Although Alabama is known for having large populations of families below the poverty line, Alabamans’ average credit card debt is just $4817, which is lower than the nationwide average credit card debt of $5235 per borrower. The state also ranks better in terms of home ownership at 73.2% versus the nation’s average home ownership of 65%.
Having confidence in your debt relief goals can mean the difference between avoiding the phone and being able to confidently go to your mailbox knowing that no threatening late notices will be waiting. For the Alabama debt help that you need to reclaim your financial life, you first need to understand your rights and responsibilities under Alabama debt consolidation and protection laws.
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Three driving factors are pushing Americans towards the highest consumer debt in the nation’s history. Auto loans, college loans, and credit card use has pushed U.S. households towards nearly $13 trillion in debt as of 2017. Indeed, as debts increase and expenses rise, many of us turn to our credit cards to fulfill immediate shortfalls, and before long we find ourselves in a deep financial hole before we are fully aware of the danger.
Understanding your rights and responsibilities regarding your creditors begins with knowing the statutes of limitations on your account. Although it varies state by state, the statute of limitations is a specific limitation on the time in which creditors can file legal action against you for past due debts. In Alabama, the statutes of limitations on outstanding debts are:
If you are trying to get out of debt and aren’t sure where to turn, you need to discuss the range of debt management options available to you. Our team of financial experts is standing by to help you with the Alabama debt relief that you need to get back on your feet.
Debt relief can come in numerous ways for Alabama state residents. Aside from government debt help, the most common types of debt relief an individual can pursue are debt settlement programs and consolidation loans. Other ways to seek debt relief include debt counseling and as a last resort bankruptcy.
Alabama residents can choose from a variety of debt relief programs. The most common debt relief options in Alabama include:
Debt settlement is a process where debt is negotiated for less than the amount owed. This can be done by the debtor or a company on behalf of the debtor.
Credit Counseling, sometimes known as, Debt Management, is a process where a lower interest rate and monthly payment is negotiated but the full amount of debt is repaid. This is usually debt through a non-profit credit counseling agency.
Debt consolidation is a process where a loan is taken out with a lower interest rate than what the debtor is currently paying. This is done through a bank or other lender. To qualify for a personal loan, a good credit rating is usually required.
Many people think bankruptcy is the fastest and easiest way to escape an overwhelming debt hardship. However, bankruptcy costs like lawyer and courts fees can quickly add up. Bankruptcy should be a last resort effort after all other debt relief options have been explored.
Different debt relief programs will affect your credit in different ways. Debt settlement will drop your score temporarily because you need to close credit card accounts in order to negotiate with creditors. Credit counseling will have little to no effect on your score as your accounts remain open as you negotiate lower interest rates (not overall debt). Debt consolidation can have some effect on your score depending on the accounts you close during the consolidation process.
Every debt relief company is different and some are more trustworthy than others. It’s best to read real customer reviews and also learn what type of fees they charge before agreeing to a debt relief program.
Whether or not a Alamba debt relief program is a good idea depends on a few factors. Not all companies offering debt relief programs are legit, so you’ll have to research their credentials before signing up for a program. Legitimate companies will have proper accreditations and usually good customer reviews.
Be sure to compare what Alabama debt relief companies have to offer before doing business with them. Any company demanding upfront fees should raise a red flag so be cautious moving forward.
It depends on what type of program you’re enrolled in. Most programs offered through companies and non-profit organizations do allow you to cancel. However, some if not all of the process you made during the program might be forfeited in the process. It’s best to contact the institution you’re working with directly to see what affects canceling your program might have.
Debt collection is when a person fails to pay their credit card debts in the state of Alabama – credit card companies and/or banks will eventually close the account(s) after several months of non-received payments. At this point the bank may turn the account over to a debt collection agency to try to recoup the debts owed.
The State of Alabama functions under the Fair Debt Collections Practices Act (FDCPA) enforced by the FTC. In addition, they have their state law, the Ala. Code §40-12-80, that debt collectors must abide by. It says collectors should file for a special license that will allow them to collect debts from consumers. This includes payment of a license tax based on where they practice their business. “Debt collectors”, as specified under this law is based on the definition provided by the FDCPA.
Any debtor or consumer who feels that the creditor and/or collection agency is not following the law can file a complaint. They can contact the Alabama State Attorney General through the Consumer Affairs Division (334) 242-7300 or (800) 392-5658.
In Alabama, the statute of limitations provided under Code Section 6-2-34 is six (6) years. An action must be taken within three (3) years for an open account or unliquidated account. After this period of time has expired without the creditor taking legal action, they will no longer be able to file a legal claim in an attempt to collect the debt.
Debt collectors must follow Alabama Code §40-12-80 which forces debt collections to obtain a special license to try to recoup debt from consumers. Debt collection policies operate under the Fair Debt Collections Practices Act that is enforced by the FTC.
If you feel like a debt collector is acting outside the legal limitations set up with the Fair Debt Collections Practices Act, you can file a complaint against the agency or creditor by contacting the Alabama State Attorney General’s office.
Depending on the type of debt relief program a creditor chooses will determine the affect on their credit score.
For instance, debt management plans work with creditors usually through credit counselors to pay back debt in full which helps preserve a good credit score.
While bankruptcies will have a devastating affect on a credit score and will take many years to recover.
Debt Settlement plans work by negotiating a lower payback amount with the creditor. Through this process all accounts are closed with the creditor which will have a negative affect on a credit rating but once the plan is completed, credit scores can improve quickly as credit is rebuilt.
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