Maine Debt Consolidation

Whether you are knee-deep in debt and looking for a way out or are considering entering the borrowing world as a first-time homebuyer, the state of Maine has several programs that can aid you in your financial endeavors.

Maine Credit Counseling and Debt Consolidation

Some Maine residents find themselves in financial trouble due to debt. To begin dealing with your debt problem, you may want to contact a Maine credit counselor. A credit counselor will help you learn about better ways to manage your money. They can help you set up a working budget to free up money to pay down your debt.

Find a reputable credit counselor, because you will have to pay something for these services and need to know you are getting quality help. The state has a list of recommended companies here: http://www.maine.gov/treasurer/money_management/index.html. You can also use a company that is approved for federal bankruptcy cases, which you can find through the Justice Department.

You may wish to consider consolidating your debt as an option for paying it off. Consolidation takes your debt and rolls it into one loan. Search for a consolidation loan that offers a lower interest rate than the average of the interest rates you currently pay.

Maine Debt Relief Programs

Maine debt relief programs give consumers an advantage when negotiating with their creditors. Debt relief companies will actually work with your creditors to help you get better repayment terms or even a debt settlement offer. However, you will pay for these services, and laws do not permit debt relief companies from doing things you can’t do on your own. You must decide if you really want to pay someone for something you can do for free.

Maine Debt Collection Laws

Maine is exempt from the federal Fair Debt Collections Practices Act, but most of the state’s own debt collection laws are the same as the federal one. Under the state’s law, debt collectors who are talking to someone other than the debtor must identify themselves and identify his employer only if requested. The debt collector may not make mention of the debt, nor can he communicate with someone more than once, unless the individual asks him to do so. They can only ask for the necessary contact information.

Debt collectors may not communicate by postcard. Also, they may not include anything on an envelope that makes it look as though it contains legal or government documents. In all communication, the debt collector must be honest and open, never communicating with the intent to deceive. Harassing or foul language is not allowed. Debt collectors must assume, unless told otherwise, that the time period between 8 in the morning and 9 at night is convenient for communication, and they may not make communication at other times, unless it is requested by the debtor.

If you wish to stop receiving communication from the debt collector, you can write them asking for them to stop. State law requires them to comply. If they do contact you, it must only be because something has changed with your account, such as your creditor decided to sue you. You are still responsible for the debt, but the phone calls and visits will stop.

If you choose to work with an attorney in relationship to your debts, debt collectors may not contact you, but they must contact your attorney to discuss your debts.

If you feel that the debt collector working on your case has violated these laws, you can report them to the Bureau of Consumer Credit Protection at 1-800-DEBT-LAW. You can also write to:

Bureau of Consumer Credit Protection
35 State House Station
Augusta, Maine 04333

Maine has a statute of limitations in place. This law limits the amount of time in which a creditor can file a lawsuit against a debtor. The state’s statute of limitations are as follows:

• Open accounts (like credit cards) – Six years
• Oral agreements – Six years
• Promissory notes – Six years, or 20 if signed before a witness
• Written contract – Six years

The state of Maine also provides protection to its consumers through wage protection. The state’s laws protect 75 percent of disposable weekly earnings. In addition, the maximum a debt collector can charge for collecting a debt in Maine is $25.

Maine Mortgage Assistance

Whether you need help getting a mortgage with a bad credit score, are looking for your first mortgage, or see foreclosure in your near future, the Maine Housing Authority (www.mainehousing.org) is the first place to check for help. One program, the Gift of Green, offers grants to certain homebuyers that help fund the down payment and closing costs, while also providing a home energy audit coupon. The First Home Program offers affordable mortgages to those who have not owned a property in the past three years. Some income limits apply, but few families are excluded because of the generous limits.

In Maine, many homebuyers were directly affected by the closing of Brunswick Naval Air Station. Buyers living in the 16 communities that were the most directly affected may be able to get a low, fixed-rate mortgage through the Midcoast Redevelopment Mortgage.

For those who have a low credit rating but wish to purchase a house, traditional lenders often provide only expensive mortgages, if the borrower can get approval at all. In this situation, working through the Federal Housing Administration loan program can help. This program allows buyers who have enough income, rather than a high credit rating, to get a loan with government backing. This makes the loan less of a risk to the lender, making it easier to get approved even with low credit.

If you are facing foreclosure, Maine offers help through provisions in a law entitled “An Act to Preserve Home Ownership and Stabilize the Economy by Preventing Unnecessary Foreclosures.” Those facing foreclosure may choose government mediation to assist in pursuing all alternatives with the lender. To get foreclosure help, start by calling the Foreclosure Prevention Hotline at 888-664-2569.

Maine Government Assistance Programs

Maine does not offer any other specific programs to help consumers who are in debt. Some low income families or individuals can help their situation by applying for public aid. Otherwise, working with reputable Maine credit counselors and utilizing the state’s generous mortgage assistance options are the best choices when dealing with debt.