Michigan Debt Consolidation

Debt Help In Michigan

Whether you have debt collectors knocking on the door or are just starting to face your first financial crisis, Michigan offers programs and support services that can help you learn to deal with your debt effectively.

Michigan Credit Counseling and Debt Consolidation

Often all someone needs to get on the right track with their finances is a little help. A Michigan credit counseling agency can provide that help. They can help consumers learn how to better manage their money through proper budgeting and debt repayment planning.

The state of Michigan offers a list of licensed credit counselors at http://www.michigan.gov. Start looking for a company with this list. Visit the Justice Department’s website to see a list of those credit counselors who are approved to work with bankruptcy cases. Both of these resources will show you fairly reputable agencies to work with.

As you choose your credit counselor, be prepared to consider debt consolidation as an option for dealing with your debt. To benefit from debt consolidation, you need to find a loan that has a lower interest rate than the rate you are currently paying for your debts. Once you have rolled all of your debt into this new loan, stop adding to it. Cut up the credit cards and throw away the access to your lines of credit so that you do not make your credit situation worse.

Michigan Debt Relief Programs

If the support and services offered by a credit counselor do not offer sufficient help in searching for relief from debt, consider talking to a debt relief agency. Michigan debt relief agencies offer solutions for consumers that need a little more assistance. These companies will step in and negotiate with creditors, take over sending in debt payments, and basically serve as a go-between for the consumer and the creditor. Often they can arrange lower payment terms and debt settlements. These are steps most consumers can take for themselves, but for those who greatly lack negotiating skills, this can be invaluable.

One problem with Michigan debt relief programs is the large number of unscrupulous companies who wish to prey upon those in financial distress. Debt relief services cost money, but make sure that you are not paying far more than is fair for these services. Use the Better Business Bureau to research companies before you sign up for help. You need to be sure that you will be getting your money’s worth.

Michigan Debt Collection Laws

Like most states, Michigan follows a set of federal laws called the Fair Debt Collection Practices Act. These laws dictate the actions debt collectors can take to collect debts for their clients. If you are getting calls, letters, or visits from a debt collector, you need to understand these provisions.

According to the FDCPA, certain actions are prohibited. These include:

• Calling at unreasonable hours. The law states that in most situations, reasonable hours are between 8:00 a.m. and 9:00 p.m. in the debtor’s time zone.
• Calling third parties repeatedly. Debt collectors may call third parties to try to get contact information, but they may not do so over and over.
• Actions that have the intent to harm the debtor’s reputation or make the debt public knowledge.
• Calling the debtor at work if this is prohibited by the employer.
• Calling a debtor once informed that an attorney is representing the individual. In this situation, the debt collector must talk to the attorney.
• Using foul, harassing, profane, or threatening language.
• Communicating with a postcard.
• Intentionally misleading the debtor.

Debt collectors must clearly present the debt to the debtor. In other words, the debt collector must send a letter stating who the creditor is, when the debt occurred, and what the debtor can do to question the debt. Debt collectors also must identify themselves when speaking with you. They are allowed to contact you via letter, phone call, personal visit, email, fax, or telegram. They are also allowed to contact friends, family, and coworkers to try to get your address or phone number.

State laws also require debt collectors to provide the debtor with receipts for any payments if the debtor asks for them. Michigan also places some stipulations on the original creditor. Under the state’s laws, original creditors must comply with the provisions of the FDCPA, with the exception of any dealing with disclosures.

Michigan’s debt law protects 60 percent of a consumers weekly wages, plus an additional $2 per week for non-spouse dependents. This state law is superseded by the federal minimum of 75 percent. The statute of limitations for debts in Michigan is six years, with the exception of open accounts, like credit cards. Open accounts have a statute of limitations of three years. If a creditor is going to pursue legal action, they must do so within this time frame.

Michigan Mortgage Assistance

The Michigan State Housing Development Authority offers a variety of resources to homeowners and homebuyers to make their mortgages secure and affordable. Those in the market to buy a home may be able to get a home loan through the Housing Development Authority’s purchasing programs. These include programs designed for those with poor credit ratings.

One of the state’s most innovative mortgage programs is the Graduate Purchase Assistance. Anyone who has graduated college within the last three years with an associate’s degree or higher can get a reduced interest rate on their mortgage by applying through the MSHDA. These loans have a loan to value ratio of 80 percent.

The MSHDA also has a down payment assistance program, which offers a zero-interest, non-amortizing loan with no monthly payments for up to $7,500. This money can be used to pay the closing costs and assist in funding the down payment for a home purchase for low to moderate income buyers. Income limits are in place, and the program is not available for homes priced higher than $224,500.

In response to a recent rise in foreclosures in Michigan, the state began the Save the Dream program. This program connects homeowners with housing counselors to help them explore their options when it comes to avoiding foreclosure. Help is available online through Michigan.gov or by calling 866-946-7432.

Michigan Government Assistance Programs

The does not offer state-specific debt assistance programs. However, the governor’s office warns consumers against working with any unlicensed companies offering debt relief services. Often, these companies end up saving the consumer little money and offering no protection from creditor legal action.