Debt and Debt Collection

Special report from the Center for Responsible Lending, June 2023 The national Center for Responsible Lending (CRL) reports that single-payment and payday installment loans in 31 states drain more than $2.2 billion in fees per year from borrowers whose average incomes are approximately $25,000 a year. Car-title loans drain more than $700 million annually from borrowers in 17 states. Together these predatory loans drain almost $3 billion annually from those families who can least afford it.  

  Rule #1: Prioritize Debts Whose Non-Payment Immediately Harms Your Family Non-payment of certain debts have sudden and dire consequences for your family. Deal with these debts immediately—either pay these debts first or otherwise follow advice here on how to manage these debts. Never pay smaller, low priority debts just because you cannot keep up with high priority debts—“If I can’t pay my mortgage, at least I will keep up with my credit cards.” This is a bad idea.

Check out two videos to help you know your rights in debt collection and also how to deal with debt collectors. The links are here:

Article by Paul Shipp of Kansas Legal Services The number of Payday lenders has grown at an oddly rapid rate over the past few decades, mainly in low income areas. Typically these lenders market directly to low income borrowers, notably those on a steady, fixed, and certain income. Borrowers are often at or below the poverty level; many live off only fixed incomes and are elderly or disabled.

This client-focused handout contains information and tips about how to handle a call from a collector or someone collecting a debt on another's behalf. Here are two helpful videos on dealing with debt collection, and how to talk with a debt collector.  

The Fair Debt Collections Practices Act is a federal law that requires collection agencies to stop contacting you if you send them a letter stating that you wish to stop contact.  Complete the interview in the link below to create this letter.  Stop Contact Letter Interview Creditors still have the option of pursuing legal action against you.  This will not make your debt go away. 

Your credit score is a tool businesses use to measure your creditworthiness - how likely it is that you will repay a loan.  Equifax, Experian and Transunion each compile a report of your credit  history to determine your credit score.  Occassionally, there will be errors in your credit history that will adversely effect your credit score and your ability to borrow money. 

Housing & Credit Counseling Inc.(HCCI)  is available in person at Topeka, Lawrence, Manhattan and Emporia office locations.

This brochure talks about your options as a consumer when debt or debt collection becomes too much to handle. Nearly all of the 2 to 3% of the households who are behind on their bills were current until they faced a sudden blow to their wallets. Such blows include job loss, illness or other setbacks. Sometimes it is tempting to give in to the daily appeals in their mailbox to borrow, borrow, borrow. To help consumers, the feds and states have laws to stop abuse, deceit and unfair practices by debt collectors. Find out more in the brochure below.

Bankruptcy is a choice that may help if you are facing serious financial problems. You may be able to cancel your debts, stop collection calls, and get a fresh financial start. Bankruptcy can help with some financial problems, but does not guarantee you will avoid financial problems in the future. If you choose bankruptcy, you should take advantage of the fresh start it offers and then make careful decisions about future borrowing and credit, so you won’t ever need to file bankruptcy again!