Tennessee Debt Relief Programs & Resources

Tennessee Credit & Debt Consolidation Information

Most already know that Tennessee is the home to country music, the Blues and a large chunk of the Great Smokey Mountains. What the Volunteer State is less known for is its lofty standing in the nation for fiscal stability.

According to a recent U.S. News and World report, Tennessee ranks first in the nation in fiscal stability. While that might come as a shock to some who tend to lump Tennessee in with some of the traditionally impoverished states in the south, the Volunteer State received high marks for its collective credit rating and public pension liabilities.

Other numbers, however, don’t paint such a rosy picture of things financially in Tennessee. The COVID-19 pandemic had a large negative effect on Tennessee’s tourism industry and caused unemployment numbers to spike to as high as 15.5% in April and 11% in May before finally leveling out to 6.4% by the end of 2020. The state continues to lag behind in healthcare (No. 43 nationally), education (No. 35), crime and corrections (No. 43) and job opportunities (No. 26), leading to a wide range of poverty and debt problems stretching from Memphis to Kingsport. Some 13.9% of the overall population in Tennessee, and 19.3% of the state’s children, live at or below the poverty line.

Like most American citizens, Tennesseans were likely happy to see 2020 pass and they are hopeful that 2021 will be filled with more happiness and prosperity. However, for those people in Tennessee still struggling with debt problems, there are private and governmental agencies who can help with financial crises.

Debt Relief Options for Tennesseans

InCharge Debt Solutions debt management program is one of the top debt-relief options for consumers overwhelmed by staggering credit card debt. InCharge’s certified credit counselors will personally work with creditors to consolidate credit card debt, lower interest rates and create an affordable monthly payment.

InCharge can assist consumers by dramatically reducing the high interest rates charged by credit card companies. In 2020, the average interest rates charged to consumers by credit card companies was 16%. InCharge has a working agreement with credit card companies and attempt to get the interest rates reduced to around 8%.

The goal pay off credit card debt in 3 to 5 years. However, people in debt must know this going in: They will need to stick to a spending budget — and religiously follow it — so that they can wipe out their credit card debt in that timeframe.

InCharge manages the plan, taking your monthly payments and distributing it to creditors in agreed upon amounts.  You can apply for this plan online or over the phone.

Here’s more good news: credit score is not a factor in being eligible for a debt management program. Even if you currently have a low credit score or your credit has been dinged in the past, you could still be eligible to join.

Here are some other assistance programs that Tennesseans have available to them:

• Debt consolidation loans – If your credit score is high enough, you could receive a low-interest debt consolidation loan. You would use the loan to pay off your high-interest credit card debt. You will still be responsible for paying off the consolidation loan, but you won’t be penalized by the high interest rates that credit card companies charge their customers.
• Debt settlement – This is a debt-relief option in which you pay less than what is owed to settle a debt. Credit card companies would have to agree to accept a lump-sum payment that is less than the amount owed. While helpful, this plan can also be a risky option because of the negative impact it will have on your credit score for the next seven years.
• Bankruptcy – While choosing the bankruptcy option will wipe out your credit card debt, this should only be chosen when every other option has been tried. Bankruptcy settlements will negatively impact your credit score for a 7-to-10-year period, meaning that it will almost certainly impact your chances of purchasing a home or a new car. Think twice about your future plans before choosing this risky option.
• Do it yourself plans – If you are the do-it-yourself type and you don’t mind working your way through challenges, you could consider a DIY debt management program that best matches your personal finances.

Tennessee Debt Resources

Tennessee residents who are finding it difficult to pay their bills can get assistance through a multitude of state assistance programs. Here are a few of the services that are offered to Tennesseans in need:

