Kentucky Debt Consolidation
Debt Help In Kentucky
When your debt becomes a problem, you face many tough decisions. Before surrendering for foreclosure or hiring a bankruptcy attorney, find out what debt help options the state of Kentucky offers.
Kentucky Credit Counseling and Debt Consolidation
Before you consider bankruptcy or another drastic option for dealing with your debt, take some time to talk to a reputable Kentucky credit counselor. Credit counseling agencies help consumers create a budget and learn about the way money works. A good credit counselor will help you learn to work with the money you already have to pay down your debt and live within your means.
The challenge when it comes to Kentucky credit counseling services is finding a reputable company. You will have to pay for these services, even when working with a non-profit organization, so make sure to do your research into the companies’ reputations. For a good place to start in finding reputable credit counselors, visit the Justice Department’s website at http://www.justice.gov. These credit counselors are approved to work with federal bankruptcy cases in Kentucky. While this does not guarantee that you will get good service, it does help you feel more confident in the abilities of the organization.
If your debt load is incredibly high and the interest rates are also high, consider a debt consolidation loan. A debt consolidation loan is a low-interest loan, often one with collateral behind it, that is used to pay off your high-interest debt. By lumping all the debt into one loan, you lower your monthly payment and often allow yourself to pay off your debt faster.
Kentucky Debt Relief Programs
Kentucky debt relief programs work similarly to credit counseling services. They provide budgeting advice and help consumers plan for paying off their debt. In addition, debt relief programs may work with the consumer to negotiate with their creditors. While this is something consumers have the right to do on their own, many do not feel confident and do not possess the negotiation skills necessary to do so. A Kentucky debt relief company can step in and be the voice for the consumer, working toward a debt settlement or better interest rates.
Keep in mind that, like Kentucky credit counseling, debt relief services are not free. You will pay for this, and the fees can be quite high. You must determine if paying for a service you could, in theory, do on your own is worthwhile, and then you must carefully research for a reputable company. Look to resources like the Better Business Bureau for insight into a company’s reputation.
Kentucky Debt Collections Laws
Kentucky does not have a broad state law regarding debt collections. Instead, debt collectors in Kentucky must follow the laws outlined in the Fair Debt Collection Practices act, a federal law dealing with collection agencies. It does not apply to original creditors.
The FDCPA specifically prohibits several actions. Under the law, debt collectors may not:
• Tell third parties that someone has a debt
• Identify the debtor’s employer to a third party in most situations
• Contact third parties repeatedly
• Use foul, profane, or racial language in any form of communication
• Threaten, harass, or intentionally embarrass the debtor
• Call before 8:00 a.m. or after 9:00 p.m.
• Continue to contact debtor after receiving a written request to cease, in which case they can only make contact when something changes in the account
• Call a debtor at work if told not to
• Collect any additional amount not permitted by law
• Intentionally mislead the consumer
There are some things that debt collectors are required by the law to do when contacting consumers. They must clearly state why they are calling. They also must follow up any contact with a written letter stating the creditor, the amount of the debt, when the debt was taken on, and what the consumer can do to dispute the debt.
In addition, Kentucky state law protects 75 percent of disposable weekly earnings from garnishments by creditors. The maximum that a collection agency can collect is eight percent in Kentucky.
Like all states, Kentucky has a statute of limitations in place to protect debtors who may face a lawsuit. Any creditor wishing to sue a delinquent debtor must do so within the time frame set forth in the statue of limitations. The statute of limitations in Kentucky is as follows:
• Oral agreements – Five years
• Written contracts – Fifteen years
• Open accounts (like credit cards) – Five years
• Promissory notes – Fifteen years
Keep in mind that the time frame starts the month after the account becomes delinquent.
Kentucky Mortgage Assistance
The Kentucky Housing Corporation offers several programs to help those interested in becoming homeowners. The Down Payment and Closing Cost Assistance program (DAP) is one of these. For purchases up to $258,000, homeowners can get a six percent, five-year term loan to use to pay their closing costs. The HOME-DAP program is slightly different and offers up to $4,500 in assistance with no minimum monthly repayment amount and a five-year term. The HOME Special Program and HOME Family Program offer even more money. All of the HOME programs have income guidelines. In addition the Special Program is only offered to those families with a family member who has a permanent disability, and the Family Program is only offered to those with children living at home.
HUD and the Federal Housing Administration also offer buyers programs, some of which assist those with lower credit ratings in their attempt to buy a home. Kentucky homebuyers can also take advantage of Mortgage Credit Certificates, which are tax credits that reduce the federal income tax payment and therefore give the buyer more income for the loan. For more information about these programs, visit www.kyhousing.org.
Homeowners facing foreclosure can call the state’s Protection Center at 866-830-7868. This hotline connects them with housing counselors who can help them work through financial problems to hopefully keep their homes.
Kentucky Government Assistance Programs
The state of Kentucky offers debt assistance in the form of consumer education. To learn about your debt repayment options, visit the Kentucky Department of Financial Institutions at http://www.kfi.ky.gov.
