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Taking on debt can easily cause financial problems

Debt is something that is practically unavoidable in life. Even if you do your best to handle your finances well, you may still carry a credit card balance or have loans that you have taken out for certain necessities. It can be difficult to know when you are doing well with your debt and when you might be in over your head, and in some cases, people do not find out until it is too late.

When it comes to debt, it is important to know that there are good debts and bad debts. The good debts are the sort that provide you with a benefit, such as taking out a mortgage loan for a home. Of course, even good debt can become bad debt if you are unable to make your payments.

Creditors hounding you? Immediate relief is available to you

Debt can be overwhelming. From the phone calls at all hours, the letters in the mail and the threat of losing some of your personal property, you may be under an impossible amount of stress. But you do not have to be.

You need to take steps to make the calls and harassment stop, and one of these may include filing for bankruptcy. While there is often a negative perception associated with this step, it can actually offer you immediate relief from collection efforts and debt collectors.

Can bankruptcy increase your quality of life?

Are you among the many people here in Nashville and across the country who believe that filing for bankruptcy could ruin your chances of ever receiving credit again? Do you think your credit rating will never recover?

These are definitely legitimate questions. After all, everyone cautions you not to file for bankruptcy, so there must be a good reason. Fortunately, for you and others who need some relief from overwhelming debt, bankruptcy could actually make your life better.

Deciding between Chapter 7 and Chapter 13

Is debt overwhelming you? Are creditors calling you at all hours and demanding payment? Are you unsure of how you will ever catch back up? If so, you may know that a good option for you is to file for bankruptcy. This is not always an easy decision to make, but it can allow you to seek a better financial future.

After you have made this choice, you will then have to decide which chapter of bankruptcy is best for you. The available choices for consumers are Chapter 7 and Chapter 13. You may find it helpful to learn more about both of these options and determine which one is right for your situation. It will also be important for you to learn about eligibility requirements and how to move forward with the application process.

Plan now to avoid too much debt due to holiday spending

Believe it or not, the holidays are fast approaching. Before you know it, you will have a list of things to buy, parties to attend and holiday baking to do. Part of the holiday season is buying gifts, and for many people, this means overspending. If you are like most people in Tennessee, you will use your credit card for this.

Consumers often use their credit cards for holiday spending, daily needs and even as sort of an emergency fund. Many people carry balances from one month to the next, and in some cases, these balances can quickly grow out of control. Accumulating interest, minimum payments and other circumstances can lead to a precarious financial situation and more credit card debt than a consumer may be able to handle on his or her own.

The means test: What to expect and why it matters

It's not easy to make the choice to file for bankruptcy. If you are considering this step, you are probably in a precarious financial situation, unsure of how you can pay your debts and ever get ahead. Thankfully, bankruptcy can offer you a way out and allow you to pursue a better and stronger financial future.

There is a lot more involved with filing for bankruptcy than just submitting the paperwork. Not everyone who wants to file is eligible, and there are different types of bankruptcy available to consumers. One of the first steps you will have to take is to complete the means test, the results of which will make it clear which is the best way forward. It may help you learn more about what to expect from this test.

What if crowdfunding isn't an option to help save your home?

Perhaps you're one of few Tennessee residents who has never encountered financial challenges in life. Chances are, however, you're more like most people, who have experienced ups and downs in their cash flow and overall economic well-being. Any number of issues might spark a financial crisis, whether moderate to severe. One month, you might simply have trouble paying your bills on time; however, if your finances veer completely off-track, you might wind up missing several mortgage payments.

Such situations often lead to further financial trouble. You might have the best intentions of getting it all straightened out. You might also feel frustrated or worried if that turns out to be easier said than done. If creditors start calling or your lenders threaten you with foreclosure, you know it's time to seriously consider whatever debt relief options might be available. This is when some people resort to crowdfunding.

Zombie debt can wreck your finances

Debt is part of life for most Americans. Your experience with debt may have begun with a credit card in your teens, a student loan for college, then eventually your first car payment. If you have a mortgage, you may never see a time when you do not owe somebody your hard-earned money.

Did you know that debts have an expiration date? It's true that after a certain amount of time passes without a payment, a creditor or debt collector forfeits the right to take legal action against you for the outstanding balance. You may feel some relief when the statute of limitations passes on your debt. However, they don't call it "zombie debt" for no reason.

How can you know if a debt collector is acting illegally?

One of the most frustrating components of owing a significant amount of debt is experiencing contact from creditors and debt collectors. When you have unpaid bills and overdue balances, you may find that you get phone calls and maybe even letters requesting payment. This is normal, but there are times when the actions of debt collectors may step over the line.

No matter how much debt you owe, you have certain rights. The Fair Debt Collection Practices Act protects you from unfair and harassing treatment from creditors and debt collectors hired to secure payment. You will find it beneficial to learn more about what your rights include and whether it's possible that what you are dealing with over the phone and through other types of contact actually qualifies as harassment.

When is bankruptcy the smart choice for you?

When you are up to your arm pits in alligators, it's hard to stay focused on building a bridge. Debt is like that. When facing financial difficulties, seeing a clear, brighter future can seem impossible. 

If you find yourself in a position where you are dealing with substantial debt and bills you cannot pay, you may feel overwhelmed and unsure of what to do next. You may know that some Tennessee consumers find relief in filing for bankruptcy, but how can you know if this is the right choice for you? 

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

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