Tennessee residents who have a lot of credit card debt might decide to take out a loan as a way to consolidate their debts, lower interest payments and get out of debt faster. While debt consolidation loans may help some debtors, such loans may cause others to get deeper into debt.

A person may have more success with a debt consolidation loan if they get a loan that has a low interest rate and short repayment terms. To avoid running up credit cards again while debt is consolidated, a person may want to take their credit cards out of their wallet or close their credit card accounts altogether.

Studies have shown that debt consolidation loans do not work for a majority of debtors. One study published by the Association for Financial Counseling and Planning Education showed that 87.5 percent of people who take out debt consolidation loans incur more debt within one year. The Panel Study of Income Dynamics found that taking out a debt consolidation loan does not make a debtor any less likely to file for bankruptcy.

Consolidating debts into one loan may not help a person who has little to no income. A person who cannot afford to make payments on their debt may need to file for Chapter 7 bankruptcy. Bankruptcy can help a debtor to stop collection attempts and have debts discharged. Even if a debtor does not have any assets of value that can be liquidated, their debts can still be discharged in the Chapter 7 bankruptcy process.