Connecticut Debt Consolidation



For consumers in Connecticut, debt can become overwhelming. When you face bills that you have no idea how to pay, consider looking into some of Connecticut’s debt help options.

Connecticut Debt Consolidation & Credit Counseling

Before you consider bankruptcy or any drastic measures to take care of your debt problem, research your options for credit counseling. Many times people think their debt situation is much worse than it truly is. A credit counselor can offer support and advice for making and sticking with a budget and paying down debts quickly.

The best way to choose a credit counselor is to use one approved by the Department of Justice to work with bankruptcy cases. These companies have been looked at by the government and offered governmental approval. You can find a list of these agencies at http://www.justice.gov/ust/eo/bapcpa/ccde/CC_Files/CC_Approved_Agencies_HTML/cc_connecticut/cc_connecticut.htm. One of these, the Consumer Credit Counseling Service of Southern New England (http://www.creditcounseling.org/AboutCCCS/Default.asp), is a HUD-certified credit counselor as well, so they can help not only with Connecticut debt relief but also with housing purchase decisions.

One option that some Connecticut credit counselors may discuss is debt consolidation. A debt consolidation program allows consumers to take all debts and roll them into one loan. This only helps your situation if the loan has a lower interest rate than the rate you are currently paying and if the monthly payment is more affordable, putting it in a range you can handle in your monthly budget.

Connecticut Debt Relief Programs

Connecticut debt relief programs go a step further than credit counseling by actually stepping in and serving as the go-between for the consumer and the creditor. Connecticut licenses companies called “debt adjusters.” All licensed debt adjusters have the right to take consumer’s money and send it to creditors on behalf of the consumer. You can find a list of the licensed Connecticut debt adjusters at http://www.ct.gov/dob/cwp/view.asp?a=2233&q=297874.

Often, debt adjusters also offer credit counseling services as they work with consumers. This means the consumer receives education about finances and their credit options, while at the same time benefiting from the debt adjusters’ services as a debt relief agency.

When working with any type of debt relief company, be cautious. While the licensed companies have passed the state’s qualifications for what they do, they may still be expensive. These services are not offered free of charge, and often the fees are hard to distinguish. Make sure that you are receiving ample benefit from any money you are spending for debt relief services.

Connecticut Debt Collection Laws

Connecticut’s debt collection laws aim to protect consumers from over-aggressive collections tactics, while still giving creditors ways they can attempt to get their money. Collection agencies have the right to contact you in person, by mail, over the telephone, through a fax, or through a telegram. That said, debt collection laws prohibit any contact before 8 a.m. and after 9 p.m. also, if you tell the debt collector that you have the services of an attorney, the collector must talk to your attorney instead of directly to you. Also, the debt collector may not call you at work if your employer disapproves of this practice.

Keep in mind that the only entities that the collection agency can tell about your debt is you, your attorney, your creditor, your creditor’s attorney, and a credit agency. The collection agency can call your friends or family to find out where you live and how to contact you, but they can only do so one time per person and they cannot mention that you owe any money.

Often, consumers know they owe money, but they do not want the pressure from the collections agency to make the situation more stressful. If you do not want the credit agency to contact you anymore, you need to contact them in writing to tell them to stop. After receiving the letter, the debt collector may only contact you if something about your case changes. You still must repay the debt, however, even if the calls stop.

Remember, certain debt collection practices are always prohibited. These include:

• Harassment
• Threatening statements
• False or intentionally misleading statements
• Collecting more than is expressly authorized by the agreement in the debt
• Deposit post-dated checks early

If you feel a debt collector is in violation of the law, you can sue them in state or federal court within one year of the violation. You can also file a complaint with the Connecticut Department of Banking. You can either use the online form or write to them at:

Connecticut Department of Banking
Government Relations and Consumer Affairs
260 Constitution Plaza
Hartford, CT 06103

Connecticut Mortgage Assistance Programs

Connecticut and the federal government offer a variety of programs that can help those struggling to pay their mortgages or buy a home. The state has a Mortgage Foreclosure Assistance Hotline. Consumers who face foreclosure can get immediate help by calling 877-472-8313. The hotline is open weekdays from 8:00 a.m. until 5:00 p.m.

Those interested in buying a home, even if they have bad credit, may benefit from one of the state’s home buyer programs. Connecticut offers the following programs:

• Down Payment Assistance Program
• Homeownership Mortgage Program
• Home of Your Own Mortgage Program for those with disabilities
• Urban Rehabilitation Homeownership Mortgage Program
• Section 8 Housing Choice Voucher Mortgage Program
• Mobile/Manufactured Home Mortgage Program
• Rehabilitation Mortgage Loan Program
• Smart Move Second Mortgage Program

You can find out more about these programs at www.chfa.org.

In addition to these options, consumers with bad credit may wish to look into buying a home with an FHA backed loan. These loans have government backing and require a small down payment. The small down payment makes it possible for those with little extra money to get a home, while the government backing increases the likelihood that someone with bad credit will get approved. Talk to your lender about current FHA loan options and the costs involved with the loans.

Connecticut Government Assistance Options

Outside of these programs, Connecticut offers few debt assistance options. That said, some of the state’s other public aid options, like its temporary cash for needy families program or its assistance programs that help consumers pay for their utilities, can free up money to help them work on their debt situation.

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