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Knoxville Bankruptcy Law Blog

Debt relief: Financial struggles could alter retirement plans

High amounts of debt could pose a significant threat to the financial futures of many individuals in Tennessee regardless of their age. However, those who are entering retirement may face additional concerns when dealing with overwhelming financial hardships. To prevent similar struggles from posing a threat to one's financial security, a person could consider seeking guidance on how to address monetary concerns and pursue debt relief.

Upon entering the golden years of life, some individuals may have fewer options when it comes to earning additional income, and many live on a fixed budget during this period. Unfortunately, with high interest rates on credit cards and the extensive costs associated with medical care, many of those who are entering retirement are doing so while burdened with debt. With their financial futures on the line, a similar situation could cause some to consider using retirement saving to pay down on debts, but a similar decision might not be advisable.

How a Chapter 7 bankruptcy works in Tennessee

People often feel apprehensive about considering filing for bankruptcy. However, while other alternatives can sometimes help, in some cases bankruptcy does present the best option for dealing with debt.

This general outline provides an introduction to the workings of a Chapter 7 filing. 

What many would give to be free of credit card debt

As credit card balances are continually on the rise, many families in Tennessee and elsewhere have begun to experience the challenges of dealing with debt. Credit card debt can place a substantial financial weight on a person and leave him or her scrambling to come up with ways to address monetary concerns. However, knowing how best to approach similar debts can be difficult, and the decisions one makes during this period could have consequences.

Recent studies suggested that nearly 70 percent of those surveyed about credit card debt admitted to being uncertain how they will manage to pay off their balances. Some even advised they would go to great lengths and give up something they cherish to pay off their credit cards. Just under 10 percent even stated they may never be able to fully pay off credit card balances.

Forming a plan to pursue debt relief in Tennessee

For individuals in Tennessee and elsewhere who are just starting out in life, few things can pose as significant a threat on their future as dealing with the burdens of debt. Those who experience extended periods of financial strain may wish to protect their futures, but they might be uncertain where to turn for guidance. Individuals who wish to pursue debt relief could benefit from speaking with a bankruptcy attorney for guidance in forming a strategy to regain control over their finances.

High amounts of debt can place a heavy burden on a person, and similar issues may only continue to grow deeper if left unattended. When addressing monetary concerns, experts suggest that the first step to take is to identify all sources of debt and form a strategy to address debts. While working toward one's financial goals, experts also suggest that a person should set guidelines to help him or her avoid deviating from the path, as taking on more debt during this period could prove detrimental.

Credit card debt: Awareness of interest rates could be key

Many individuals in Tennessee and elsewhere may feel that paying the minimum due on credit accounts is enough to stave off financial troubles. However, with the average interest rates coming in at just under 17 percent, a similar decision could leave a person paying down credit card debt for extended periods. Recent studies even suggest that many are unaware of how much they pay in interest and how their rates affect account balances.

During a recent study, less than 40 percent of those surveyed said they were aware of the interest rates on their credit cards. While these rates are subject to change at times, being completely unaware of the interest on accounts could prove devastating. Those who carry constant balances on similar accounts could end up paying a significant amount each year in interest alone.

Mixing medical and credit card debt is never advisable

Many individuals in Tennessee and elsewhere have experienced an unexpected medical emergency at some point in life. With the high costs of treatment, a similar event can be financially draining and can leave a person in search of relief through a variety of outlets. Some may even feel that paying the bill with a credit card is a viable option, but mixing medical and credit card debt can be a disastrous combination.

While placing a hospital bill on a credit card may appear convenient at the time, with high interest rates on many credit card accounts, a similar decision could end up causing deeper concerns in the future. There may also be other options for those who can't afford to pay for treatment. Some patients may be eligible for financial assistance, or they might even be able to negotiate payments with lesser interest rates with the medical provider.

3 red flags you are heading toward a credit card debt crisis

Your credit card comes in handy when you need or want to make a big purchase. It is an easy tool to use, which means you may lose track of your spending. You may have an idea that you have a debt problem, but you may not know–or want to admit–the severity of the issue. 

It is important to come to grips with financial troubles so you can resolve them before they get worse. Here are some red flags you are heading toward a debt crisis. 

Forming a strategy to pursue debt relief in Tennessee

Overwhelming amounts of debt can place a significant amount of stress on a person. Individuals in Tennessee who experience the trials of dealing with debt may suffer through a variety of hardships, each of which can have an impact on their quality of life. When facing extensive monetary burdens, many individuals might benefit from exploring the available options to help them pursue debt relief and regain control over their finances.

For those who wish to cut down on debts, experts suggest that it could be beneficial to change the way they view monetary obligations. This can include anything from cutting down on unnecessary expenses to forming a budget to reduce spending. When changing one's mindset, it may also be helpful to come up with an idea of what a person wants from the future and work toward achieving that goal.

Pursuing debt relief by cutting expenses and forming a budget

Going through extended periods of financial strain can be a stressful experience, and such a process could have a substantial impact on a person's future. Upon encountering similar concerns, many individuals in Tennessee may have sought to combat their issues by forming a strict budget. While a budget could prove instrumental to pursuing debt relief, knowing where to make cuts can be challenging at times.

While there could be a multitude of areas that one could consider reducing expenses, some may prove more productive than others. Since the costs of dining out can add up quickly, one area that a person could consider making cuts may pertain to packing a lunch each day. One could also consider reducing his or her time spent on social media, as these outlets might expose one to a variety of advertisements, some of which may prove enticing.

Debt relief: Addressing financial concerns early in life

Dealing with debt can be a stressful and taxing experience at any stage of life. However, for individuals in Tennessee who are just starting out, similar hardships could leave them uncertain about the future. To protect one's financial future, a person may find it advisable to gain an understanding of the potential consequences of certain decisions and how to know when it is time to pursue guidance on the available options for debt relief.

Whether for assistance in building their credit score, or due to a lack of savings, many individuals have turned to credit cards to fund financial endeavors. Prior to making a similar decision, it may be advisable to understand how to use similar accounts responsibly, as credit card debt remains a concern for many. By knowing the potential risks associated with use of a credit card, and understanding the importance of keeping track of one's credit score, a person may be much better prepared to make informed decisions regarding his or her finances.

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