Filing for bankruptcy may be an ideal way to keep your Tennessee home or to put a stop to wage garnishment. However, there may be other options available to help you get out of debt without doing as much harm to your credit score or creditworthiness. These options may also help you get out of debt faster than you would if you seek protection from creditors.
Consolidate your debt
Consolidating credit card or other debts with a personal loan, home equity loan or similar products may make it easier to get a handle on your obligations. This is because you’ll only need to make one payment per month while also reducing the interest that you pay to your lender. Consolidation loans are generally available to people who have good or excellent credit, but options may be available for those with bad or thin credit histories.
If you have positive equity in your car or home, you may be able to sell those items to repay your debts. Doing so may allow you to pay creditors and avoid a potential foreclosure or repossession. You may also be able to raise the cash you need in a matter of hours or days as opposed to the months or years it may take to get through the bankruptcy process.
Talk to your lenders
Your lenders may allow you more time to make payments by reorganizing your debt without help from a bankruptcy judge. For instance, you may be granted extra time to make your upcoming payment or allowed to roll missed payments into your existing balance. You may also be able to get the interest on your balance waived for a period of several months.
Prior to filing for bankruptcy, you’ll be required to speak with a credit counselor. Doing so will make it possible to learn more about your options and whether bankruptcy is right for you. If it is, you can expect a Chapter 7 case to last for six months while a Chapter 13 case can last for up to five years.