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How to Get Debt Relief in Iowa

George Simons | July 21, 2022

When you get the debt relief you need ^^

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

The impact of the Coronavirus pandemic on Iowa's agricultural industry was severe. In fact, experts estimate the damage inflicted on this sector of the economy within the state to be approximately $6 billion. This likely means tens of thousands of Iowa residents are struggling with unpaid bills and mounting debt obligations.

People living in Iowa who are having a tough time keeping up with monthly payments for credit card bills, student loan bills, auto loans, etc. should not throw their hands up in despair and accept a future of never-ending debt payments. There are options and strategies available to show you how to get debt relief in Iowa.

Utilize these Iowa debt relief programs

As an Iowa resident, you may qualify for state-specific programs designed to help people who are financially stuck. Check out these Iowa debt relief programs to see if you are eligible:

  • Making Home Affordable Program: Offers assistance to homeowners to aid in reducing their monthly mortgage payments and/or obtaining a more affordable mortgage with a lower interest rate.
  • Child Care Assistance Program: Available to parents to help them cover the cost of childcare in Iowa.
  • SafeNetRx Program: One of the largest prescription and over-the-counter drug programs in the United States. With this program, low income residents of Iowa are eligible to receive medication and medical supplies for free or reduce costs. The medicines are prescribed by a pharmacist and distributed to impoverished Iowans who meet certain income requirements.
  • Healthy and Well Kids in Iowa (Hawki): Offers health insurance to children whose parents do not qualify for Medicaid and cannot afford private insurance.
  • Low-Income Home Energy Assistance Program (LIHEAP): Provides one-time payments, made directly to utility or heating vendors, to assist families with the cost of home heating bills.
  • Private Student Loan Relief: Provides a network of financial counselors who link troubled families with trustworthy agencies for financial assistance with private student loans.

Use a debt paydown strategy

In addition to exploring potential eligibility for an Iowa-specific program, consider adopting a strategy that will help you organize and pay down your debt. Some of the most popular and effective debt paydown strategies include the “snowball” strategy, the “avalanche” strategy, and the consolidation loan strategy. If you embrace the snowball strategy, you will start by paying off your smallest debt while simultaneously making minimum payments towards any other debts. When you pay off that first debt, you roll over the payment to the second-smallest debt and so on and so forth.

The “avalanche” paydown strategy is similar, but prioritizes debts with the highest interest rates rather than the balance owed.

For people juggling numerous monthly debts, a consolidation loan may be the best strategy since it can help you streamline your debt obligations into a single monthly payment, which is generally easier to manage than various accounts that all have monthly minimums to meet.

Consider using a debt management program

If you need assistance implementing one or more of the debt relief strategies listed above, it may make sense to consider a debt management program administered by a professional nonprofit credit counseling company.

If you opt for a debt management program, there is a good chance you will work with a credit counseling company who will aid in negotiating your debt with the goal of reducing the interest rates on your debt and the fees being charged. These negotiations can be beneficial and ultimately result in you paying a lower amount each month towards debt servicing.

In addition to helping negotiate a reduction in the interest rates and fees that apply to your debt, a credit counseling company will also offer lessons and guidance to help strengthen your financial planning skills. These skills include effectively developing a monthly budget, managing and tracking your spending, monitoring your credit, and sticking with long-term financial goals.

Hire a debt settlement company

Along with debt management programs, some people may find value in hiring a the debt settlement company. You may be asking yourself, “what the heck is a debt settlement company?” Well, they are corporate entities specializing in negotiating with creditors with the goal of getting a creditor to accept less than the full amount owed on a debt.

Before going down this path, please be advised that there are serious potential pitfalls associated with some of the tactics used by certain debt settlement companies. This is why you need to do your research and ensure you select a reputable debt settlement company that adheres to practices that will not do further harm to your financial future.

What happens if you hire a debt settlement company

If you hire a debt settlement company as a way to get debt relief, expect to be told to stop making payments towards your debt. Once you halt all payments, the debt settlement company will conceivably step in and negotiate with your creditors on your behalf.

If this strategy sounds risky, that's because it is. For example, when you stop paying your monthly debt obligations, many creditors will turn your accounts over to debt collection agencies. They could also report the non-payments to the “big three” credit bureaus, which could lead to a significant drop in your credit score. If that was not bad enough, the hit to your credit report will not go away in a few weeks. In fact, unpaid debts can remain on your credit report for up to seven years.

Another factor to consider is that, the difference between the settlement amount and the total dent amount will be considered taxable income. The difference is called “cancelled debt.” So you will probably be taxed for your debt settlement agreement.

All that being said, debt settlement is still a great way to find debt relief because many creditors and debt collectors will settle for anywhere between 1%-70% of the original amount you owe. So, you can save a lot of money and stress by negotiating a settlement.

Iowa debt collection laws can protect you

Luckily, Iowa has laws in place to protect consumers from abusive debt collection practices. One of the most important laws to know about is Iowa's statute of limitations on debt. The statute of limitations is the time period that debt collectors have to take you to court over an owed debt. If they try to sue you when the statute of limitations has already passed, then the lawsuit is null and will not stand in court.

Learn more about the statute of limitations on different types of debt in Iowa:


Iowa Statute of Limitations
on Debt

Debt Type

Deadline in Years

Rent

10 years (written)

Written

10

Oral

5

State Tax

10

Debt on Account

10 (written)

Judgments

20 (of record), 10 (not of record)


Source: Findlaw


You should also know that whenever you make a payment on a debt, you restart the clock on the statute of limitations. So, before you agree to start paying off an old debt, you should check the statute of limitations first. If it's almost past, don't make any payments or you may be giving the collector the right to take you to court.

Overview of how to get debt relief in Iowa

If you are a resident of Iowa and are carrying a significant amount of debt (including auto loan debt, credit card debt, student loan debt, medical debt, etc.), do not give up hope and raise the white flag of defeat. There are options available to show you how to get debt relief in Iowa. As discussed above, those options usually include:

  • Applying for one of the programs available exclusively to residents of Iowa.
  • Using a debt paydown strategy.
  • Finding a debt management program to help you manage your finances.
  • Negotiating a settlement of your debts with the assistance of a debt settlement company.

No matter the option you choose, SoloSuit is here to help. Check out these informational resources to provide additional insight on the best ways to get debt relief:

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