Kentucky is a fascinating state with a rich history and culture as well as incredible scenic beauty. Originally established as a state in 1792, it was the first state on the western frontier of the United States. More than that, it is the birthplace of Abraham Lincoln and Jefferson Davis, and it also is famous for the Kentucky Derby as well as Kentucky Fried Chicken.
Residents in Kentucky enjoy a high rate of home ownership. More than 70 percent of residents own their own home. With this in mind, you may think that many local residents are financially secure. However, credit card debt in the state is more than $1000 higher than the national average. The average Kentuckian has $6,221 in credit card debt. Furthermore, the state’s unemployment rate is eight percent, which is significantly higher than the national average. More than that, the median household income in Kentucky is less than $40,100 per year. Given that the average home has two to three residents in it, you can see that this is a very low amount of money to support a household comfortably. The U.S. Census Bureau reports that the average monthly mortgage payment for homeowners in Kentucky is $1,112, and renters pay on average $675 per month. With such a low household income level and high housing costs, paying monthly debt payments can be burdensome for some and impossible for others. While your situation may seem bleak, rest assured that debt relief may be available for you.
Exploring Debt Relief Options in Kentucky
If you are looking for debt relief options in Kentucky, you are not alone. The reality is that debt challenges are common, and the good news is that there are several debt relief options available for residents to consider. These include debt consolidation, debt settlement and bankruptcy. Debt consolidation typically requires you to apply for a new loan that can be used for consolidation. It may provide lower monthly payments and faster debt reduction, but you typically must have a good credit score to qualify for a consolidation loan. If your credit rating is already damaged, such as if you have fallen behind on your credit card payments or have collection accounts, debt settlement may be a better option.
With debt settlement, you contact your individual creditors to request a reduction in the total amount owed. If your creditors agree to a settlement, you will enjoy immediately lower monthly debt payments and a large portion of your debt written off. This means that it will take less time to become debt-free. Generally, debt settlement is considered by Kentucky residents before filing for bankruptcy. It has been effective at preventing many people from having to take the drastic step of filing for bankruptcy.
Because debt settlement is not always effective, it is best to work with a skilled debt negotiator for assistance. A debt negotiator has experience with settlement and can use proven strategies in your favor to produce superior results. Debt settlement is most effective with reducing credit card debt and medical bills, and it may also be effective with some types of student loans. It is not effective for secured loans, such as home mortgages and car loans. It also is not effective for government-backed student loans.
What Kentucky Law Says About Debt Collection
Some people who are considering debt settlement may not actually need to take this step. In Kentucky, the state has established a statute of limitations on debtors. For credit cards in Kentucky, the statute of limitations is five years. This means that the credit card company has up to five years to sue you for damages after you have gone past due on the account. If you are close to this period of time being up, debt settlement may not be needed. However, if you are still several months or years from reaching this point or are concerned about the potential of being taken to court over your debts, settling your debts may be a great option to consider.
You should also be aware that debt collection agencies in Kentucky cannot charge more than eight percent interest while attempting to collect on a debt. More than that, they also can only garnish up to 25 percent of your wages if they take you to court and win their case.
Debt is problematic for many in Kentucky, and credit card debt is unfortunately one of the most challenging types of debts to get rid of. This is because it usually has a revolving term and a high interest rate. If you are unable to make your minimum monthly debt payments in Kentucky and are looking for a reasonable way to improve your financial situation, debt settlement may be a good option to consider. Speak with a debt counselor today about your options to better determine if this is the method you want to use for debt relief.