a financial pickle yourself?

Society often looks at debt as a self-inflicted problem, but many times it's the result of trying to do a good deed, whether it's taking care of parents or grandparents or co-signing a loan for a cousin who's fallen on hard times.

Problem is, when we experience financial difficulty ourselves - say, due to a lost job or medical expense - there's no money left in the bank. As a result, we turn to credit cards and wind up with our own debt burden.

If you're experiencing problems with family and money, Tennessee bankruptcy attorneys may be able to help. Depending on your financial situation, you might benefit from filing for either Chapter 7 or Chapter 13 bankruptcy.

The bankruptcy you file for depends largely on income level. Chapter 7, which has the ability to discharge debt, is mostly reserved for folks earning little to no income. If you've recently lost a job, amassed large medical debts due to injury or illness, or are a single parent struggling to make ends meet, you may qualify for a Chapter 7 bankruptcy in Tennessee.

But what if you have a decent job, but family-incurred debt is making it impossible to pay the mortgage and other bills? Chapter 13 bankruptcy might not historically be as popular as Chapter 7, but it's becoming more widely used thanks to its ability to stop foreclosure. With Chapter 13, you'll need to commit to a debt repayment plan over a period of 3-5 years. In the process, though, assets like your home and vehicles will be legally protected.

Family and money sometimes don't mix, as a recent Wall Street Journal article illustrates. If a relative dies unexpectedly, those closest to them - like spouse and kids - become responsible for their financial burden. When they can't handle it alone, other relatives often jump in to help, from parents to aunts and uncles.

In one case, a man was looking forward to retirement when his son-in-law suddenly died of an aneurism, leaving his wife - the man's daughter - responsible for the hundreds of thousands of dollars he'd borrowed for a business start-up. The son-in-law didn't have insurance, and the couple had three young kids. There went the man's peaceful retirement.

In the article, a financial planner urges people to consider what would happen if family members were to die unexpectedly. Would it leave you with their debts? Would you be responsible for the loan you co-signed?

There's nothing wrong with wanted to take care of your own. But you may want to think about encouraging relatives to get life insurance, or purchasing long-term-care insurance for your elderly family members.

Continue reading " Helping Family with Financial Burdens Leads Some to Seek Tennessee Bankruptcy" »