Tennessee residents who struggle to pay off their financial obligations often consider seeking relief through certain debt management programs as an alternative to bankruptcy. One option is that of debt consolidation, in which the debtor either obtains a low-interest loan to pay off all debt at once, or transfers balances to a zero percent interest credit card.
There are two primary reasons for consolidation. The first is that a consumer seeks to lower the cost of the debt by lowering the amount of interest he or she is paying. The second reason to consolidate is the convenience of making only one payment per month.
Consolidation can be a good option for those whose debt load does not exceed 50 percent of their current annual income and who have addressed the behavioral issues that led to debt accumulation in the first place. In situations where there is a risk that the debtor will continue to incur additional liabilities or will not be able to make monthly payments on the consolidation loan or credit card, it may be wise to explore other options.
While it is understandable that consumers may wish to meet their obligations, their debt may be so overwhelming that it becomes impossible to do so. At that point, bankruptcy can become a consideration. Individuals and couples who have an income and who would like to keep certain assets, such as a home or car, could explore Chapter 13 bankruptcy which is a court-approved repayment plan that lasts three or five years. People who are interested in this type of a program might want to meet with an attorney and get more information.