Getting Out of Debt

Write down every debt you owe: the balance, the interest rate, and the minimum payment. This alone often reduces the anxiety of not knowing the full picture.

The snowball method pays the smallest balance first while making minimums on everything else, then rolls that payment into the next smallest debt. It builds momentum through quick wins. The avalanche method pays the highest interest rate first, saving more money over time but with slower visible progress. Either is valid, pick the one you'll actually stick with. Only put extra money toward debt after food, housing, utilities, medication, and transportation are covered; paying ahead should never put essentials at risk.

Payday loans, car title loans, rent-to-own agreements, and many buy-now-pay-later plans carry extremely high effective interest rates and fees designed to keep you borrowing. If you're ever tempted by one of these because of an emergency, reach out to us first, there may be another way.

Not all debt is bad. A reasonably sized loan from a credit union for a real need, like reliable transportation to keep a job, can be a healthy tool. The difference is the size, the purpose, and the lender.

You have rights under federal law. You can request debt verification in writing before paying anything, and collectors cannot harass, threaten, or lie to you. You can also request they only contact you in writing. If you receive court papers or a lawsuit about a debt, don't ignore them: there are deadlines to respond, and missing one can lead to a judgment against you. Contact Legal Aid Society of Middle Tennessee and the Cumberlands (1-800-238-1443) or another qualified legal or nonprofit credit counseling service for complex debt questions.