Washington Debt Consolidation

Debt Help in Washington

Washington residents who find themselves struggling with overwhelming debt have several resources they can turn to for help. Whether you face staggering medical bills or are drowning in credit card debt, consider these resources.

Washington Credit Counseling and Debt Consolidation

One way to deal with overwhelming debt is to turn to the services of a credit counseling firm. Credit counselors will help you learn to budget, manage your money, and pay down your debt systematically until it is all gone. When you have proper budgeting in place, you are better able to carve out the money to pay down your debt and stop adding to it.

If you think a Washington credit counselor could be the solution to your family’s debt problems, you need to find a reputable company. Not all credit counselors offer the same measure of service and support. One place to start your search is with the Justice Department. They approve companies to work with bankruptcy cases. The companies approved to work in Washington are listed at http://www.justice.gov. You do not need to be headed to bankruptcy to benefit from their services. Simply knowing that they have federal approval gives you peace of mind as you partner with them to work on your debt problem.

As you talk to your credit counselor, be sure to discuss debt consolidation options. Debt consolidation loans lump all of your debt into one debt product, thus giving you just one bill to manage. If you choose to consolidate, look for a loan with a lower interest rate than what you are currently paying for your debts.

Washington Debt Relief Programs

You may find additional debt relief programs as you search for debt help in Washington. If you do, proceed with caution. Some debt relief or debt management firms will help negotiate with your creditors to get you a debt settlement or more favorable terms. This can be helpful, although it is something you can do entirely on your own, but debt relief programs charge significant amounts for their services, and sometimes are not clear in the way they charge their fees. Make sure you choose a company that is upfront and clear about all costs involved with their program.

Washington Debt Collection Laws

In addition to its own laws regarding debt collection, Washington follows the Fair Debt Collection Practices Act, a federal law outlining what debt collectors can and cannot do. Under these two laws, debt collectors:

• Cannot contact you in writing or over the phone more than three times per week.
• Cannot call you at work more than once a week, and must not call at work if this is not allowed by your employer.
• Must call between 8:00 a.m. and 9:00 p.m.
• Cannot use harassing, threatening, vulgar, profane, or offensive language.
• Cannot try to intimidate or embarrass you.
• Cannot threaten violence or criminal prosecution.
• May contact other people, but only to get your contact information, not to tell them that you owe money, and can only contact an individual once in most situations.
• Must only contact your lawyer if you have one.

In addition, the collection agency cannot:

• Publish your name on a list of people who owe money.
• Send agents dressed like government or law enforcement officials.
• Send letters that seem like they come from a government agency.
• Make collect calls.
• Garnish your wages or possessions without a court judgment.

When a collection agency contacts you, they must follow up their initial contact with a written letter that states the amount of the debt, any fees added to it, and your rights to dispute the information. If you wish to dispute, do so in writing. The collection agency will have to verify the debt.

If you no longer wish the collection agency to call or visit, you can stop the contact by sending a letter via certified mail asking them to stop. Under the current state and federal laws, they must stop. You still have to pay the debt you owe, though.

Collection agencies can charge interest for their services, and Washington allows them to charge up to 12 percent. If your wages will be garnished, current law protects 75 percent of your weekly earnings or 40 times the federal hourly minimum wage, whichever is greater.

You may be sued for your back debts. If your creditors wish to sue you, they must do so within the time frame set out in the statute of limitations. The statute of limitations for debts in Washington is as follows:

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

Washington Mortgage Assistance

If you are looking to buy a home, start the process by looking into the Washington Housing Finance Commission. Here you will find a variety of loan options designed to help you get a home. The state’s House Key State Bond Loan offers affordable rates for those with a credit score of 680 or higher. Down payment assistance through the House Key Plus loan provides money in the form of a second mortgage that buyers use to pay the closing costs and down payment on their home loan purchase. This can be the key to a first time buyer actually getting into a home, as these expenses sometimes prohibit them from purchasing. Other programs include loans for those purchasing in targeted development areas and the Mortgage Credit Certificate program. Learn more about all of these loan options at www.wshfc.org.

If you have low credit, consider applying for the FHA or the USDA loan program. Both of these offer loans based more on repayment ability than credit score. If you are facing foreclosure, the Washington Homeownership Program can help with education and support. Call them at 877-894-HOME or visit www.homeownership.wa.gov.

Washington Debt Assistance Programs

The state of Washington does not offer any further debt assistance programs. If you need debt help, start with these to see what help is available.