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Millions of Americans have personal debt in collections

Those Tennesseans who are struggling with overwhelming debt are not alone. In fact, a recent study conducted by the Urban Institute and Encore Capital found that more than one-third, 35 percent, of Americans who have credit files have debt that has been turned over to collection agencies. That's 77 million individuals. The study assessed non-mortgage debts like medical expenses and credit card bills that were so overdue that the account was handed over to collections. The median amount in collections is more than $1,300, a significant amount. Of course, many face much higher debt amounts that can leave them financially debilitated.

Unfortunately, this is not a new trend. A 2004 Federal Reserve study found that more than 36 percent of Americans with credit reports had debts that had been turned over for collection. Sadly, those who face collections could face harassment and may even have their wages garnished. These actions, together with the fear that can come with financial challenges can leave an individual scared and uncertain of his or her future.

The good news is that steps can be taken to free one's self of personal debt and stop creditor harassment and wage garnishment. One way to do this is to file for Chapter 7 bankruptcy. Though the mere thought of bankruptcy may not be enticing, it idea should be embraced by those looking for a fresh financial start. Through this process, assets are liquidated, except for exempt property, and debts are paid off as best as possible. Then, any remaining debt may be eliminated, giving an individual the second chance he or she deserves.

Those who have debts in collections should consider all of their options. By speaking with an experienced attorney, these individuals can become fully informed of the debt relief opportunities available to them and make a decision that supports their best interests.

Source: The Washington Post, "A third of consumers with credit files had debts in collections last year," Jonnelle Marte, July 29, 2014

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
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