Tennessee residents behind on credit card payments may be faced with creditor harassment, such as excessive phone calls at all hours of the day and letters demanding payment. They may think that bankruptcy may be their only option, but before making such a drastic decision, there is an option to consider: working directly with creditors to resolve credit card debt. Creditors typically don't want to lose customers, so they'll likely try to work with you to pay off your outstanding balance. The best part is you can do this informally, without having to file for bankruptcy.
Creditors want to avoid going to court, so if you're having trouble making monthly payments for whatever reason, it's best to discuss this situation with the credit card company. They're used to these types of situations and can help you work out a modified repayment plan. Perhaps you can work out a reduced monthly payment or longer repayment period.
You may also want to consider a loan workout, in which you satisfy your debt obligations by partially paying off the full balance. For example, if you owe $5,000 on a credit card, the creditor may accept $3,000 since, if you file for bankruptcy, they'll likely receive nothing. This type of deal could negatively affect your credit score, but you'll be able to pay off your debt without the stigma of bankruptcy.
Sometimes creditors are not agreeable to these types of deals, however. If this is the case for you, bankruptcy may be your only option. Discuss your situation with a bankruptcy lawyer and see if any other options may be available.
Source: FindLaw, "Loan Workouts and Dealing with Creditors Informally," accessed July 5, 2015