Delaware Debt Consolidation
Debt Help In Delaware
Consumers in Delaware who find themselves deep in debt have several places they can turn for help. From government-approved credit counseling agencies to the state’s generous mortgage assistance programs, these state and federal programs will help consumers better manage their debt situation, putting them back on the road to a strong financial future.
Delaware Debt Consolidation & Credit Counseling
Credit counseling should be your first consideration any time you are dealing with overwhelming debt. A credit counselor can provide you with the education and support you need to start managing your money better. While these services are not free, the cost is often much less than the cost of continuing down the path of debt problems.
The U.S. Department of Justice maintains a list of approved credit counseling agencies. These companies are the ones that those seeking bankruptcy must use. While you may not be facing bankruptcy, working with an approved company offers the security of knowing that you have a legitimate company to deal with. You can find that list by searching for “Delaware” at http://www.justice.gov/.
If you honestly cannot make the payments on your debts and many of the debts are high interest credit cards, consider seeking some sort of debt consolidation option. Debt consolidation allows you to lump all of your debts into one low-interest loan. If your credit is stable in spite of your debts or you have an asset, like your house, that you can borrow against, this gives you a far more affordable repayment solution. Just make sure that you can afford the monthly payment when the loan is complete, and do not use your house or another valuable asset as security against the loan unless you are confident in your ability to repay.
Delaware Debt Relief Programs
If you need more help than credit counseling or debt consolidation can provide, consider looking into debt relief programs. While they vary in their tactics, most debt relief programs aim to help consumers by negotiating with their creditors on their behalf. Often this results in a debt settlement, which allows the consumer to pay back the loan for a fraction of what is owed. The state offers a list of approved debt relief organizations at http://attorneygeneral.delaware.gov.
Always choose a licensed company if you opt to use a debt relief program over some other option. However, make sure you understand the cost involved. If a company is not open and upfront about the costs associated with the program, they may have something to hide and may charge more than you should pay for the services.
Delaware Debt Collection Laws
Delaware does not have a state-specific set of debt collection laws. Like all states, however, it follows the guidelines outlined in the Fair Debt Collection Practices Act, which limits the actions that creditors and debt collection agencies can take in an attempt to collect on your debts. According to the law, creditors or debt collectors may not:
• Use harassing or threatening language when in contact with you
• Call before 8 a.m. or after 9 p.m.
• Call you at work if they know your boss does not allow it
• Tell the debtor’s friends or families about the debt, although contact with others is allowed if the agency is looking for ways to contact you
• Intentionally mislead in an attempt to collect the debt
If you do not want to be contacted, you simply need to write to the debt collection agency and inform them of this fact. Doing so will not change the status if your debt, but it will end the constant phone calls.
Delaware has a statute of limitations on enforcement of debt. This means that creditors must seek legal action within a set period of time after your account has become delinquent. The statute of limitations for Delaware is:
• Open accounts, like credit cards: 4 years
• Written contracts: 3 years
• Oral contracts: 3 years
• Other contracts: 3 to 4 years
In addition to these laws, Delaware has wage garnishment cap. Under current laws, creditors can garnish up to 15 percent of any statutory net income, and this garnishment stays in effect until the balance is paid. Creditors cannot garnish bank accounts.
Delaware Mortgage Assistance Programs
Mortgage assistance programs in Delaware fall into one of two categories, either assistance in buying a home or assistance in avoiding foreclosure. For those facing imminent foreclosure due to circumstances outside of their control, the Delaware Emergency Mortgage Assistance Program (DEMAP) offers help to avoid the process. In order to qualify for the program, the homeowner must:
• Have an income within the stated income qualifications
• Be at least 90 days delinquent in mortgage payments
• Have had good credit prior to this problem
• Have a financial hardship beyond the homeowner’s control
• Have no more than two mortgage on the home
• Be able to demonstrate the potential of resuming a normal payment schedule in the near future.
If you need help through this program, contact the Delaware State Housing Authority at www.destatehousing.com.
If you are in the market to buy a home but traditional mortgages will not work well, either because of your credit situation or because you lack the necessary funds for a big down payment, the state can help. The Single Family Mortgage Revenue Bond Program is designed for first-time home buyers. Qualifying low- to middle-income applicants buying in targeted areas of the state can get a home loan at below-market rates. Those who need help with closing costs or their down payment can look into the Second Mortgage Assistance Loan, which provides up to $10,000 to use as a down payment or to pay closing costs. This is a second loan that the borrower repays along with the regular loan.
Delaware Government Assistance Options
The state of Delaware does not offer any other debt assistance programs, outside of its mortgage services and credit counseling recommendations. Those struggling with day-to-day bills should look into the state’s public assistance options.