Rothschild & Ausbrooks Attorneys At Law | Middle Tennessee Bankruptcy Blog
This Bankruptcy blog by Rothschild & Ausbrooks, PLLC offers information and commentary for residents of Nashville, Tennessee. Our mission is to provide personalized and exceptional legal advice with service above expectations to our clients.
When most Tennesseans think of credit card debt, medical bills or holiday shopping might be the first culprits to come to mind. However, one tricky factor at play in the wallets of many is that of minimum payment traps. Some are aware that such methods of paying off debt can be risky, but there are times when a credit trap can seriously affect an individual's wellbeing and overall quality of life.
Known infamously as the quick method of paying monthly credit card bills, minimum payments can be a wolf in sheep's clothing. NerdWallet takes a look at this common method of addressing credit card debt, showing that minimum payments can ultimately prolong debt and could potentially place a black mark on one's credit score. In addition, paying only the minimum balance each month could lead to higher interest rates. Although paying the minimum balance can help consumers avoid late fees, opting for this method on a long-term basis could prevent them from paying down balances. NerdWallet concludes the article by pointing toward further assistance for those who have paid only minimum balances for long periods of time.
National Credit Educational Services also comments on the pros and cons of paying the minimum balance on one's credit card debt, adding that, despite tempting payment plans, saving money for consumers is not typically a credit card company's top priority. As a result, countless Americans fall into a minimum payment trap, wading waist-deep into debt. NCES also encourages consumers to pay as much as possible on monthly fees -- committing to even an additional $20 to $30 a month can make all the difference.
Your financial situation is a mess. You have mountains of unpaid bills and creditors calling, and you have likely lost sleep due to the stress your financial instability has caused. You may feel that you have become the sole survivor of a sinking ship, but you are not alone when it comes to dealing with debt problems. Numerous people across the country face similar circumstances, but while this idea may seem somewhat comforting, it does not necessarily help you deal with your money problems.
A step that could help you address your outstanding debt relates to reviewing your debt relief options. Just as many people struggle with liabilities, a considerable number have also found a lifesaver by understanding the various ways in which they could address their financial issues. In particular, bankruptcy helps numerous people get their finances back on track, but you may wonder whether this action suits your circumstances.
What are your other options?
Because bankruptcy often comes with a negative stigma and because many myths circulate around the process, you may feel hesitant to consider this avenue a viable option. This uncertainty is understandable, and you have a right to explore other potential relief methods. However, alternative methods may not provide the outcomes you need.
Some possible steps you could take to address your debt include:
Negotiation: A first step you may consider involves trying to a negotiate settlements with your creditors. In some cases, you may have the ability to lower your owed balances. However, some creditors may not feel the need to negotiate, and you could remain on the hook for your entire balances.
Credit counseling: If your attempts at negotiation prove unsuccessful, you may try credit counseling. A credit counselor could speak with your creditors on your behalf and work to lower your payments and interest rates. In some instances, you may need to take this step before filing for bankruptcy anyway.
Using savings: Having a savings account can often feel like a safety net in the event that an emergency occurs, and you need money quickly. If you face a substantial amount of debt, you may consider using those funds to address your balances. Of course, even using those funds may not make a big enough dent in your liabilities.
While trying these and other avenues may be worthwhile, they may not help you handle your debt in a significant way.
Has action been taken against you?
It may prove wise to consider bankruptcy more seriously if creditors have already taken actions against you. Wage garnishment and lawsuits can both act as red flags that your debt has gotten out of control. Fortunately, filing for bankruptcy could stop these actions while you get your financial affairs in order.
Along with the plethora of other topics under the current American spotlight, unemployment continues to be a prominent concern. Despite these concerns, recent reports show that job growth in the nation is climbing slowly, but steadily. Tennesseans dealing with the many struggles of debt understand the impact it can make on one's personal life and on a family. Could this slight increase in the country's jobs continue in the coming months?
