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Bankruptcy can be best way out of holiday debt trap

During the upcoming holidays, thousands of Tennessee residents will make countless trips to shopping malls and retail stores to buy gifts. They should be careful, though, to avoid overspending using their credit cards, or they are likely to suffer a financial hangover with the arrival of New Year.

Many people fall into the debt trap each Christmas season. As many have learned over the years, following a strict budget is the best way to avoid spending beyond one's means during the holidays.

Anyone who has accumulated massive debt will be forced to pay far more than they originally intended to spend. In most cases, interest accrues on top of interest every month. This means the person in debt will not be able to save for emergencies or for longer-term purchases, such as automobiles or housing. Over time, missed payments become more likely, and penalties further increase the debt. The debtor is then likely to face credit harassment, lawsuits and wage garnishment. At this point, debt relief will probably seem like an impossible dream to the debtor.

Fortunately, bankruptcy is still an option for dealing with debts. This special tool was created expressly for one purpose: to provide debt relief. It allows debtors to obtain a fresh financial start through different methods of debt settlement, including reorganization and liquidation. A debtor can choose either Chapter 7 bankruptcy, in which all assets are liquidated to cover debts, or Chapter 13 bankruptcy, in which a plan is developed to pay off debts within a set number of years.

Tennessee residents should not be afraid to use bankruptcy to settle debts that have become insurmountable. The process was created specifically for that purpose.

Source: Buffalonews.com, "Holiday debt can turn joy into sorrow," Samantha Maziarz Christmann, Nov. 18, 2013

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
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