Tennessee is a state rich in music, American history, forests, and mountain landscapes. Whether you call Tennessee’s remote mountainsides or bustling cities home, you can probably benefit from tips on debt relief. From ensuring that debt collectors are following the state’s laws to understanding your debt consolidation options, this article will cover some important information about debt relief in Tennessee.
Debt consolidation in Tennessee is an important problem-solver for many families there. From the challenges of unemployment to the fluctuations of the real estate market, debt affects every household differently. However, there are often similar stories for people who live in the same area. Balance transfer credit cards are popular among Tennesseans trying to escape debt, and many have overcome these issues by being proactive and finding solutions that work for them.
Tennessee Credit Card Debt Stats
According to recent statistics, residents of Tennessee currently face a lot of personal debt. This can be attributed to various factors, such as the current economic situation and the high cost of living in the state.
- Average credit card debt per household: $6,217
- Average available credit limit: $12,557
- Credit utilization ratio (debt vs available limit): 33.11%
- The average number of cards: 2.77
- % of accounts that are delinquent (at least 90 days past due): 7.09%
- Average credit score: 662
- Most popular type of credit card: Balance transfer
Statute Of Limitations In Tennessee
If you default on your payments, lenders and collection agencies are allowed to take you to court. However, they must do so within the statute of limitations for that type of debt. In Tennessee, these limits are as follows:
- Mortgage Debt: 6 years.
- Medical debt: 6 years.
- Credit card: 6 years.
- Auto loan/installment loan debt: 4 years.
- State tax debt: 6 years.
Old debts can still haunt us even after the statute of limitations has passed. A debt collection agency or the original creditor can continue to pursue us for payment well outside that time period; they just can’t sue us anymore.
Sometimes, collectors call about “zombie” debts, which are old, time-barred debts that have been discharged, paid, removed from our credit report, or are past the statute of limitations. We need to be cautious about how we proceed when the debt is a zombie debt because it’s possible to reset the clock on debt that’s past its statute of limitations, which would mean that a collector could then sue us.
Options For Debt Relief In Tennessee
There are many ways to reduce debt, and some of the most popular methods vary depending on where you live. In Tennessee, some of the most common options for debt relief include:
Budgeting is a great way to keep your spending in check and avoid racking up credit card debt. By setting limits on how much you can spend in each category, you can make sure your spending aligns with your priorities. This method may not work for everyone, but it is definitely worth a try for anyone struggling to get their finances under control!
Debt consolidation in Tennessee is a process whereby you take out a new loan to pay off multiple existing debts. This can often reduce the overall interest paid and offers the benefit of fixed repayment terms and a fixed interest rate. Additionally, it can help with making timely payments by reducing your monthly outgoings.
Personal loans, medical debt, and credit card debt can all be consolidated, although auto loans may not be included. However, it is worth noting that debt consolidation in Tennessee usually comes with a shorter repayment term, which means higher monthly payments. Lastly, if you don’t have a high credit score, the fees and interest associated with this option could make it more expensive than other alternatives.
There are two main types of refinancing: refinancing in order to get a lower interest rate and cash-out refinancing. In order to refinance for a lower interest rate, you simply get a new loan to replace your old loan. This can also be used to extend the payment term and lower monthly payments. Cash-out refinancing is when you take out a new loan for more than what you owe on your home, and the difference is given to you in cash.
This can be used to consolidate other debts or pay off unsecured consumer debt, such as credit cards. However, doing this will impact your ability to discharge the debt through Chapter 7 bankruptcy. If you’re unable to make payments on a refinance or cash-out refinance, you could lose your home.
Balance Transfer Cards
A balance transfer card can be a great way to save on interest and pay down debt. Here’s how it works: you transfer your debt from high-interest credit cards to new cards with limited-time low- or no-interest deals. This can help you save money on interest and pay off your debt more quickly.
However, there are a few things to keep in mind before you do a balance transfer. First, the low- and no-interest deals often have short terms (12 to 21 months typically), so you’ll need to make aggressive payments to eradicate the debt without fees and avoid falling into deeper debt. Second, you may not be approved for a high enough credit limit to cover all your existing debt.
Bankruptcy may seem like a daunting process, but it can be a helpful solution for those struggling with unmanageable debt. There are two main types of bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy is a plan for asset liquidation to repay creditors and wipe the financial slate clean without requiring ongoing payments. Those who wish to file will need to complete a means test to ensure that they can’t afford to reorganize debt through ongoing payment under Chapter 13.
Chapter 13 bankruptcy, also known as reorganization, is designed to help you establish a payment plan to pay off your creditors within three to five years.
Both types of bankruptcy have their own benefits and drawbacks, so it’s important to consult with an experienced bankruptcy attorney to determine which option is right for you.
Debt is something that can be easy to get into, but very difficult to get out of. If you are feeling overwhelmed by your debts, it is important to remember that it is possible to free yourself from this burden. Residents of Tennessee have a great chance of freeing themselves from high debts if they understand their rights and resources, and are familiar with the legal limits imposed on service providers and collection agencies. By taking advantage of all that the state has to offer in terms of scenery, music, and history, residents can get back on track and enjoy a more fulfilling life.