check to make sure it's threaded right--I kept having problems yesterday and I'd missed a tension guide. if your tension is ok, it could be that you have the quilt too tight on the frame, loosen the top roller one notch or two and see if that helps.
Also, I'm assuming that you are using thread intended for LA use--I have some cones of Sulky thread that just will not work on my machine, I think many of us find a thread that we really like and our machines do too, so you might want to experiment a little with that.
With tension, if the top thread is shredding, it may be too tight top tension. if it looks like it's been cut, you could have a burr somewhere along the thread path--but it's more likely a tension problem or a thread problem.