Alaska Debt Consolidation
Debt Help in Alaska
Most consumers do not enter their adult life with the goal of going knee-deep into debt. For some it happens gradually, with a few poor spending choices adding up to a huge amount of debt. For others, unexpected changes, like the loss of a job or staggering medical bills, are the primary culprit. For Alaskans who have more debt than they can handle, a variety of options and even some state programs can help them get back on their feet.
Alaska Debt Consolidation and Credit Counseling
When debt begins to skyrocket, most Alaska residents begin to look for some option to find help. Debt consolidation programs or credit counseling services are often the first option they consider. A debt consolidation program is typically a loan that takes all of a consumer’s debt and rolls it into one loan amount. This will save the consumer money, because the new loan typically has a lower interest rate than the average interest rate the debtor is paying, particularly when the debt is primarily in the form of credit card debt.
Before signing up for any debt consolidation program, those deep in debt should consider seeking the help of a qualify consumer credit counseling service. The State of Alaska Consumer Protection Unit recommends the services of the Consumer Credit Counseling Service of Alaska (www.cccsofak.com). Consumer Credit Counseling Service of Alaska offers help in the form of credit counselors that come alongside those in debt to help them reach their financial goals. The company works with a variety of financial counseling professionals to help with cash management counseling, debt management planning, housing programs, and IRS advocacy programs.
If you choose to use another credit counseling program, make sure you know ahead of time about all fees and charges involved. Some unscrupulous companies will charge high fees while offering little to no help. Protect yourself by doing thorough research before signing up.
Alaska Debt Relief Programs
Alaska’s debt relief services provide the next level of support after credit counseling for those who find that credit counseling provides insufficient help for their problems. These programs aim to provide a solution when debt is simply too much to bear.
Debt relief may be in the form of credit card debt settlement. In this situation, credit card companies agree to write off the debt in return for being paid some of what is owed, in contrast to being paid nothing. Often consumers feel more confident when seeking a settlement by working with a debt relief company.
While debt relief companies can be a big help when dealing with debt, Alaska consumers need to proceed cautiously when contacting these companies. Debt relief services are not free, and the way in which fees are charged sets the good companies apart from the less ethical ones. Make sure that the fees are reasonable and that you can afford them, and learn exactly when they will be charged before agreeing to work with any debt relief program.
Alaska Debt Collection Laws
The federal government passed the Fair Debt Collections Practices Act, a law that provides consumers with protection against predatory debt collection techniques. Under this law, debt collectors may not do the following:
• Threaten violence against you, your property, or your reputation
• Publish a list of consumers who are delinquent in their debts
• Repeatedly call on the phone with the intent to annoy
• Use obscene language
• Advertise consumers’ debts
• Talk on the phone without properly identifying themselves
• Make false statements when trying to collect debt
• Call before 8:00 a.m. or 9:00 p.m. in your time zone
• Call you after you have contracted with an attorney
• Call you at work if you have made it clear your employer does not approve
If you would like to stop collections calls, you must contact the collection agency in writing asking for communication to cease. If they fail to comply, they are in violation of the law.
The state of Alaska understands that consumers who have problems because of debt do not need the pressure added by forceful debt collection techniques. While all consumers are protected under the federal Fair Debt Collection Practices Act, Alaska takes the protection a step further with a supplementary state law that dictates how debt collectors can behave toward debtors.
Under this supplementary law, debt collectors may not engage in an “unfair trade practice.” This is defined as when the debt collector gives the impression that an agreement made with the debtor gives “rights, remedies, or obligations which it does not confer or involve, or which are prohibited by law.” State law also gives consumers the right to sue debt collectors for violation of debt collecting laws in certain circumstances, and also allows the award of attorney fees to be given to the consumer if the lawsuit is successful.
Keep in mind that Alaska also has a statue of limitations in effect. This means that debt collectors must attempt to collect the debt within a set amount of time. For open accounts, like credit cards, debts must be collected within 6 years. All other forms of debt, including oral agreements, promissory notes and written contracts, also have a statute of limitations of six years.
Alaska Mortgage Assistance Programs
Alaska has a variety of mortgage assistance programs designed to help consumers either purchase a home or keep the home they have when facing debt problems. The Alaska Housing Finance Corporation (www.ahfc.state.ak.us) offers several programs for low to moderate income homeowners to use to buy their first homes. These include a tax-exempt first time homebuyer program, the Rural Owner Occupied Loan Program, and several multi-family loan programs. Alaska also participates in the USDA Rural Home Loan Program, which offers a more affordable loan option to those seeking to live in rural areas of Alaska. Several of these programs have government backing, making them ideal for those with poor credit ratings.
Homeowners who have fallen into trouble with their mortgage may be able to refinance under the Make Home Affordable federal refinancing program. This federal refinance option lowers interest rates and extends mortgage terms to make monthly payments more affordable, thus allowing homeowners to avoid foreclosure.
Alaska Government Assistance Options
The Alaskan government does not offer assistance with debt beyond mortgage programs and recommended credit counseling agencies. That said, some of the state’s public assistance program, such as temporary cash for needy families, can help consumers get back on their feet after facing a life-altering event that led to catastrophic debt.
