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Can you consolidate your debt in Vermont?

As of 2022, Vermont's average credit card debt was $6,525. This number is expected to increase in this post-pandemic world where consumer spending is returning to life. The biggest worry is that people are using credit cards more and more. At the same time, inflation and other economic problems, like high energy costs and global instability, seem to be here to stay until at least 2022.

A significant portion of Vermont's population is burdened with debt, whether from credit cards, mortgages, or student loans. In particular, the average Vermonter is paying off more than $38,000 in student loans. This makes Vermont the seventh state in the U.S. with the highest average quantity of student loan debt per resident.

How can debt consolidation help the residents of Vermont?

With debt consolidation, it's easier to manage your finances because you'll only have to pay one monthly payment for the combined debt, instead of multiple monthly payments to various companies and creditors. You'll also save money by combining your debts, both in terms of interest and late fees.

There are three ways to consolidate debt:

  • 0% or low-interest balance transfer cards
  • Low-interest personal loan or debt consolidation loan
  • Debt consolidation programs

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How does a balance transfer card work in Vermont?

A balance transfer card is a type of credit card where you can transfer your debt. These cards usually have low to 0% interest rates. This type of card is ideal for those who are paying off high-interest debts. If done strategically, this can save people with high-interest debt a lot of money on interest charges. For example, if you move debt to a balance transfer credit card with a 0% introductory APR, you might be able to pay it off without paying any interest.

In Vermont, the charges typically lie around 2% to 7.25% APR, with a six-month introductory period where lenders can charge up o 2%. Some organizations might not charge a balance transfer fee. However, some organizations can charge 3%-5% of your total balance as a fee for the transfer. Furthermore, you need a good credit score, usually around 690.

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How does a Vermont debt consolidation loan work?

When you use a debt consolidation loan, you take out a new loan to pay off your debts and liabilities. Debt consolidation is when you combine several small debts into one larger loan with better terms for paying it off, like lower interest rates or lower monthly payments, or both. There are ways to consolidate all types of debt, including student loans, credit card debt, and more.

As a result, the amount of money you pay in interest each month should be reduced by as much as 10% to 12% when you consolidate your debts. On the other hand, personal loans have fixed payment plans that spread out your debt over several years. Because of this, the amount you have to pay each month could easily go up.

In Vermont, most consolidation loans have an APR of 10% to 18%, but the actual rate you pay will be determined by factors such as your credit score and long-term financial goals.

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How can a Vermont debt consolidation program help you?

When you are struggling with debt, and it starts to become overwhelming, then it's time to get professional help. Depending on the amount and quantity of debt, an individual can be debt free within five years or less through a debt consolidation program.

A debt consolidation program is a debt relief program offered by non-profit or for-profit organizations that helps people take control of their finances and become debt free. The credit counselors of the organization talk to your creditors and negotiate a deal where they lower your interest rates. The credit counselors provide a service to their clients where they have to make single monthly payments to them, and they distribute the payments to the creditors the clients owe. Unlike a debt consolidation loan, where your debts are accumulated into a single loan, a debt consolidation program actively helps you pay off all of your debts.

With the help of a Vermont debt consolidation program, you can be debt free in five years or less.

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What are the types of debt that can be consolidated in Vermont?

In Vermont, you can consolidate both secured and unsecured debts, like:

  • Personal loans
  • Payday loans
  • Credit card debt
  • Medical bills
  • Auto loans
  • Mortgage
  • Student loans

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What are the statutes of limitations on debt in Vermont?

Vermont's statutes of limitations on debt govern how long a creditor can take legal action to recover money that is owed to them. According to the Fair Debt Collection Practices Act, institutions can't sue or threaten to sue consumers after thestatute of limitations has passed. When the time limit for the debt has passed, the debt should be taken off of the debtor's credit score to show that the debt is no longer owed. In the United States, state governments have the legal power to decide how long the statute of limitations is, and many states have different statutes of limitations for different kinds of debt.

There are four different statutes of limitations in Vermont, each of which corresponds to another type of debt. There are four types of contracts: written contracts, oral contracts, collecting debts on accounts, and judgments.

  • For written contracts, the statute of limitation is six to eight years.
  • Collection of debt on accounts has a limitation of six years.
  • For judgments, the limitation is eight years.
  • Oral contracts have a limitation of six years.

Even though these categories are set up to cover a wide range of legal situations, they are not foolproof. Vermont state laws can, if needed, lead to the legal extension of debt beyond the legislature's intended limitation period. Therefore, some debts may last forever, which goes against the state's intended statute of limitations. This means that Vermonters who are in debt may be affected by their debts for the rest of their lives.

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In the end

Debt consolidation will only work if you keep your finances under control and don'tfall into debt again. This is the most common problem where individuals keep using more credit while trying to pay off their debt. Indeed, times can be difficult to the point where even making daily expenses can feel like a burden, but you have to find a way to manage those as well. You can try different budgeting strategies or use a credit counselor to help you manage your finances. Understanding your state's unique resources and laws can help you avoid any misunderstanding when it comes to paying off debt. Having debt can be frightening, but consumer protection programs are in place to safeguard your money.

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