Tennessee Debt Relief: A Solution to Your Debt Struggles
16 MIN READ
Published March 29, 2023 | Updated September 22, 2023
In a Nutshell
Anyone can fall into debt. Emergencies, poor money management, or unrealistic spending can all cause you to outpace your monthly income. Whatever the reason for getting into debt, Tennessee debt relief programs give you access to a debt-free life by managing, consolidating, or settling your debts.
Keep reading to better understand how debt relief works in Tennessee.
Tennessee Debt Statistics: Economic Picture
In 2022, the state had a surplus of $12.1 billion after paying off its debts, largely due to the federal Covid-related grants. Tennesseans enjoy a state with sound financial health and no income tax.
However, the state also faces rising poverty levels at 13.6%, far above the nation’s average of 11.6%.
Debt and Debt Statistics Specific to Tennessee
To paint a clear picture of the financial situation in the state of Tennessee, here are the types of debt Tennesseans face every day:
Average Consumer Debt
The national average consumer debt in America is $101,915, with these debts peaking for individuals aged 40-49. This figure includes the total amount of debt for both secured and unsecured debts like auto loans, high-interest credit card debt, mortgage loans, and, student loans.
Credit Card Debt
Tennessee's credit card debt is $5,228, making it number 30 among other states, while the U.S. credit card debt jumped 18.5% in 2023. It’s also worth noting that the statute of limitation on Tennessee's credit, state tax, mortgage, and medical debt is six years and four years for installment and auto loans, respectively.
TurboDebt's debt relief programs in Tennessee can help you overcome outstanding credit card bills.
Auto Loan Debt
The cost of auto loans has skyrocketed in the past couple of years, and Tennessee residents are feeling the effects. Auto loan debts averaged $22,307 in 2021 in the Volunteer State, a jump of over 6% from the previous year.
With a population of over 7 million people, Tennessee has approximately 3 million housing units, with 66.5% of the population as homeowners. Tennessee's average mortgage debt is $187,394, ranking 30th among the state in mortgage debt.
Student Loan Debt
The average Tennessee student owes $36,418 in student loan debt. With a state total of $31.4 billion, plenty of residents are paying off these loans.
Struggling with educational debt doesn't have to wreck your financial security. Debt relief options like our programs at TurboDebt are meant to help you start rebuilding wealth.
In 2022, a total of 17,834 residents filed for bankruptcy in Tennessee. After peaking at more than 60,000 bankruptcies in 2005, individuals filing for Chapter 7 and Chapter 13 bankruptcy have steadily declined. This is good news for those struggling with debt as more debt relief options become available for Tennessee residents.
Average Income and Employment
The median household income in Tennessee is $58,516, with an employment rate of 57.7%. As of March 2023, Tennessee's unemployment rate sat at 3.4%.
Household debt rose to $16.51 trillion in the fourth quarter of 2022. Credit cards, mortgages, and loans all contribute to household debt levels.
Tennessee residents enjoy an average credit score of 702. This is close to the nation's 714. Residents with a high FICO score enjoy better access to lower interest rates when borrowing money from lenders.
Tennessee ranks 19th in the nation with 16,124 reports of cybercrime and identity theft in 2022. Guarding your digital information is important as online fraud increases.
Banking and Tax Info
Tennessee is one of the few states where residents aren’t obligated to pay income tax. However, state sales tax is currently 7%.
A 2021 survey from the FDIC found that 5% of households in Tennessee were unbanked. This means that a group of residents choose to use methods other than traditional banks to access funds. Some alternative banking options, such as a payday loan, can cause debt when users get charged high fees.
TurboDebt Helps Tennessee Residents Find Debt Relief
TurboDebt has helped a total of 2,661 Tennesseans manage and eliminate their outstanding balances to start living debt-free. We've saved residents of the Volunteer State up to 48% of their total debt before fees, enrolling over $16 million in debts from credit cards, medical bills, and personal loans. If you're looking for Tennessee debt relief, be sure to reach out for a free consultation.
Top Types of Debt to Get Relief from in Tennessee
Credit Card Debt
Tennessee residents face credit card debt like the rest of the nation as inflation drives more consumers to charge essential goods and services. Even paying a minimum balance isn't enough to keep you out of debt. After paying 1-2% of the balance with an interest rate that could soar above 20%, you typically only put a couple hundred dollars toward the principal.
