Debt consolidation in West Virginia is an essential problem-solver for many families there. From the challenges of unemployment to the fluctuations of the real estate market, debt affects every household differently.
As one of the most mountainous states in the country, it’s no surprise that residents of tree-covered West Virginia often refer to their home as the “Mountain State”. What may be less well-known is that this nickname also refers to the state’s location in the heart of the Appalachian Mountains.
There are various relief programs and options available within the state for those struggling with overwhelming debt. This article will provide an overview of some of these initiatives.
Debt levels in West Virginia are some of the lowest in the US. On average, residents have less credit card debt, student loan, and mortgage debt than people in other states. Even so, many people in WV still need help dealing with their debts.
West Virginia Credit Card Debt Stats
Debt is a serious problem for many people in West Virginia. These statistics show what average borrowers are facing when it comes to household debt:
- Average credit card debt per household: $7,090
- Average available credit limit: $11,786
- Credit utilization ratio (debt vs. available limit): 36.03%
- The average number of cards is 2.76
- % of delinquent accounts (at least 90 days past due): 8.11%
- Average credit score: 658
- The most popular type of credit card is: Balance transfer
Options For Debt Relief In West Virginia
There is no need to feel overwhelmed by personal debt. Some strategies can be implemented to help you become debt-free. With time and effort, it is possible to restructure your finances so that all of your debts can be paid off. Here are some options to get you on the path to financial freedom.
Debt Consolidation
Debt relief involves combining all of your outstanding debts into one package. This is typically done by taking out a new loan to pay off your outstanding balances.
There are many potential benefits of doing debt relief in West Virginia. One of the main advantages is that you may be able to reduce your interest payments. For example, you owe four credit card companies $10,000 in cumulative debt. With an average interest rate of 18%, you would pay $1,800 in interest charges your first year. But, by consolidating that debt into a personal loan with an 8% interest rate, you could save $1,000 per year in interest.
Of course, it can be more difficult to qualify for consolidation loans – especially at a decent interest rate – when you have already fallen behind on your payments or triggered delinquency. So it’s best to be proactive and move toward consolidation before reaching the point where you can’t make your payments.
Refinancing
Debt refinancing is taking out a new loan to pay off existing debt. This can be done to secure a lower interest rate, change the repayment schedule, or consolidate multiple debts into one payment. Refinancing can be a good way to reduce your monthly payments or the total amount of interest you pay on your debt.
By reducing your interest rate, you can lower your monthly payments and reduce the total amount of interest you pay over the life of the loan. For example, let’s say you have $20,000 left to pay on your car loan with an interest rate of 4%. Your monthly payment would be $452.
Refinancing could be a great way to reduce your interest burden and free up cash flow when it comes to your home mortgage. With mortgage rates being so competitive, many lenders offer enticing rate structures and programs to get you to refinance. However, before moving, do the math to see that the new terms are affordable and will fit your needs.
Balance Transfer Cards
A balance transfer card is one way to help keep it under control. Many credit cards offer 0% interest rates for an introductory period, which can entice you to transfer your balance to the new card. However, you need good credit to qualify for the new card, which might not be possible if you’re already buried in debt.
The best way to get a credit card with a lower credit score may be to look for companies that offer pre-approved offers in the mail. These companies have usually done some screening of applicants beforehand, so you may have a better chance of being approved.
Remember that your promotional interest rate will eventually end. Typically, this is after 12 to 21 months. Check what the normal rate will be after the introductory period. This can help you avoid getting deeper into debt if you can’t pay off the card. Also, take note of any fees attached to your balance transfer. In many cases, you’ll have to pay at least 3% to 5% on the amount transferred.
Bankruptcy
Bankruptcy is not always the best option, but it may be the only way for some people. Bankruptcy can offer a legal means to reduce or eliminate certain debts.
Chapter 7 is a “liquidation” bankruptcy because you may have to surrender some property to satisfy your debts. Chapter 13 bankruptcy, also called a “wage earner’s plan,” ultimately grants you a discharge of your debts, but you’ll have to pay some or all of them back along the way.
In bankruptcy, Chapter 7 and Chapter 13 are two very different repayment plans. In West Virginia, choosing which chapter to file for is not always up to you. A means test will be required to determine your ability to pay back some or all of your debts. A high income may mean you are pushed into a Chapter 13 plan. Those with little income or assets may be eligible for Chapter 7.
Statute Of Limitations In West Virginia
There is no time limit for pursuing legal action. Creditors can take you to court to collect outstanding debts at any time. The statute of limitations varies from state to state and is also affected by the type of debt, as outlined in the chart below.
| Mortgage Debt | 10 years |
| Medical Debt | 10 years |
| Credit Card | 10 years |
| State Tax Debt | 5 years |
| Auto Loan Debt | 4 years |
Old debts can still haunt you even after the statute of limitations has passed. Just because a creditor can’t take you to court doesn’t mean you’re off the hook. The Federal Trade Commission says that creditors can still contact you about time-barred debt and try to collect it, even though they legally can’t force you to pay up.
West Virginia’s debt statutes of limitations are relatively long. For example, in California, the statute of limitations for credit card debt is only four years. This means collectors have ten full years to file a lawsuit in West Virginia. Waiting for the statute of limitations to expire is not a good debt relief strategy, especially in West Virginia.
Final Thoughts
No one likes to find themselves in debt, but it can happen to anyone. Fortunately, there are ways to get out of debt, even in West Virginia. State and federal laws provide consumers with various protections against overzealous creditors, but it’s best to try and get a handle on your debt before it gets to that level. Balance transfers, refinancing, and negotiations with creditors are all possible options that can help improve your situation.
Of course, sometimes, falling behind on debt is unavoidable. In those cases, you can talk to debt counselors, negotiate with creditors, or consolidate your debts. And as a last resort, you can consider filing for bankruptcy. However, before making any decisions, you may wish to speak with an attorney specializing in debt relief.