• Food banks and pantries: Almost all of Tennessee’s food banks are coordinated and cultivated by volunteers who do the work they do out of the goodness of their hearts. Their hope is that no Tennessean has to go to bed hungry at night. FoodBanks.net has a statewide listing of where citizens in need can go for food and supplies or locations where those who want to donate food can do so.
• Food Stamp Programs: The Tennessee Department of Human Services provides assistance programs to families in need because of weather events that might have caused power outages. The Tennessee Food Stamps Organization is a trusted resource that will help low-income families who qualify to buy groceries to feed themselves and their children.
• CoverRx: This division of TennCare helps out those who have no pharmacy coverage, but are still in need of medication. The assistance plan offers more than 200 generic drugs, including medications such as insulin and mental health medications. This plan is only available to residents between the ages of 18-64 who have incomes at or below federal poverty levels.
• Mortgage and Foreclosure: The Housing and Urban Development department offers a variety of free and low-cost programs to citizens who are struggling to pay their mortgages and are potentially facing foreclosures. The Making Home Affordable Program can help homeowners lower their monthly payments and get better loans with lower interest rates.
• TennCare: TennCare is a state medicaid plan that offers health insurance to residents who don’t have access to other insurance plans. TennCare Connect’s portal allows you to personally create an account, apply for benefits, make changes, check your status and get alerts and updates.
• Federal Temporary Assistance for Needy Families (TANF) — Families First: This temporary assistance plan is designed to help families join the workforce by finding employment that best suits their skills. The program focuses on work training and teaching personal responsibility. it provides temporary cash assistance, help with childcare, job training and educational support. To qualify for this program, citizens must meet technical and financial standards.
• Social Services: The Tennessee Department of Human Services hopes to build strong and loving families by providing support services and access to education and employment. One program offered, Child Care Services, works to ensure the health, safety and quality of life of kids in its care. Also, the Department of Human Services has partnered with the YMCA and Boys and Girls Clubs of Tennessee to offer free child care for school-aged children.
• Vouchers for Paying Rent: Housing and Urban Development offers low-income tenants help paying their rent with monthly voucher assistance programs. The Public Housing Agency also has a limited supply of low-income housing, but those waiting lists can be lengthy, so it is wise to apply to several agencies. Your local PHA can give you a list of locations that accept monthly rent vouchers.

Tennessee Debt Statistics

Even though Tennessee is often lumped in with other mostly impoverished Southern States, the Volunteer State is actually in relatively solid standing financially. Tennessee has the fifth-lowest amount of state debt in the U.S. with debt ratio of just 17.3%. Because of its lack of income tax and other tax cuts provided to residents, Tennessee has evolved into one of the nation’s most tax-friendly states.

However, it’s not all gumdrops and rainbows for everyone in Tennessee in terms of their finances. Here is a look at some financial numbers around the state:

• Auto loan debt: Tennesseans have an average auto loan debt of $4,780, giving them one of the lowest amounts in the country.
• Mortgage Debt: According to the most recent data available, the average mortgage debt is $155,844 among Tennesseans who own their own homes. That’s up 2.7% over the previous year, but it’s still a relatively low amount of debt because of the modest cost of living in the Volunteer State.
• Household debt: The average Tennessee citizen had approximately $42,500 of debt in 2020. According to the Department of Numbers, the median household income in Tennessee is just $56,071 — $9,641 lower than the median household income in America. Among Tennessee’s metro areas, Nashville ($70,262) was far and away the leader in median annual income — well ahead of Knoxville ($56,623), Chattanooga ($55,366) and Memphis ($54,859).
• Credit card debt: On average, Tennesseans have just $5,688 in credit card debt. That figure puts the state 28^th in the nation in terms of the amount owed. Also, it is well below the national average of $6,194 for credit card debt.
• Student Loan debt: Tennesseans owed approximately $36,200 in student debt on average in 2020, according to educationdata.org. More than 818,000 people or 12% of Tennessee residents still have student loan debts.
• Identity theft: Tennessee citizens did a relatively solid job of protecting their identity in 2020, ranking 22nd nationally in fewest cases of identity theft. There were 5,178 reported cases of identity theft in 2020 or 1 out of every 76 Tennessee residents.
• Credit scores: Tennesseans have an average credit score of 697 in 2020, a seven-point improvement from 2019, but still well below the national average of 710. . 6
• Bankruptcy and foreclosures: Bankruptcies are still something of a problem in Tennessee with 21,317 cumulative filings. While that’s down 36 percent from 2019 (33,306 filings), Tennessee’s 2020 total still ranks at the seventh most nationally and the third most per capita.