The economic downturn didn't simply take people's jobs and homes; it also caused many people to lose their good credit ratings. Still, a lot of people found themselves relying on credit cards and other unsecured debt to survive. With no income to pay those debts off, quite a few Tennesseans were forced to file for personal bankruptcy. That often necessary action is typically accompanied by worsened credit ratings, and Tennessee was recently ranked number 10 on the list of states with the worst credit.
CardRatings.com calculated each state's ranking based on five measurements related to an individual's credit rating: personal bankruptcies, home foreclosures, average credit scores, credit card delinquencies and unemployment.
The state with the worst credit ranking was Nevada. Other states with poor credit rankings included Georgia, Arizona and California. North Dakota was ranked the best in the nation.
Though the economy appears to be getting better, many people are still unemployed or underemployed and have turned to credit cards to pay for essentials such as food, rent and utilities. High credit card interest rates only compound the problem, especially if the person is unable to pay more than the minimum balance due each month.
Bankruptcy can provide debtors with a fresh financial start. However, bankruptcy laws have changed in the last decade. Couples and individuals who want to file Chapter 7 or Chapter 13 bankruptcies may need to hire attorneys to help them. An attorney can recommend the best bankruptcy option for keeping assets, ending foreclosure proceedings and fixing a variety of financial problems.
A bankruptcy professional can also make sure the right paperwork gets filed with the court, negotiate with creditors and help guide bankruptcy petitioners through the process.
While it is true that a bankruptcy can remain on a credit report for up to 10 years, people can still improve their credit ratings by paying bills on time and living within their means. Tennesseans interested in the bankruptcy process may want to stop by our Tennessee bankruptcy page. Our firm helps individuals with unmanageable debt make the right decisions regarding debt relief.
Source: The Tennessean, "Study: TN's personal credit condition poor," Duane Marsteller, Aug. 15, 2012