As of last week, the numbers show little change. Although the Bureau of Labor Statistics shares that jobs increased by 313,000 in regard to nonfarm payroll employment last month, the unemployment rate remained at 4.1 percent. This percentage equates to roughly 6.7 million Americans who are still unemployed. However, industries such as construction, finance, retail trade and manufacturing services have thrived in the last month. While these industries see significant growth, the number of individuals who have been unemployed for an extended period of time stayed at 1.4 million. This number does not include people who are unemployed but not currently seeking work, but the BLS clarifies that there are different surveys that apply to these unemployed Americans.
When growth moves slowly, some workers try to look to the bright side. CNN Money appears to share this sentiment, stating in an article from last November that the U.S. unemployment rate has been at an all-time low. In fact, using the aforementioned data, CNN reveals that unemployment is at its lowest in 17 years. On another note, wages in recent months have increased only minimally. CNN points to Hurricanes Harvey and Irma as having stripped some areas of jobs, only to see employment numbers skyrocket after restaurants and businesses reopened after the disasters. There may be a long way to go with America's job growth, and many still grapple with climbing debt, but the future of employment could continue to see change.
No matter the life stage, and no matter the issue at hand, countless Tennesseans face the reality of credit card debt. Many might assume that such debt can only occur as a result of shopping addictions, but these situations can often be much more complex.
Financial struggles can last for months, and even years, and can place a major restraint on an individual's well being. Whether it is from student loans, car payments or other life category, not understanding the extent -- or the complete story -- of one's credit card debt can be a daunting experience.
Business magazine Fast Company acknowledges the often frightening aspects of discovering one's credit card debt, only to forget why the debt occurred in the first place. According to a survey highlighted by Fast Company, more than one in ten consumers do not remember the reason they went into the negatives with their credit cards. As of this month, Americans face roughly $1 trillion in credt card debt. It appears that, although some Americans feel they can manage their accounts effectively, many lose track of accumulating debt over the years.
Financial website Wise Bread shares that one negative effect of rising credit card debt in America is that consumers are not paying off the debt fast enough. Payments are occurring, but are not keeping up with the high influx of debt. Another problem involves the number of Americans who carry this burden: using a study showcased in their article, Wise Bread reported that the average U.S. household owed $9,600 in credit card debt in 2016. Skyrocketing interest rates, the extensive time it can take to completely pay off debt and the repercussions of late payments are other factors that a crippling number of Tennesseans must consider when managing credit card debt.
Tennessee is by no means isolated from the tremendous economic fluctuation the rest of the nation has experienced in the past couple of decades. If you consider your lifestyle one of average means, you likely have good and bad times concerning finances. Perhaps you're one of the lucky ones who received a raise in pay this year. On the other hand, maybe the extra financial breathing room proved short-lived when unexpected health problems arose.
Unplanned financial difficulties such as a car breakdown are common setbacks among the working class and most of us aren't equipped with the saving to handle the costs out-of-pocket. Credit cards are a savior to many of us, but can quickly turn into a curse. The important thing to remember is that most financial problems are temporary and not worth going deep into long-term debt over. In fact, you may simply be unaware of available options for securing immediate debt relief.
Avoiding medical debt
The Kaiser Family Foundation lists medical bills as the number one cause of financial crisis in the United States. As many as 40 percent of U.S. residents say medical debt is a key factor in their financial problems. Since you can't predict your future health condition, is there any way to avoid medical bill problems? The following information may help answer this question as well as point you in the right direction if you need debt relief assistance:
Many Tennessee residents have successfully avoided major medical debt by creating emergency savings funds. This involves setting aside monies to use specifically for any medical needs that arise. You can customize your own plan, either by setting aside a predetermined amount according to a regular deposit schedule or by simply tucking a few dollars into the fund whenever you are able, making a concentrated effort to at least save something out of every paycheck.
Nearly 70 percent of U.S. citizens have less than $1,000 saved. You may be even more surprised to learn that nearly 35 percent have no money in savings at all.
To help you start a savings or emergency fund plan, you can analyze your spending habits by writing down all your purchases and expenses. Then, you can create a second list of essential expenditures. You may want to try to eliminate spending money for anything on the first list that is not also on the second.
