Kansas Debt Consolidation
Debt Help In Kansas
Kansas residents who are struggling with more debt than they can handle will find a variety of state and federal programs available to them. Whether you are looking for advice on managing money or help avoiding foreclosure, these programs can help.
Kansas Credit Counseling and Debt Consolidation
A credit counseling firm can be an invaluable resource when dealing with a large debt load. Credit counselors help consumers with their debt by aiding them in forming and sticking to a budget, helping them learn where they are going wrong with their spending, and providing the emotional support sometimes needed when debt gets out of hand.
While most non-profit credit counseling firms are working with the consumers’ best interest in mind, some choose to prey on those in difficult financial situations by charging far more than is necessary for their services. Kansas does not regulate these agencies, and neither does the federal government. However, some debt relief organizations have been given approval by the Department of Justice to work with federal bankruptcy cases in Kansas. These are found at http://www.justice.gov. Using one of these firms is a good idea, because they have been checked out by the Justice Department.
Another option you have for dealing with your debt problem quickly is looking into a consolidation loan. Consolidation loans combine all debts into one loan. Sometimes these are home equity loans that use the equity you have in your house to get a lower rate on the loan. The goal with any consolidation loan is to find a loan product with a lower interest rate than the average you are currently paying, then to make the most of that lower rate by not adding to your debt after you have paid it down.
Kansas Debt Relief Programs
Kansas consumers have the right to negotiate with their creditors. Sometimes they can get a lower rate or even a debt settlement, which is a situation wherein the creditor agrees to accept less than what is owed as payment for the debt in place of not getting paid at all.
Negotiating with creditors is scary for some, and so some look to Kansas debt relief programs to help them with the negotiations process. Kansas debt relief programs will contact creditors on the behalf of the consumer, negotiating settlements or lower payment plans, thus helping the consumer deal with the debt problem.
One issue facing consumers who choose to use these services is the vast number of unethical companies posing as debt relief firms while failing to offer the consumer the best scenario for their debt. Many will charge extremely high fees and offer little in the way of services for the consumer. Some companies will mislead consumers into thinking that money is going to pay down debt, when in fact it is going to pay the company’s fees. Carefully research any Kansas debt relief programs you are considering before signing up.
Kansas Debt Collections Laws
Kansas has a series of laws aimed at protecting the consumer from unethical practices common in the debt relief industry. Kansas follows the laws outlined by the Fair Debt Collection Practices Act, a federal law that dictates what debt collectors can and cannot do. According to these laws, debt collectors must:
• Not contact you at inconvenient times or at inconvenient places. This is typically defined as before 8:00 a.m. and after 9:00 p.m. or at your place of employment, unless allowed to do so by your boss.
• Stop all contact if you write them requesting them to do so. After receiving your letter, the only time they may contact you is if an action is occurring about your account, such as you are being sued.
• Never harass you by threatening harm, threatening to tarnish your reputation, or using profane or otherwise offensive language.
• Not repeatedly call anyone on the phone with the express purpose of annoying.
• Not use false or misleading statements in an attempt to collect the debt.
• Always send a letter explaining which debt they are trying to collect and what you can do if you wish to dispute the debt.
If you feel that a debt collector is violating these rules, you can sue them in either a Kansas court or a federal court. You have one year in which to do this. You can also file a complaint with the Attorney General by calling the Office of Consumer Protection at 1-800-432-2310 or visiting www.ksag.org. The Federal Trade Commission will also take complaints at www.ftc.gov.
If your accounts are in default, your creditors may try to pursue legal action. Keep in mind that Kansas has a statute of limitations that dictates when they can legally do this. The time frames for the statute of limitations start the month after the account goes into default. These limitations are as follows:
• Oral contract – Three years
• Written contract – Six years
• Promissory note – Five years
• Open accounts (credit cards) – Three years
Kansas wage garnishment laws protect 75 percent of an individual’s earnings. This means your creditors can only garnish 25 percent of your paycheck.
Kansas Mortgage Assistance
The Kansas Housing Resources Corporation (www.kshousingcorp.org) offers a First Time Home Buyers program that assists first time buyers with their down payment. This is for low to middle income individuals who can make an investment of $500 or two percent of the sale price on a home, whichever is greater. The program then offers a loan of 15 to 20 percent of the sale price to be used for closing costs and a down payment.
Borrowers with poor credit can pursue the FHA home loan program. This program is federally backed, which allows lenders to look at income and employment status rather than credit rating to determine eligibility.
If you are looking at a foreclosure in your near future, contact a HUD qualified housing counselor to get help. You can find this information at http://www.hud.gov.
Kansas Government Assistance Programs
In addition to these services, the Kansas Health Policy Authority offers LIFELINE, a hotline you can call to help you get out of debt and understand your debt relief options in Kansas. The number for LIFELINE is 1-800-284-7575.