Tennessee Debt Relief Attorney
Many people accrue debt when they finance a new car, get a mortgage, or use a credit card to cover an unexpected expense. Debt in itself is not harmful, as long as borrowers make timely payments. But if you can’t pay on time, late fees can make it hard to catch-up on your bills. Late payments can also damage your credit rating and cause credit card companies to increase your interest rates.
If you need help managing your debt, call us today at (931) 962-1044.
A Common Problem
United States households have an average credit card debt of almost $16,000. That debt can cause problems, especially when the terms of your credit card contract are unclear or misleading.
Even if you’ve been “guaranteed” a low introductory interest rate, credit card companies can raise your interest rate at any time – and they definitely will if you make a late payment. When your interest rate increases, that means it takes longer to pay off a purchase. And when one creditor raises your interest rate, your other creditors might do the same.
Credit cards can be helpful when you need to pay for an emergency car repair or some other expense that’s not in your budget. Even so, a change in your finances – the loss of a job, for example – can cause you to fall behind on payments and lead to long-term credit problems.
Profiting From Consumer Debt
Some businesses profit from people who have financial problems. Payday lenders, for example, have been known to attract customers by promising “easy” loans for people with poor credit. Under Tennessee law, the fee for such a loan can’t exceed 15 percent of the total loan. But those fees often lead to a cycle of debt – when a $400 loan comes with a fee of $60, the fee itself can create further economic hardship. According to the Center for Responsible Lending, borrowers with five or more loans per year account for 90 percent of payday lender business.
Consumers should be cautious about companies that claim they can eliminate debt or prevent foreclosure. Anyone who offers legitimate consumer debt relief services will refrain from making promises, because debt relief solutions will vary, depending on an individual’s specific circumstances.
In 2008, Tennessee Attorney General Bob Cooper filed a lawsuit against a company that he said masqueraded as a government agency and stole money from people facing foreclosure. The company, Tennessee Housing Protection Agency, charged people fees for “foreclosure rescue” without providing any actual services. The company’s misleading name may have caused consumers to mistake it for the official Tennessee Housing Development Agency.
When consumers don’t know where to turn for debt help, they can fall victim to unscrupulous businesses. But you can trust John R. Colvin with your debt concerns. Call us today for your no-obligation consultation at (931) 962-1044.
Debt Relief Laws and Your Consumer Rights
Law provides protections for both businesses and consumers. While collection agencies can contact you in an effort to collect a debt, federal law prohibits them from harassing you, threatening you, or calling you at inconvenient times or places.
It may be possible to negotiate with creditors about the terms of repaying a debt. Occasionally, a creditor might be willing to waive late fees or accrued interest, if a borrower will commit to a repayment plan. But people who have multiple debts sometimes choose to file for bankruptcy protection.
The most common consumer bankruptcy filings are classified as:
- Chapter 7 – To be eligible for Chapter 7, a person must pass a means test — that is, their income and assets must be below a specific threshold. If a person is eligible for bankruptcy, the court may order a liquidation of all or some of his assets so the appointed trustee can repay the borrower’s debts, or the court may find that the assets are of little value and choose not to liquidate them.
- Chapter 13 – In Chapter 13, filers work out a repayment plan and retain their assets. Over a period of three to five years, a person makes payments to the trustee, who in turn pays creditors.
Bankruptcy can put an end to collection calls, but it does not resolve all debt – student loans and child support payments, for example, cannot be included. Bankruptcy also negatively impacts one’s credit rating for up to 10 years, so it’s important to consider other options first.
Tennessee Debt Relief Attorney
If you’re feeling overwhelmed by debt, call the Colvin Law Firm today at (931) 962-1044, or fill out our online contact form. We may be able to help.