Alabama Debt Relief Program

Debt relief can come in numerous ways for Alabama state residents. Alabama residents have more options for help getting out of debt than filing for chapter 7 or chapter 13. the most common types of debt relief an individual can pursue are debt settlement programs and debt consolidation with a consolidation loan or line of credit. Other ways to seek debt relief include debt counseling, refinance loans, debt management.

Alabama residents can choose from a variety of debt relief programs. The most common debt relief options in Alabama include:

Alabama Debt Settlement / Debt Resolution

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.

Alabama Credit Counseling / Debt Management

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.

Alabama Debt Consolidation Loan / Consolidation LOC in Alabama

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.

Bankruptcy in Alabama

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.

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.

Compare debt relief options

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.

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.