Montana Debt Consolidation

Debt Help In Montana

Montana residents who find themselves struggling with overwhelming debt often think that foreclosure and bankruptcy are their only options. The truth is that Montana offers several debt help services that can assist those who find debt to be overwhelming get the help they need. Whether through state-based aid programs or connecting debtors with credit counseling agencies and other helpful services, the state has the programs that consumers need to get out of debt and stay out.

Montana Credit Counseling and Debt Consolidation

For those who get to the point that they cannot manage their debt on their own, the Montana Department of Justice recommends working with a licensed credit counseling agency. This is typically the first step in the bankruptcy process, but you do not have to file for bankruptcy to benefit from credit counseling.

Credit counseling usually begins with a debt management plan. This written agreement binds the consumer to making regular payments to the credit counseling service. The credit counselor will send the payments to the creditors as outlined in the plan. These companies also provide education and support to the individual struggling with overwhelming debt.

All credit counseling companies must be licensed with the Department of Justice. This indicates that the company has met minimum legal requirements to provide these services in Montana. Do not work with anyone claiming to be a Montana credit counseling service who does not have this license. You can see the companies holding current licenses at http://www.doj.mt.gov/.

One option to consider as you work with a credit counselor is debt consolidation. Debt consolidation takes all of your debts and places them into one loan program. If you can be disciplined enough to stop adding to the debt, consolidating it can help you pay it off faster.

Montana Debt Relief Programs

Most Montana debt relief programs work with licensed credit counseling companies. These relief programs may negotiate with creditors for better rates and terms. They may also work to come to a mutually beneficial agreement for a debt settlement. Use caution with these services, because they often come at a high price. You do not want to be paying more than you should for these services, because in reality they are things you can do yourself.

Montana Debt Collection Laws

The state of Montana does not have specific regulations relating to debt collection. Rather, it follows the Fair Debt Collection Practices Act, a federal law protecting consumers from debt collectors. Under this law, consumers are protected from the following:

• Debt collectors calling before 8:00 a.m. and after 9:00 p.m.
• Debt collectors threatening them, either physically or by threatening their reputation.
• Debt collectors making their debt known through revealing mail correspondence or conversations with third parties.
• Debt collectors repeatedly calling or visiting with the intent to annoy.
• Debt collectors intentionally misleading them.
• Debt collectors calling at work if this is not allowed.

The law gives you the right to request that the actions of debt collectors stop. You can stop the calls and visits by contacting the debt collection agency in writing telling them you want them to stop. If they continue to contact you, they are in violation of the law. They may only contact you to state they will cease contact and to inform you of a change in the situation, such as if you are going to be sued by your creditor. However, you do still have to pay your debt.

The state of Montana has placed in effect a statute of limitations on all forms of debt. The statute of limitations indicates the time frame in which a company must start legal proceedings against a debtor who has not paid what he or she owed. The statute of limitations for debts in Montana is:

• Oral agreements – Five years
• Written contracts – Eight years
• Promissory notes – Eight years
• Open accounts, like credit cards – Three years

The state also limits the amount of interest a debt collection agency can charge. Debt collectors cannot charge more than 10 percent interest. Montana follows the federal wage garnishment guidelines, which protect 75 percent of your weekly earnings or 30 percent of the federal hourly minimum wage, whichever is greater.

Montana Mortgage Assistance

Montana offers several programs to assist homeowners and homebuyers. The Board of Housing Homeownership Program, for instance, offers the Single Family Program to assist those with low to moderate incomes who wish to purchase a home. The program gives buyers, usually first-time buyers, tax-exempt mortgage revenue bonds that provide them with funds to purchase a home below market rates. More information about this program is available from http://housing.mt.gov.

The NeighborWorks Montana program has many loan programs to assist those looking to purchase a home. One popular option is a second mortgage to use for closing cost and down payment assistance. These tend to be geographic-specific offerings. To find out if one is offered in your area, visit http://www.nwmt.org/.

Because much of Montana is rural in nature, the USDA Rural Development program is popular with some homeowners. This program offers assistance in the form of low rate loans to those looking to buy a home or land in a rural area. These loans, known as Section 502 loans, are targeted toward low-income individuals. The loans are 33-year term loans, and money can be used to repair, build, renovate, or relocate a home, in addition to the purchase option.

Federal-backed FHA (Federal Housing Administration) loans work best for those struggling with low credit scores and trying to buy a home. Because of the government backing, these loans have less of a concern with credit score and more of a concern with ability to repay what is owed.

NeighborWorks Montana also offers foreclosure assistance to struggling homeowners. Many are able to save their homes from foreclosure if they call early in the process. To learn more call 866-587-2244.

Montana Debt Assistance Programs

The state of Montana does not have any other programs to help those struggling with debt. Sometimes, however, other relief programs can free up funds to use in debt repayment.