Debt Relief in Tennessee: Facts, Programs, and Solutions

Key takeaways:

• People in Tennessee tend to have a higher than average rate of credit utilization.

• If you’re struggling to keep up with your debts in Tennessee, you have a wide range of options.

• Once you’ve considered options, it’s vital to decide which is the best for your situation and act on it.

If you’re reading this article, you’re already embarking on one of the most empowering financial moves you can make. Learning more about debt relief can help you take control of your situation.

So congratulations on not allowing yourself to stay stuck, for aiming to break the cycle of debt. Learning about debt relief options in Tennessee can help you make a fresh start.

Perhaps the best news is that the range of debt relief choices available in Tennessee allows you to choose the approach that best fits your needs.

Average credit card debt in Tennessee- debt relief seekers

Credit card debt in Tennessee impacts many across all age groups. We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during November 2024. Here are the key statistics:

Copyright© $2024. Freedom Debt Relief, LLC.
 www.freedomdebtrelief.com

This snapshot shows that the average credit card debt for Tennesseans seeking debt relief rose slightly month-over-month (MoM), with the percentage of debt holders and the average debt for balance carriers experiencing a modest increase.

Breakdown of average credit card debt by age group

This breakdown shows how credit card debt affects each age group in Tennessee, with older adults generally carrying higher balances and a greater proportion holding debt.

Copyright© $2025 Freedom Debt Relief, LLC.
 www.freedomdebtrelief.com

Debt settlement: A powerful solution in Tennessee

If you just can’t keep up with your credit card bills and you’re tired of being hassled by debt collectors, debt settlement may help. Debt settlement is a process of negotiating with creditors to pay less than the full amount that you owe. 

Why would creditors accept that? Well, as the saying goes, half a loaf is better than none. Creditors understand that if someone is drowning in debt, they probably have other creditors trying to get money from them as well. They figure it would be better to accept a partial settlement if the alternative is to potentially get nothing at all. 

Debt settlement isn't a get-out-of-jail-free card. It’s important to understand the trade-off between the benefits and consequences of debt settlement. However, if you’re already missing payments and can’t figure out how to pay what you owe, it’s worth considering. It may be your best shot at starting over.

When is debt consolidation the right choice?

If you’re struggling with debt but aren’t missing payments, debt consolidation may be the right choice for you. Debt consolidation is when you take a new loan and use it to pay off more than one smaller debt. It could make your debts easier to manage by lowering the number of monthly payments you have to make. 

Better yet, if you can lower the interest rate on your debt, you might find it more affordable. In particular, if you have a lot of high-interest credit card debt, you may be able to lower your interest rate by paying if off with:

• A personal loan

• A 0% balance-transfer credit card

• A home equity loan or line of credit.

Debt consolidation makes the most sense if you:

• Have a strong enough credit score to qualify for a debt consolidation loan or balance transfer credit card

• Have planned ahead and know you’ll be able to pay off the new debt. 

Other debt relief alternatives in Tennessee

Here are some other debt relief options that may be all or part of the solution for your situation:

• Hardship programs. These are arrangements some creditors offer to make it easier to pay what you owe. They may include delaying or reducing monthly payments, suspending late fees, or lowering your interest rate.

• Income-driven repayment plans. These are most commonly offered in connection with government-backed student loans. These plans base your monthly payment on the amount of money you make. This can help you afford student loan payments on a low income.

• Credit counseling. Credit counseling could mean different kinds of help. It may simply entail having a qualified credit counselor explain your various debt relief options to you. Or it may involve a debt management plan. This is an ongoing relationship in which the credit counselor can manage your debt payments for you. 

• Bankruptcy. This is a legal solution. A court decides how to use your income or assets to settle your debts to the extent possible. If no other debt relief solution seems like it will work, bankruptcy could get debt collectors off your back so you can start over.  

Understanding the statute of limitations (SOL) on debt in Tennessee

If you have an old debt that someone is trying to collect, there may be one more form of debt relief available to you. Tennessee has a statute of limitations that prevents people from suing to collect most forms of debt after six years. That period begins when the payment is due. 

Just because the statute of limitations has passed, it doesn’t mean the debt is canceled. A creditor or debt collector can still attempt to collect it from you. However, they can no longer take you to court for payment. 

Taking the next steps

Now that you have information on debt relief options, your next move should be acting on that information. Whatever debt problems you have, carefully consider the choices available to you, and decide which is the best fit for your situation.

Making that decision can be the first step toward taking control of your finances back from creditors and debt collectors.