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Knoxville Bankruptcy Law Blog

Many people may need debt relief due to personal loans

People take on debt for many reasons, but it is often because they feel it is the only solution to their current situation. For example, Tennessee families may end up with a lot of medical debt because of an unexpected emergency. One of the fastest growing categories of debt in the United States is personal loans, which a consumer may take on because it seems like a smart option by which to deal with certain financial needs or debt relief concerns. 

Across the country, personal loan balances now reach approximately $300 million, a number that indicates they are growing at a rate of 11% per year. People often choose to take on this type of debt as a way to consolidate their credit card balances or fund specific things, such as home improvement projects. However, there are some surprising disadvantages to these types of loans. 

Student loan debt and Chapter 7 bankruptcy

When a Tennessee consumer is overwhelmed by his or her financial responsibilities, it can lead to unpleasant consequences, such as wage garnishment and other debt collection efforts. Credit card debt and medical bills can lead to an unmanageable debt burden, as can student loan debt. Many people seek debt relief through Chapter 7 bankruptcy, but one type of debt not dischargeable through this process is student loan debt.

Many people emerge from college or graduate school with a lot of student loan debt. They have the intention of making payments over several years to pay off the balance, but many find that circumstances beyond their control prevent them from doing that. Despite the widespread problem of this type of debt, federal bankruptcy laws prevent people from getting rid of these balances when they file for bankruptcy. 

Many consumers will go into 2020 seeking debt relief

The impact of owing a significant amount of debt can be significant. In addition to the stress that comes with bills are piling up and interest accumulating, many people also face the threat of losing personal property and calls from debt collectors. In fact, many Tennessee residents will start 2020 looking for effective debt relief options. 

Debt is often the most significant financial roadblock consumers are facing. Often, it accumulates because of circumstances beyond a person's control, such as a medical emergency, job loss or other unexpected expense. Debt can be especially crippling for working families who don't earn much more than what they require each month. Some individuals owe so much they have no reasonable hope of ever catching up on their own.

More people facing lawsuits as a result of their medical debt

Medical care is expensive, even for people who have health insurance. When a Tennessee resident goes in for surgery, needs diagnostic testing or has to visit the emergency room, he or she may find bills from the hospital or doctor in the mailbox a few weeks later. These bills can come as a surprise, leaving many people struggling with medical debt they cannot pay. As a result, some hospitals are actually suing these people for payment.

Skyrocketing medical bills have been a problem for many people, and the rising cost of medical care has left even people with insurance and moderate to high incomes with a debt burden they can no longer manage. People often simply cannot pay any or enough of their share of the medical bills to satisfy the hospitals. Consequently, it is becoming more common for hospitals to bring lawsuits when this occurs. 

Accumulating credit card debt during the holiday season

The holidays are fast approaching, which means many in Tennessee are getting ready to spend money on traveling, presents and other expenses that pop up during this time of year. Most people are not prepared to pay cash for all of their holiday purchases, which means that many will rely on credit cards to buy what they want and need. Often, this leads to a significant accumulation of credit card debt in a short amount of time. 

When polled, millennials say that they are prepared to take on a lot of debt during this season. Of all the demographics, this group claims that they accept the accumulation of credit card balances during the holidays as inevitable. Not only are they more tolerant of this idea, they believe it is acceptable to approach their spending during this time of year in this way.

Will you lose your home if you file for bankruptcy?

When your debt spirals out of control, you may begin searching for solutions as to how you can fix it. You may think about filing for bankruptcy as a potential means of getting your affairs back in order. You may, however, have concerns about whether filing for personal bankruptcy will result in you losing the place you call home. Unfortunately, there is no single, all-encompassing answer to this question.

There is some potentially good news, though – filing for bankruptcy does not automatically mean that you need to surrender your home and find a new place to live. Instead, whether you will ultimately have to give up your home depends on several different elements, including the type of bankruptcy proceeding you utilize.

Handling credit card debt through a balance transfer

Few U.S. families are strangers to debt of one form or another. From student debt to mortgages to the most insidious of them all, credit card debt, it seems many Tennessee residents owe money in one form or another, and for some households, that debt is becoming unmanageable. Thankfully, there are a variety of solutions to heavy debt loads that are not necessarily bankruptcy filings. 

One of the most popular ways to handle debt is through the use of a balance transfer. Simply put, a balance transfer is the process of moving an existing balance to a new card, one with low introductory APRs and sometimes even an interest-free grace period. This can allow a consumer to considerably reduce his or her debt, as they are not being charged interest from anywhere between 3 and 21 months. 

Stressed millennials could benefit from debt relief help

Consumers of all ages in Tennessee struggle with debt, but there are some who are carrying a more significant load than others. Millennials are a demographic that has more trouble with debt than other age groups, and for some, the financial burden can be unmanageable. Many of these individuals who are struggling with paying bills and catching up could benefit from seeking debt relief through various options.

When polled, millennials state they are most stressed about their student loan debt and credit card debt. Around one quarter of this generation have mortgages, and over 40% have car payments. Overall, this is a lot of debt, and many feel that they can never catch up, especially if they have already fallen behind. With accumulating interest and regularly incoming bills, even a few missed or late payments can quickly snowball into an unmanageable situation.

Understanding the repayment plan under Chapter 13 bankruptcy

Bankruptcy filing means you concluded that you need help getting rid of some or all of your debt. With credit card accessibility climbing and the average income remaining stagnant, it is not a surprise that consumers find themselves deep in debt.

Under Chapter 13 bankruptcy, you agree to pay back a portion of your debt over three to five years. The payment plan calculation depends on a few factors. Explore some of the details of how a trustee establishes a monthly payment and what happens after.

Extravagant weddings leave many needing debt relief

Engagement is an exciting time for Tennessee couples, but this excitement can cause some to make poor financial decisions. Many people want big, extravagant weddings, but not everyone can afford them. As a result, an engaged couple may buy things, pay for wedding services and pay for honeymoons on credit, leaving them entering their newly married life in debt. Some are quickly looking for ways to find debt relief.

There are some engaged couples that make the choice to take out specific wedding loans so they can afford the wedding of their dreams. Companies that market these types of loans do so by appealing to the desire that many have to have an Instagram-worthy wedding, with lots of expensive extras and experiences for the guests. Sometimes, these loans can be five figures with interest rates that can be as high as 30%.

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