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Data shows that Americans paying bills on time as debt rises

According to an analysis of consumer-credit data, Americans have more credit card debt than they did a year ago, but it appears that people are nonetheless paying their credit card bills on time. The data shows that, while credit card debt rose 6 percent from last year, the late-payment rate for credit card users is at an 18-year low.

Tennesseans should note that these numbers indicate that consumers are better managing their credit cards, with many people even prioritizing credit card payments over mortgage loan payments. Consumers seem intent on getting out from under credit card debt little by little.

But even as the low late-payment numbers are a good sign, Americans are still adding on more debt. The 6 percent increase is likely due in part to increased hiring nationwide and improvement in consumer confidence.

Still, many people in Tennessee and throughout the country are unable to keep up with their credit card bills. Anyone struggling financially should know that credit card debt is unsecured debt, meaning that it can be eliminated in Chapter 7 or Chapter 13 bankruptcy.

A Chapter 7 bankruptcy is usually reserved for those with very serious debts that cannot reasonably be repaid. The process involves the liquidation of assets in order to sell them and pay back creditors, and Chapter 7 is a means-tested form of bankruptcy, so not everyone qualifies.

Chapter 13 bankruptcy allows you to repay debts using a structured repayment program that typically lasts between three and five years. It also doesn't stay on your credit record as long as a Chapter 7 bankruptcy.

If you're being harassed by debt collectors and banks regarding credit card debt, you have several options. It is always good to seek professional advice from an attorney in these cases, as bankruptcy law is complex, and everyone's circumstances are different.

Source: News Channel 5, "Number of new credit cards issued up 4 pct in 2Q," Aug. 14, 2012

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