Sometimes, downsizing, selling assets or taking on a second job is still not enough to overcome a serious financial crisis. If this describes your current situation, you may want to consider other forms of debt relief.
When faced with serious financial challenges, many Tennessee residents may understandably begin to consider whether or not filing for bankruptcy might be the best option for them. In making this decision, it will be important for people to have an understanding about the two primary forms of consumer bankruptcy and how each plan differs. This knowledge will help debtors to make the right choice for their debt-relief needs.
As explained by Experian, the Chapter 7 bankruptcy is often referred to as a liquidation plan because in this type of proceeding, a person's assets may be seized by creditors in order to essentially repay some of the debt owed. With a Chapter 13 bankruptcy, there is typically no loss of assets as instead debts are restructured so that a consumer may literally repay some of what is owed directly.
The United States Court indicates that when a consumer enters into a Chapter 13 bankruptcy plan, a trustee is appointed. This trustee in turn works with all of the creditors to come to an agreement about how much money they will each receive. That agreement is part of determining an amount of money to be paid by the consumer to the trustee every month. Upon receipt of the payment from the consumer every month, the trustee disperses money to each creditor as part of the overall plan agreement.
A Chapter 13 bankruptcy lasts 36 months on the short end to 60 months on the long end. As with a Chapter 7 bankruptcy there is a special means test that consumers must pass to qualify for a Chapter 13 plan.
Constantly dealing with an overwhelming amount of debt can leave you suffering from a lesser quality of life for extended periods. Unfortunately, financial hardships are a concern for many individuals, and while you may take comfort in the fact you aren't alone in this struggle, this knowledge may do little to rectify your situation.
In your search for financial relief, it may seem easy to turn to additional lines of credit for assistance, such as credit cards. However, the aid provided by a similar means is generally short-lived, and with high interest rates on such accounts, such a decision may only add to your monetary woes.
Credit card uses that could spell trouble
While using a credit card for everyday needs can cause a balance to add up quickly, if you are able to pay the balance in full by the due date, such uses might be entirely uneventful. However, using a similar form of credit to fund certain life events could prove detrimental to your financial future, and some examples of such endeavors may include the following:
Medical needs: Whether for a medical emergency, or to pay for scheduled visits, using a credit card for medical bills is never advisable. Both medical expenses and credit cards are two of the leading causes of personal debt and together they can be a dangerous combination.
Special occasions: Although you might want to go all out for special occasions such as a wedding or vacation, adding the price of such an event to your credit card balance could leave you paying for it for years to come.
Funding the holidays: The feeling of providing your loved ones with every gift they wish for and more during the holidays may be exceedingly gratifying, but this feeling may subside once you receive your next statement.
At the time, a credit card might have enabled you to pay for an endeavor you might otherwise have been incapable of funding. However, with high interest rates on such accounts, the price may end up being more than you bargained for, and the resulting financial challenges could leave you in search of relief.
Pursuing debt relief
Similar forms of debt can be financially draining, and if you are constantly unable to keep up with monetary obligations, it may seem like there is no light at the end of the financial tunnel. However, by speaking with someone who is knowledgeable in federal and Tennessee state bankruptcy laws, you could obtain guidance on the options that are available. Obtaining guidance on each outlet, as well as their respective outcomes, may help you become better prepared to pursue relief from debts and move toward a healthier financial future.
A home is a place meant for comfort, security and peace of mind -- these are just a few reasons why a home foreclosure can be so threatening to one's wellbeing and way of life. Countless Tennesseans face this threat but are unsure of where to turn in such hard times. Depending on the situation, avoiding a foreclosure altogether may be a possibility.
HGTV shares some helpful pointers for those experiencing a dreadful property foreclosure, noting that lenders do not always have to appear as villians. In fact, some lenders are willing to compromise when it comes to finding a solution with missed mortgage payments. Another option HGTV mentions is a deed in lieu, in which a homeowner voluntarily hands the deed back over to the bank. Although some lenders discourage taking this route, it may prove beneficial for some homeowners. Bankruptcy is another option, as HGTV states that it can put a halt to foreclosure altogether. After a homeowner files a bankruptcy petition, debt collectors and lenders must cease their collecting actions under federal law.
