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What are my options to get rid of TN debt, besides bankruptcy?

Overwhelming debt is a major concern for many Tennessee consumers. Unexpected expenses, such as medical expenses, can cause a major dent in one's wallet. To start anew, many consumers turn to bankruptcy. While bankruptcy is an effective way to quickly eliminate debt, it can cause much damage to a once-excellent credit score. There is also a stigma attached to it, which is why many people attempt other options first. What exactly are your other options for debt relief?

First, look into debt consolidation loans. These are often available for amounts up to $30,000, depending on your income and credit score, and allow you to consolidate your high-interest credit cards into one affordable loan. If you owe less on your home than it is worth, you may also qualify for a home equity loan. However, you may be forced to use your home as collateral, so consider this option carefully because if you default on the loan, you will lose your home.

If a loan is not an option, try calling your creditors directly and discussing your situation. They may be able to lower your interest rate or modify your monthly payments to make them more affordable, especially if you recently experienced an unexpected situation such as job loss or medical emergency.

A credit counseling service may be another option. These companies help eliminate debt and provide counseling to give you financial skills, so you do not end up in debt again. Nonetheless, this option may affect your credit score, so read the fine print carefully.

Bankruptcy should only be used as a last resort. A filing stays on your credit report for a decade, which is a long time when you are considering purchases such as a home or car. Find other ways to pay down debt. It may be a lot of work, but at least you will be making a good faith effort to eliminate debt.

Source: FTC.gov, "Debt Relief or Bankruptcy?," accessed on Oct. 11, 2014

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