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Middle Tennessee Bankruptcy Blog

Which chapter is right for you?

When it comes to trying to overcome financial obstacles, there's no one right or wrong way to do so. Your situation may be vastly different from your nearest Tennessee neighbor's. On the other hand, you may have several issues in common yet determine that your most viable options to resolve your problems are not the same. Whatever events led to your financial crisis to begin with, there's likely a light at the end of the tunnel of which you might not be aware.

One might call that light bankruptcy. If you grew up having a knee-jerk reaction to that word due to the negative stigma attached, you are definitely not alone. However, once you understand the different types of debt relief, you may come to realize that not only is it not necessarily a bad thing, it may, in fact, be quite beneficial in some ways.

Common obstacles of personal debt

Millions of Americans live with personal debt of some kind, and regardless of whether that debt is due to student loans, medical bills or other expenses, it can become crippling. Tennesseeans are not exempt from this problem, as countless residents struggle to make ends meet due to accumulation of debt. While personal financial matters are usually complex, has the issue trickled into other aspects of life?

For many, maintaining a driver's license has become a new problem all on its own. Last month, Slate magazine focused on an angle of personal debt that might otherwise be overlooked: that of the suspension of drivers' licenses. Although arguably part of a deeper problem involving power imbalances among states and institutions, the issue of revoking drivers' licenses stems largely from poverty. In many cases, Slate points out that tickets only spark a vicious cycle of debt, where drivers first face overwhelming fees for driving without insurance. There are slim chances that these drivers can afford their first ticket, but most states are hardly empathetic; some drivers fail to appear in court as a result of personal debt, which only prolongs the issue. Revealing the counterproductive aspects of license suspension, Slate adds that millions of drivers are left without a legal way to get to work or take their children to school -- a cycle of debt that has no end aside from reform. In Tennessee, lawmakers are challenging a 2012 law that enforces debt-driven suspensions.

Student loan debt: is there a solution?

By now, most Americans are aware of the issue of student loan debt. This nationwide problem is often masked by the appeal of college and the opportunities promised upon earning a degree. Although the advantages of acquiring higher-level education are evident, more graduates experience stress due to loan debt than ever before. Many Tennesseeans wonder about the outlook of this situation, and if relief from student loans is possible in the near future.

The Times Free Press is one of many news outlets reporting on the widespread issue of crippling debt caused by student loans. According to a study, the Times revealed in 2013 that Tennessee was one of the most successful states when it came to managing student debt. But that success has a darker side: an overwhelming number of graduates still struggle financially as a result of debt. As of 2011, Tennessee students graduated with the sixth-lowest debt in the country, and some areas in the state saw even lower amounts of debt. Many credit their post-graduate economic health to the Hope Scholarship.

Filing Chapter 13 bankruptcy in nashville

Personal bankruptcy in Nashville is an inevitably delicate topic: from deciding on the right financial plans to discovering which assets one may keep, the entire process can become long and complex. Many Tennesseeans wonder which type of bankruptcy is the most appropriate to file, and for those with large assets, this process can present a number of challenges.

For various reasons, many financial experts encourage those in economic distress to file for Chapter 13 bankruptcy. Yet each case can present different plan needs, as The Balance reveals that many Chapter 13 bankruptcies are often intertwined with a plethora of questions and rocky emotions. Concerns such as maintaining possession of a house, car and other assets can clearly leave most in such distress, but The Balance adds that it is this very stress that can negatively impact a bankruptcy case. Some individuals wait great lengths before taking bankruptcy action, and others simply do not have the adequate funds for Chapter 13 to begin with. Yet procrastination is not the only factor in many Chapter 13 bankruptcies; according to The Balance, many individuals also experience a disruption in income, leading to issues down the road. 

Crowdfunding may not meet medical debt needs

Facing an unexpected medical emergency can leave you feeling physically unwell. Additionally, you may also have the added worry of how you could potentially pay for the medical treatment that the health condition may require. Often, many Tennessee residents do not have the personal funds or medical insurance coverage to meet all of their financial needs during this time.

In many instances, the idea of accumulating considerable medical debt can lead individuals to avoiding seeking treatment. This type of action may prove detrimental as a person's, condition may only worsen over time. As the age of technology continues to connect people across the globe, more and more people turn toward crowdfunding as a means to pay for needed medical treatment.

How do I move forward after a Chapter 13?

If you are one of the many people in Tennessee who is considering filing for bankruptcy, you may be concerned about the impact this may have on your credit and your future. Your concerns are valid and it is important for you to understand the long-term implications of bankruptcy. Chapter 13 bankruptcy can give you a fresh start but you have to be careful and take the right steps to take full advantage of this.

As explained by Bankrate, you may need to wait for a while after your bankruptcy before trying to get new credit. However, after a period of time getting new credit is exactly what you need to do. You may want to start with a secured credit card and getting one new piece of credit at a time is recommended. Obtaining or seeking too much credit at once may raise a flag to lenders.

Struggling with medical debt? Your credit score may not suffer

You may be monitoring your credit report, or maybe you just can't bear to look. Keeping an eye on your credit score is a good way to measure how well you are managing your debt. If your score is climbing, you are likely on track. However, if your score is falling or can't break out of the range of unacceptable, you may be frustrated, especially if your score has dropped because of medical debt.

The Consumer Financial Protection Bureau reports that about 20 percent of the credit reports maintained by Equifax, Experian and TransUnion contain delinquent medical bills. If you are one of those 43 million people in Tennessee and across the country whose credit report has suffered because of medical debt, it may not help to know that such negative marks may remain on your report for seven years. Fortunately, a recent lawsuit has brought about a change that may impact many who struggle with medical debt.

Missing credit card payments has steep consequences

People who are struggling with debt in Nashville may sometimes feel like they are forced to choose between which outstanding bills to pay each month. Things like housing and food are necessary for survival and will always take precedent over other kinds of debt. However, consumers should be aware that skipping even a single credit card payment can have serious consequences. Therefore, meeting the problem head on will likely lead to better results than ignoring it and hoping that it goes away.

According to CNBC, missing payments for several months in a row will likely result in the account being closed and sent to collections. Contact from collection agencies can be unpleasant and some debtors may find themselves facing a lawsuit.

Tips for negotiating credit card debt

Whether it is for once in a while splurges or for everyday essentials, spending is easy when there is a little piece of plastic in one's wallet. However, paying off those balances is not always easy for everyone in Nashville. When the payments become overwhelming, many people do not know what to do. However, one simple solution that is easily overlooked is to simply call the credit card company and ask for help.

According to WSMV Nashville, people who take this step are usually met with success. If a financial setback is only temporary, a raise in credit limit may be helpful. Studies show that people who ask are successful in getting their limit raised 90 percent of the time. In addition, 87 percent of requests to have a fee waived are approved. Another remedy that people might seek from their credit card company is a lower interest rate.

Is gender important when it comes to debt?

If you are struggling with overwhelming debt in Nashville, whether you are a man or woman may not really matter when you look at the big picture. However, there may be some fundamental differences in the way that each gender approaches money and debt that can give some insight into the problem and possibly help curb future problems, particuarly if you are in a relationship and share finances with a spouse or partner.

As in other areas of life, men and women often seek different solutions when it comes to financial struggles. According to Bankrate, men are more likely to earn extra money as a means of paying off debt while women are more likely to cut down on unnecessary spending.

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Rothschild & Ausbrooks, PLLC
1222 16th Avenue South, Suite 12
Nashville, TN 37212

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