Debt relief companies like TurboDebt can help you overcome massive credit card debt through Tennessee-specific programs that consolidate and eliminate your outstanding balances, minimizing high interest rates and late fees to save you money.
Since Tennessee advocates for dividing debt accumulated during the marriage, you may find yourself in more debt after a divorce than you were before. Taking on loans or credit card balances on top of legal fees can leave you struggling with excessive debts.
At TurboDebt, we understand the difficulties of trying to regain your financial stability after a divorce. Contact us to find out which debt relief options can help you get back on track.
Business owners often take on personal debt to cover expenses while supporting a company. In fact, the average small business owner owes $195,000 to creditors.
Depending on the amount of your business loan, TurboDebt-certified credit counselors can advise you on the best business debt relief program to help you get back on the road to profitability.
With 58% of America's medical debt in collections, many families are in need of a solution to pay off complex healthcare bills. Unexpected medical events can leave you owing thousands of dollars after insurance. Those without insurance can even struggle to afford basic healthcare services.
TurboDebt offers debt relief solutions for outstanding medical debt. Let us help you avoid debt collectors and fees with a personalized program to eliminate your medical bills.
Mortgages account for the largest portion of average consumer debt, making homeowners some of the most debt-ridden residents in the state. However, other costs of homeownership can drag you into debt, including repairs and maintenance.
Homeowner associations may levy fees for items like exterior paint and landscaping. Some homeowners even take out a home equity line of credit (HELOC), a personal loan borrowing against their home's equity (added value).
If the costs of owning and maintaining your home are causing you to fall into debt, consider getting debt relief help from a reputable organization like TurboDebt. We can help you manage your outstanding balances and mortgage debt, advising you on the best course of action to avoid foreclosure or spiraling debt.
Tennessee is one of the leading states in managing consumer retirement packages and benefits. Although the state provides solid oversight on pension plans and 401(k) options, moving to a fixed income is challenging for many retirees.
Reach out to TurboDebt for expert opinions on Tennessee retirement debt relief options and alternatives to debt management. Start with a free consultation today.
Options for Debt Relief in Tennessee
Tennesseans can achieve debt relief in a multitude of ways. Each option varies in requirements, payment procedures, and the types of debts covered. Let’s look at how you can achieve debt relief using different methods and programs in Tennessee:
Debt Management Programs
Debt management programs provide debt relief options designed to liberate you from a never-ending debt cycle. Throughout the debt management process, experienced credit counselors work with you to find favorable repayment plans that won’t strain your budget. However, most debt management programs only work if you commit to making consistent monthly payments.
In many debt management programs, you’ll be asked to close all your previous credit cards to avoid the accumulation of interest rates and incurring additional debt. Then, you'll typically create a debt management plan with a realistic timeline for paying off your debts.
After setting up a dedicated savings account, you'll start making on-time monthly payments. The debt management company then disperses these monthly payments to individual creditors. Debt management programs are suitable for individuals with consistent monthly income and who are facing high interest rates from personal loans and credit card bills.
The advantages of debt management programs may include the following:
- Reduced interest rates from creditors
- Fixed repayment period
- Simplified payment structure
- Affordable payments that take your debt-to-income ratio into consideration
- No debt collection communication from creditors
- Improved credit score from consistent payments
Debt Consolidation Loans
Debt consolidation is a debt relief initiative where you get a bigger loan at a lower interest rate to pay off all your existing loans at varying interest rates. To qualify for a debt consolidation loan in Tennessee, you must meet the following requirements:
- Be above 18 years
- Be a U.S. citizen
- Have a steady income-generating job; providing pay stubs is best to prove it
- Demonstrate that you’re financially stable with a debt-to-income ratio below 36%
- Have a good credit rating
Debt consolidation can save you money by reducing the high interest fees involved with credit cards. You’ll repay these loans over an extended period of time, resulting in low monthly payments.
Some lenders offering debt consolidation loans include credit unions, banks, and online lenders. Online lenders may have predatory terms, so be cautious with them. Generally, you'll find lower interest rates if you have a good credit score. If your credit score is unfavorable, consider getting a co-signer.
Debt settlement achieves debt relief when the creditor agrees to receive a portion of the money being owed and forgive the rest. The money debtors pay back is often only 50% of the loan balance. Debtors view debt settlement as a way of avoiding bankruptcy due to the high amount of debt.
