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How to Get Debt Relief in Alaska

Dena Standley | July 22, 2022

You when you beat Enhanced Recovery Company ^^

Summary: If you're struggling with debt in Alaska, SoloSuit can help you find the relief you need.

If you're fighting to reduce or pay off your unsecured debt in Alaska, you are not alone. Alaskans have the highest credit card debt per cardholder in the nation as of May 2022. The average is over $8,000, which is way above the country's average of $6,194 during the same time.

Whether it's the loss of a job, divorce, health issues, or poor financial management that got you into serious debt, there's help available. Though it can be a difficult journey, financial recovery is possible. Learn about the following options to see which one best suits you.

  • Debt consolidation loan or credit card balance transfer
  • Debt management plans for Alaskans
  • Debt forgiveness
  • Debt settlement strategies
  • Filing for bankruptcy

Here's how each debt relief option works.

Use a debt consolidation loan or credit card balance transfer

Debt consolidation means putting all your debts into one place. It should work to relieve some debt if the new interest rate is lower than what you are currently paying.

Suppose that you have three credit cards with balances of $5,000, $3,000, and $2,000, respectively. You would need to take out a loan for $10,000 to pay off all those accounts. If the interest on the new loan is lower, you will save some money in the long run. The types of loans you can use to consolidate debt include:

  • 401(k) withdrawals
  • Personal loans
  • Home equity loans

You can also opt for a new credit card that lets you transfer all the previous balances. In that case, you would hope to take advantage of introductory offers such as 0% APRs on transfers for 21 (could be more or less) months and 0% APR on purchases for 12 months, etc.

Both the loans and balance transfers have bright and dark sides, as summarized in the table below:

Loans and balance transfers

Advantages

Disadvantages

One monthly repayment

The debt does not go away

Lower interest rate

Competitive interest rates are hard to get if you have bad credit

It is easier to keep track of one account instead of several

It's easy to accumulate more debt on the paid accounts

Using debt to pay off debt can be addictive



Based on the above, debt consolidation will work for you if:

  • Your credit score is good, or you have a cosigner
  • You are disciplined enough to avoid piling more debt on your credit cards
  • You want a more straightforward way to manage your accounts

If that's not you, maybe a debt management plan can work.

Consult with a nonprofit debt counseling organization

There are many nonprofit debt counseling organizations in Alaska. The Department of Justice provides a list of credit counseling organizations in Alaska. You can narrow your search by using the taskbar to sort by “nonprofit.” Keep in mind that only brings up agencies with the word “nonprofit” in their name. Many nonprofits may not have that word in their business name.

Just be sure you are working with a reputable debt relief provider by checking the Fair Trade Commission's website for banned individuals and companies.

Debt counselors can help you get out of debt by creating a debt management plan that works for you. They analyze your income and debts to help you budget for ongoing expenses and debt repayments. They can even get some of your creditors to reduce interest rates or waive fees.

Such a plan can last between 3-5 years, depending on your situation. They may require that you don't use your credit cards or open new credit lines during this period. Learning not to borrow can be challenging, but you will pay off your debts and start building your credit again if you stick it out.

You are likely to succeed with a debt management plan if:

  • You are willing to forego using credit for as long as the program takes
  • You are ready to live on a tighter budget
  • You want to get out of debt no matter how bumpy the ride gets

Debt management plans can be done on your own with a bit of work. You can contact your creditors directly and reach agreements about paying back the debt. With a little luck, you may be able to negotiate a lower interest rate or the waiving of fees. There are circumstances where you can ask for debt forgiveness.

Asking for debt forgiveness in Alaska

When you agree with a creditor, they honor their end of the bargain by giving you access to money, so it's only fair that you do your part and pay up.

However, sometimes you go through challenging situations out of your control. Bad health is an unforeseen problem that can quickly clean your savings account.

Asking for debt forgiveness can seem like a long shot, but it's worth trying. Even though the creditor is under no obligation to forgive the debt, they know how difficult life can be. They may be willing to listen. And even if they only partially forgive the debt, that can provide some relief as you go through a difficult time.

Just remember that if a creditor forgives a large amount of debt, you may need to pay tax on the discounted amount.

Debt forgiveness is an option if:

  • You are in a hardship situation.
  • You are willing to discuss personal matters with creditors.
  • You have always paid on time until the hardship.

Another alternative can be debt settlement

Debt settlement strategies

When a debtor lets you settle, they report it to the credit reporting bureaus. Settling affects your credit for some time. However, the advantage is that you remain debt-free and can always rebuild your score in the future.

Here are two ways you can negotiate debt settlement:

1. Negotiate a debt settlement offer on your own

You approach your creditors and offer to pay them a fraction of the total amount because you can't afford to pay in full. You could end up settling for 50% or less of the original amount owed. DIY settlement works if the debtor can see a possibility of not getting any money if you decide to file for bankruptcy. If you are drowning, take your chances.

To learn more about how to negotiate your own debt settlement, check out this video:

How debt settlement affects your credit score and taxes

2. Use debt relief companies to negotiate a settlement

If you don't trust your negotiation skills or have no idea where to start, you can hire a debt relief agency. These guys charge a percentage of the forgiven amount to talk with your creditors. As with debt forgiveness, settling debt can result in unexpected tax implications.

Choose debt settlement if you:

  • Are already late or are willing to let your accounts go delinquent so the creditor can accept a settlement
  • Don't mind paying taxes on the forgiven amount
  • Trust your negotiation skills or have money to pay for assistance
  • Can deal with the stain of a settled account on your credit report

Alaska has a three-year statute of limitations on credit card debt. That's a short period compared to six or seven years in some states. You can wait for the time to expire, or you may want to file for bankruptcy. Before you file, be sure to understand whether Chapter 7 or Chapter 13 is the best one for you.

Sometimes finding debt relief involves fighting debt collectors in court. That, too, is doable with the help of SoloSuit's legal services.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


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