A few hundred years ago, it was a more serious problem to get crossways with creditors. One of the practices the pilgrims brought across the ocean when they fled England was the concept of a debtor’s prison. That’s right. You could literally be thrown in jail for not paying your bills. These days, society takes a more humane approach to the issue and has even gone as far as to pass specific legal protections for a debtor from his creditors. On the federal level these protections have been codified in the form of the Fair Debt Practices Collection Act. Maryland has taken the idea a step further and created it’s own protective set of debtor laws on the state level.
State Level Protection
With the Maryland Consumer Debt Collection Act (MCDCA), the state created broad restrictions on the actions of a collector, who was defined as “a person collecting or attempting to collect an alleged debt arising out of a business transaction.” Whereas the Federal statute targets only the debt collection industry, Maryland’s law places restrictions on estates, individuals, and just about anyone else who tries to collect a debt. It’s not intended to stop the collection of legal debts, only to insure a debtor is not ill-treated.
To understand how consumer protection laws have evolved within the state it’s necessary to understand that Maryland was created by carving out parts of Washington DC and Virginia. This proximity to the nation’s capital (and the neverending influx of tax money) has resulted in Maryland’s status as one of the most prosperous states, with a median household income exceeding $71,000. As one might expect, the wealth is not evenly distributed. DC commuters with cushy government jobs and those who can afford toney homes on the shores of the Chesapeake Bay skew the numbers upward.
Breaking Down Wealth and Poverty
Living in opposition to the high earners near Washington DC and the Chesapeake area are those grinding out a living in the lower income hinterlands in the western part of the state (near the coal mining West Virginia region) and the urban sprawl of Baltimore, forty miles to the north of Washington DC, a city which carries an unemployment rate significantly higher than the rest of the state. At first glance it might seem that debt relief would not be a big concern in Maryland. Nearly 70 percent of state residents own their own home, but the average individual credit card debt in the state is over $5,000.
How Debt Relief Helps
Being inundated by debt you can’t pay can be emotionally and even physically debilitating. Doctors will tell you unrelenting stress is a killer. Since there are (hopefully) few in this country who think a debtor should die due to financial circumstances, debt relief organizations have sprung into existence as one way for good people going through hard times to find relief. Often the law is there to help as well.
We’ve already mentioned state and federal laws aimed at limiting the actions allowed by debt collectors, and this is only the tip of the iceberg. Did you know each state has a statute of limitations on credit card debt? After the deadline passes, a credit card company cannot file a lawsuit to collect payment. Professional debt relief counselors may be able to negotiate a reduced lump sum payment or smaller monthly payments over an extended period of time. Debt consolidation is another popular option.
Can Debt Relief Help You?
There are several factors to look at when you consider whether or not you might be a good candidate for debt relief. A few initial questions would be do you have a high amount of unsecured debt and do not want to declare bankruptcy? Are you looking for quick relief? Can you raise 50 cents on every dollar of debt you owe within the next 18 months? This is a typical benchmark debt counselors look for before they enter negotiations with a credit card company. If you think your situation fits within these parameters, you might be pleasantly surprised to find debt relief is a realistic option.
Whether your debt is the result of bad financial decisions or simply unfortunate luck, Marylanders should be aware that both the law and certain debt relief organizations stand ready to protect your rights and improve your situation. While there are no guarantees as to what the ultimate fate of your debt might be, the initial consultation is normally free. You should leave the office with a realistic idea of your chances for getting out from under a pile of debt. Here’s hoping the news is good and, if not, bankruptcy court exists for a reason.