Louisiana Debt Consolidation

When debt becomes so difficult to manage that you feel bankruptcy is your only choice, you need to look into debt relief programs offered by the state of Louisiana. Help is available, if you know where to turn.

Louisiana Credit Counseling and Debt Consolidation

The first stop to take when you find yourself struggling with debt is a credit counseling agency. Credit counselors provide support and advice to those struggling with debt. They do not pay down your debt, but they will help you figure out how you can do so on your own, often with just the money you already make.

The key to a successful relationship with a credit counselor is finding one with a good reputation. If you know someone who has been through bankruptcy or used a credit counselor, ask them about their experience. You can find a list of bankruptcy-approved credit counselors at http://www.justice.gov/ust/eo/bapcpa/ccde/CC_Files/CC_Approved_Agencies_HTML/cc_louisiana/cc_louisiana.htm.

One option to consider as you work with a credit counselor is pursuing a debt consolidation loan. Louisiana debt consolidation loans allow you to lump all of your debt into one loan product. The goal is to find a loan option with a lower interest rate than you are currently paying for your debt. For instance, if you pay off your credit cards with a home equity loan, you can shave hundreds off of your monthly debt payment by lowering your interest rate substantially. Your credit counselor will caution you only to do this if you know you can be disciplined not to return to your poor spending habits and add to that debt again.

Louisiana Debt Relief Programs

Louisiana debt relief programs go a little but further than credit counseling. In addition to providing advice about your debt, they also work with you to negotiate with your creditors for better terms and possibly debt settlement. You should know that you can do this on your own without paying for third-party involvement, but sometimes having someone else come alongside and negotiate for you is worth paying for. Just make sure you are working with a company that has a good reputation, because some companies posing as Louisiana debt relief firms are looking to rob you of your hard earned money.

Louisiana Debt Collection Laws

Louisiana primarily follows a federal law called the Fair Debt Collection Practices Act. This law outlines the way in which debt collectors can act toward debtors. Under the law, debt collectors:

• Cannot call at inconvenient hours, such as before 8:00 a.m. or after 9:00 p.m.
• Cannot call repeatedly with the attempt to annoy.
• Cannot make threatening statements, use profanity, or otherwise harass a debtor.
• Must identify themselves and the reason they are calling, as well as the creditor and the debt in question.
• Must send a letter identifying the debt and what a debtor can do to dispute it.
• Cannot disclose that an individual has a debt if talking to third parties.
• Cannot call at work if they have been asked not to.

If you ever wish a debt collector to stop contacting you, you must make the request in writing. Once received, the request stops all communication, unless a new step is taken with your account, such as if the creditor decides to pursue legal action. Even though communication from the debt collector has stopped, you are still responsible for the debt you owe.

In addition to the laws outlined by the FDCPA, the state of Louisiana outlines actions the original creditor can and cannot take:

• The original creditor is not allowed to contact anyone outside of the debtors home unless they are doing so to try to locate the debtor, are seeking to seize property as is the creditor’s right to do so, or the debtor authorized the contact.
• Original creditors may only mail a notice to the debtor one time per month once the debtor has requested an end to communication.
• Any communication cannot be threatening in nature.
• Original creditors may make four additional personal contacts if seeking a debt settlement.
• Once the creditor sues and wins the lawsuit, the order to cease communication is no longer valid.

Louisiana operates under statute of limitations laws. These laws state when a creditor can legally file a lawsuit about a default debt. The statute of limitations for Louisiana is as follows:

• Open accounts (like credit cards) – Three years
• Oral agreements – Ten years
• Promissory notes – Five years
• Written contracts – Ten years

Louisiana protects its workers through wage garnishment laws. If your creditors wish to garnish your wages, 75 percent of your disposable weekly earnings are protected under the state laws. Louisiana also limits collections agencies to a 12 percent interest rate.

Louisiana Mortgage Assistance

The Louisiana Housing Finance Agency offers several programs to first time homebuyers looking to purchase a home in the state. The HOME Assisted Program Loan, for instance, offers a loan with a 4.10 percent interest rate that is used to help cover down payment and closing costs. Homebuyer Tax Credit Program Loans offer a low interest rate of 5.60 percent that is also used for the down payment costs. Eligibility for programs such as these depends on the location of purchase and the income of the borrower. More information is available at http://www.lhfa.state.la.us/programs/homeownership/first_time_homebuyer.php.

In the continuing wake of Hurricane Katrina, many mortgages in Louisiana have turned into foreclosures. If you are facing foreclosure due to your debt, however, you may be able to take steps to prevent it. The earlier you seek help the better, as doing so increases the likelihood that you can keep your home. Call 888-995-HOPE to be placed in contact with a housing counselor.

If you wish to buy a home but find your low credit score is a hindrance, talk to your lender about a loan backed by the Federal Housing Administration. FHA loans have government backing, so they do not rely heavily on your credit rating.

Louisiana Government Assistance Programs

Louisiana does not offer any specific programs for debt assistance outside of their generous mortgage assistance programs. However, several public assistance options can help those struggling with debt who are also in low income situations, as they free up money to use to pay off debt.