Where there is a will, there is often a way, including other possible options to avoid foreclosure. The U.S. Department of Housing and Urban Development lists the following alternatives to foreclosure, most of which the U.S. Treasury Department and HUD oversee:
The Making Home Affordable Program
Home Affordable Unemployment Program
Mitigation programs offered by the Federal Housing Administration
The Making Home Affordable Program allows those threatened by foreclosure to lower their monthly mortgage payments. It can also help those who owe more than the worth of the home and homeowners who can no longer afford to pay their mortgages. Another perk to this program is that it aims to better balance America's housing market. The Home Affordable Unemployment Program and various mitigation programs can also help unemployed homeowners in need of assistance. The are additional foreclosure relief programs provided by the HUD.
You got the news no one wants to hear from their doctor -- you have cancer. After the initial shock, you learned all about it and what your treatment options were. You picked a course of action and started acting. Now, not too long after starting treatment, you learn your insurance isn't as helpful as you had hoped and you are facing some serious debt if you continue treatment. Sound like your life? It certainly is the reality for a number of Tennessee residents.
According to a fairly recent news article in The Washington Post, new cancer treatments can cost upward of $100,000 per year. Few people can afford that.
What are doctors doing about it?
In order to help cancer patients get the care they need, some doctors are looking at reducing drug dosages in order to spread them out and decrease the cost of care overtime. This, of course, will take time and trials to determine if the drugs are still effective at half-doses and if it is really beneficial to the patient to go this route. Setting up a trial like this will cost millions of dollars and will require the help of medical centers who are willing to be a part of such a study.
Why do they think this will work?
Food intake affects the absorption of some oral cancer medications. Pharmaceutical companies suggest taking these drugs while fasting in order to maximize absorption, but the doctors who wish to reduce drug amounts believe that food can actually help with absorption. One trial with the drug Zytiga proved this. Though the study was small, bioavailability of Zytiga has increased four to seven times compared to taking a larger amount while fasting.
This small study has given hope that reducing drug amounts and therefore costs is possible. However, more trials are still necessary before this becomes common practice.
Half-doses still expensive
If half-doses of certain drugs for certain cancers becomes a reality, it could save patients a great deal of money. At the end of the day, though, the cost to cover their cancer treatments may still be more than they can afford. This is particularly true if you are an average wage earner.
If you find yourself drowning in debt while fighting for your life, there may be debt relief options available to you. With a little legal help, you can find a solution for your economic woes so you can spend your time focusing on what matters most -- taking care of yourself and your health.
It is a major topic of debate, and also a primary concern for millions. It is both a necessary expense and a dark cloud that can follow graduates for decades. Student loan debt has been in the spotlight for years, as it simultaneously symbolizes a higher education and, more recently, years of ongoing struggle. As a result, some have turned to bankruptcy. This leads many Tennesseeans to ask, is excessive student loan debt worth the satsifaction of earning a degree?
Last spring, PBS News Hour shared the crippling statistic that college student loan debt in the country amounted to $1.4 trillion -- exceeding what Americans owe on car loans and credit cards. While acquiring statistics for job placement and salaries post-college seems an ideal place to start, some financial experts stress the difficulty of such a task. Because many students take college classes part-time as they maintain steady jobs, getting full data on the effects of a college degree can exist in a gray area. The field a student chooses to study is another factor, as some industries have higher projected growth rates than others; relying on colleges to gather data on each major has also proven to be challenging. However, areas such as teaching or social work, for example, do not pay as well as jobs in scientific fields, and can come with differing outlooks on costs.
Of course, there are countless graduates who struggle to pay off student loan debt for years, but there are also those who never completed a degree. USA Today spends time considering college debt, referring to a Consumer Reports National Research Center study to show that roughly 45 percent of people who face loan debt but never finished a degree argue that higher education is not worth the cost. It may seem apparent, but USA Today stresses that completing a degree could give way to a more positive outlook on financial situations. And while parents and scholarships cover a large majority of costs, monthly student loan bills can come with different effects, depending on a person's income.
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