It may be possible for Tennessee consumers to settle credit card debt for less than what they owe. However, it is important to consider the potential consequences of doing so. For example, a debt settlement may only be available to those who can show evidence of a financial hardship. Individuals who are planning on settling their debt should also understand that they can do so on their own without going through a third party.

However, regardless of how the debt is settled, it will likely be reported to the credit agencies. If this occurs, the settlement will appear on a person’s credit report for up to seven years, which may result in a lower credit score. Anyone who chooses to work with a debt settlement company should know that doing so won’t necessarily put a stop to creditor collection calls. It also doesn’t guarantee that a credit card company will reduce a debt balance.

If a balance is forgiven, it may need to be reported as taxable income to the IRS. This generally occurs when more than $600 in debt is waived by a credit card company. However, those who are insolvent could be absolved of any tax liabilities triggered by a debt settlement. Alternatives to debt settlement include debt consolidation.

Those who need help with credit card debt may be able to find it by filing for bankruptcy. Doing so may make it possible to reorganize or eliminate existing balances. An attorney may discuss the possible consequences of filing for bankruptcy as well as some of the benefits of doing so.