2012 is officially here, and with it comes the chance for a fresh start. Probably not surprisingly, the top New Year's resolution for Tennessee families is to get in better shape - financially speaking, that is.
Tennessee bankruptcy lawyers know that 2011 was a tough year for consumers - and it isn't expected to improve to pre-recession levels until at least 2013 or 2014 thanks to sliding home values, lackluster business growth, and unemployment of around 9.4%, according to the Tennessee Business and Economic Outlook.
But while the state economy may be out of our control, we can still regain power over our own finances this year with a few smart money moves, including Tennessee bankruptcy.
Do something about your mortgage
It's estimated that more than 25% of U.S. homeowners are dealing with an underwater mortgage, in which more is owed on a home than the home is presently worth. This makes it all but impossible to sell a home if payments become unaffordable, particularly for homeowners who have experienced rising expenses, pay cuts, or job loss - often resulting in foreclosure.
With today's remarkably low rates, some banks are allowing homeowners to refinance in order to achieve better terms. Of course, banks are pretty stringent on their refinancing guidelines, and even those homeowners who are approved may only end up saving a few hundred bucks a month at most.
If you're unable to make your mortgage payment, you have nothing to lose by talking to lenders. But if you really want to make a mortgage affordable, there may be no better option than Chapter 13 bankruptcy. Filing for Chapter 13 in Tennessee has the power to stop the foreclosure process, eliminate unsecured debts like those burdensome credit card bills, and free up money to help you make payments that you're comfortable with.
Watch out for credit traps
Credit cards are a perpetual Catch-22. When times are too tough to pay the bills, they can help you squeak by. But before you know it, your growing credit card debt makes it impossible to pay the bills. So, if you're like most people, you open up another credit card account and ring up more debt and interest - and the problem just snowballs.
While credit cards are a temporary, and often problematic, solution, bankruptcy has the ability to offer a permanent and viable solution. A Tennessee bankruptcy filing attacks the root of the problem by getting debt under control so consumers can once again start putting money toward their bills rather than into the hands of credit card companies.
And as previously mentioned, Chapter 13 bankruptcy can also stop foreclosure - so you can keep your house while you work toward a more stable financial situation.
Find financial balance
It sounds overly simple, but the key to healthy finances is really just figuring out how to balance your spending with your earning. For the many folks without much freedom to increase income or reduce spending, a bankruptcy filing may be the best bet.
Today is a scary time for consumers. Economic growth and earnings growth are both sluggish. Banks are aggressively pursuing foreclosure after just a few missed payments. Credit card companies are playing up rewards programs and other perks while downplaying drawbacks like high interest and bank fees.
Bankruptcy offers a way to get a handle on debt once and for all, freeing up more money for house payments and other bills and protecting the finances and freedom of struggling debtors.