Struggling with debt? You have options.

 

We recommend you first meet with a credit counselor to determine which course of action is best for you. There may be help available from an attorney, a debt management company or a debt settlement company.

 


 

Debt Management

When you work with a debt management company, you make one monthly payment to the debt management company instead of multiple payments to each creditor. The debt management company then makes payments to your creditors on your behalf. Debt management companies offer a variety of financial education programs and may be able to obtain other benefits from your creditors such as lower interest rates, lower monthly payments or having your account marked as current.

It can take several years to completely pay off your debt under a debt management plan. During that time, you may be required to close all open credit accounts and not open any new ones. You will generally have to pay a monthly fee to cover the debt management company’s services.

Any company that offers consumer debt management plans to Montana residents must be licensed by the Office of Consumer Protection. This license does not mean the Office of Consumer Protection endorses, supports or recommends any debt management company. It simply means the company has met the minimum legal requirements to do business in Montana.

If you are aware of a debt management company that is operating in Montana but is not on the list of licensed debt management companies, please call the Office of Consumer Protection at (406) 444-4500 or (800) 481-6896 and report it immediately.

Search for Licensed Debt Management Companies


Debt Settlement (Debt Negotiation)

Debt settlement is a way to decrease debt.  The debtor and the creditor agree upon a reduced balance that is considered payment in full. Consumers can arrange their own settlements by using advice found on this and other websites. You can also hire an attorney to act on your behalf or you can use a debt settlement company. You should be aware that no matter which method you use, you may have to pay more in taxes on your next tax return as a result of negotiating a lowered debt balance. Some debts forgiven are considered reportable income under the Internal Revenue Code.

There are other risks associated with debt settlement companies. If you have stopped paying down the balance on your debts, even if on the advice of your debt settlement provider, the following could occur:

• Your credit report may contain damaging information
• You may have difficulty obtaining credit in the future
• Your creditors may sue you in court and you may be responsible for any legal fees you accrue
• Your wages may be garnished

Debt settlement companies operating in Montana are regulated by the Department of Justice and are required to register with the Office of Consumer Protection. A registered debt settlement company is not supported or recommended by the Office of Consumer Protection.  It simply means the company has met the minimum legal requirements to provide debt settlement services to Montana residents. If you choose to work with a debt settlement company, it is critical that you read and understand the entire contract before signing.

If you are aware of a debt settlement company that is operating in Montana but is not on the list of registered debt settlement companies, please call the Office of Consumer Protection at (406) 444-4500 or (800) 481-6896 and report it immediately.


Additional Resources:

Annualcreditreport.com
You are entitled to a free copy of your credit report every 12 months.  Check to see that all information is correct and up-to-date.

Federal Trade Commission
FTC Facts for Consumers: Coping with Debt
Fiscal Fitness: Choosing a Credit Counselor

Pre-Bankruptcy Credit Counseling
Some credit counseling services provide pre-bankruptcy credit counseling. This kind of credit counseling is usually required in order to file for bankruptcy. Agencies that provide this service are licensed by the United States Department of Justice. A list of licensed credit counseling agencies is available here.


Contact

Office of Consumer Protection
P.O. Box 200151
Helena, MT 59620-0151
Phone:  800-481-6896 or 406-444-4500
Fax:  406-442-2174
E-mail: [email protected]