For example, if you owed $35,000 and signed up for a debt settlement program that negotiates a payment of 55% of your debt, you will end up paying only $19,250 while the creditor forgives the rest. It's important to note, however, that you’ll be required to pay an income tax on the forgiven amount of $15,750.
Debt settlement companies typically complete a debt negotiation to help you reduce your total debt amount for unsecured loans like credit card debt, medical bills, and personal loans.
In credit counseling, certified credit counselors work with you to find the best solution to your debt problems. After enrollment in a program, you'll typically be assigned a personal expert to discuss your financial needs. These credit counselors are qualified in debt management, consumer credit, and budgeting.
Credit counselors will advise you to come up with a budget for how you’ll pay off your debt, give you free financial education, and assist you in getting a free copy of your credit report. You can choose from nonprofit credit counseling agencies or private organizations that offer instruction on how to better manage your financial resources.
Bankruptcy is generally the final form of Tennessee debt relief. Whether you file as an individual or business, bankruptcy helps you liquidate your assets or come up with a repayment plan with the aid of legal professionals.
The different types of bankruptcies most commonly filed in a bankruptcy court as outlined by the U.S. Bankruptcy Code are:
- Chapter 7 or Chapter 13 bankruptcy for individuals
- Chapter 7 or Chapter 11 for businesses who want to liquidate their assets or re-plan them, respectively.
Debt forgiveness is a debt relief program where you’re forgiven partially or the entire amount that you owe. Though debt forgiveness isn’t very common, the several kinds of debts that can be forgiven by lenders include the following:
- Tax debt
- Student loans
- Credit card loans
- Medical bills
The downside of debt forgiveness is that amounts greater than $600 that are forgiven have to file with the IRS as income tax. Regardless of the organization providing debt forgiveness, you'll also need to meet specific requirements to qualify.
Debt and Financial Hardship Resources in Tennessee
Outside of the various debt relief programs in Tennessee, there’s still hope for recovery if you're struggling financially. The state of Tennessee offers debt and financial hardship resources to help those in need of immediate assistance. They include the following:
Tennessee Temporary Assistance Programs
Permanent Affordable Housing: Through this service, residents pay at least 30% of their income as rent and can stay for a period of 3-5 years as long as they’re in the low-income bracket.
Transitional Housing: These facilities offer services such as job training, substance abuse treatment, and psychological and abuse assistance to homeless and near-homeless people to help them transition back into society.
State Health and Human Services
Drug and Alcohol Rehab: These facilities are meant for treating alcohol and/or substance dependents. The state also provides grants for substance abuse treatment.
Supportive Housing: Individuals, who, because of age, mental illness, chronic unemployment, substance abuse, or disability, can’t live by themselves without care, can stay in these facilities for assistance and care.
You can apply for childcare payment assistance in Tennessee if you meet the following requirements:
- You're employed for less than 30 hours a week or are pursuing a post-secondary education full-time. Additionally, the TANF Opportunity Act helps post-secondary students achieve self-sufficiency by funding them.
- You're in custody of a child between the ages of six weeks old to five years old.
- Your household income is below the 85th percentile of the state’s median income.
Shelters for the Homeless
Tennessee provides a number of shelters and services to help the homeless. Many of these shelters are located in Nashville, Knoxville, or Memphis, and are grouped into the following:
Day Shelters: Any homeless shelter that allows low-income or homeless people to shelter during the day or on an overnight basis fits in this category. Such shelters provide basic hygiene, meals, laundry, and shower facilities for free.
Emergency Homeless Shelters: Three out of five of these shelters offer free services with a maximum stay of three months. They also serve meals and account for other basic needs.
Halfway Housing: These facilities help bridge the gap between homelessness and permanent housing. Residents can stay for six months to two years.
Free transportation services
Transportation programs and services are offered state-wide in Tennessee for free, especially for the old. They span from the Greater Tennessee area (NorthEast), East Tennessee area, Greater Nashville area, South Central area, and South West area to the Mid-South area.
Get Reputable Debt-Relief in Tennessee with TurboDebt
TurboDebt offers debt relief help where Tennessee residents need it most. With thousands of five-star reviews, we provide debt management options, saving clients up to 49% of their total debt before fees.
TurboDebt helps you secure low repayment fees by negotiating with lenders to reduce interest rates on credit cards, and personal loans, often cutting your total payment in half. Take advantage of our free debt relief consultation today!