When you sign an agreement to take out a loan or a credit card, you are agreeing to repay whatever you borrow in a timely manner. It’s written clearly in the paperwork that you are given. What is also written clearly is the fact that the lender reserves the right to sue you if you fail to repay your debt. This is allowed under the debt law Knoxville. If you lose your job or suffer a decrease of income for whatever reason, the lender doesn’t care. All it is concerned with is getting paid back for the money you borrowed. However, it would be one thing if the money demanded was what you took out, except it usually isn’t.
The lender adds on late fees, various charges and sharply increases the amount of interest when you are late on payments. This adds a significant amount to what you already owe. Insult is added to injury when the lender moves to sue you in civil court in an attempt to garnish your wages or your bank account. Again, this is legal under debt law Knoxville. Now you have to deal with having your income reduced again by the lender picking your pocket every time you get a paycheck or money in your bank account.
The quickest and cleanest way to stop all creditors in their tracks is to file for bankruptcy. Chances are good that your credit rating is already destroyed by the collection activities, so bankruptcy isn’t going to make a difference to it in the short term. Filing for insolvency clears your debt load in one sweep while preventing your creditors from contacting you. It also stops garnishments of all types, and can even return money into your account that’s been paid out to the creditor.
Filing a petition for bankruptcy creates what is known as the automatic stay. It’s a temporary injunction that tells creditors that they are not to contact you at all while the bankruptcy is active. Doing so violates the stay and opens them up to a fine of up to $1,000 per each attempt. If your bankruptcy is successful and you are discharged, the injunction becomes permanent and your creditors can never demand money from you ever again.