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New Hampshire Debt Relief: Your Guide to State Laws and Managing Debt
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Dealing with debt can be a struggle, no matter where you live. Fortunately for residents of New Hampshire, there are consumer-friendly laws on the books that can making borrowing and repaying money easier than in some other parts of the country.
Whether you’re at the point where payday loans and bankruptcy seem like a viable option, or you’ve got a handle on your debt, but want to manage it better, you can learn about the state-specific laws and general recommendations for New Hampshire debt relief in our guide.
- Debt in New Hampshire: At a glance
- Debt collection in New Hampshire
- New Hampshire debt relief programs
- Payday lending laws in New Hampshire
- Tips to tackle debt in New Hampshire
- Filing for bankruptcy in New Hampshire
- The bottom line
Debt in New Hampshire: At a glance
|New Hampshire debt|
|Type||Per capita balance, 2018||Rank out of 50 states*||U.S. per capita balance|
|Credit card debt||$ 3,530||11||$ 3,220|
|Student loan debt||$ 5,860||14||$ 5,390|
|Auto debt||$ 5,360||6||$ 4,700|
|Mortgage debt*||$ 36,760||16||$ 33,680|
|*No. 1 is highest
**First-lien debt only
Source: Federal Reserve Bank of New York, March 2019
Debt collection in New Hampshire
The Fair Debt Collection Practice Act (FDCPA) is a federal law that generally only applies to third-party debt collectors, such as a collection agency that buys debts from original creditors. It says what collectors can and cannot do, and outlines your rights as a consumer. For example, debt collectors can’t threaten you, must stop contacting you if you send a letter asking them to do so and can only call you between 8 a.m. and 9 p.m. local time.
The FDCPA applies in every state, but many states have additional debt collection laws on the books. In New Hampshire, the Unfair, Deceptive or Unreasonable Collection Practices Act (RSA 358-C) is such a law.
In most ways, the state and federal laws are similar. However, there are some important differences. One is that the New Hampshire state law applies to companies that are collecting debts owed to them, while the FDCPA generally only applies to third-party collectors (or to companies that use a differently named division to collect their debts).
For example, if a furniture store sells a couch on credit, the buyer doesn’t repay the debt and the store tries to collect the money it’s owed, the FDCPA may not apply, but the New Hampshire state law does.
Another difference is that the state law has stricter requirements about when and why debt collectors can contact a debtor’s spouse, parents or guardians. In New Hampshire, it’s only allowed (and only allowed once) to help the debt collector find the debtor if the collector hasn’t been able to do so for 30 days. Under both state and federal laws, collectors generally can’t discuss your debt with anyone else but may be able to ask someone else about your current location.
Responding to collection letters
It’s best not to ignore collection letters, particularly the first time a collection agency contacts you. You may only have 30 days to dispute the claim that the debt is yours or the amount that you owe.
This could happen when a debt buyer purchases a list of debts that includes one you’ve already repaid or the collector is (perhaps illegally) adding additional fees or expenses to the debt and hoping you’ll send a payment.
Review the letter closely and then determine how best to respond. You may want to mail a letter back asking the collector to give you more information about the debt or to dispute the claim that you owe the money. The Consumer Financial Protection Bureau (CFPB) has several templates you can use for different situations.
If you’re having trouble with a debt collector, you could contact the CFPB or the New Hampshire Consumer Protection Bureau and file a complaint.
Understanding New Hampshire’s statute of limitations
The statute of limitations is the period of time during which collection agencies or creditors can sue debtors and force the repayment of a debt. A successful lawsuit could lead to the debtor’s wages or bank accounts being garnished.
After the statute of limitations, the debt becomes “time-barred.” You still owe the debt, but you can get lawsuits thrown out if the collector tries to sue you. However, you may need to appear in court and show that the debt is time-barred to avoid having the judge automatically rule in the creditor’s favor.
|New Hampshire Statute of Limitations on Debt|
|Mortgage debt||20 years|
|Medical debt||6 years|
|Credit card||3 years|
|Auto loan debt||4 years|
|State tax debt||6 years|
The statute of limitations for a debt can depend on the type of debt, where you lived when your account went past due, the state where you currently live, the state agreed upon in your contract or the state where the creditor is based.
For New Hampshire, the statutes of limitations on various types of debt are outlined above, but these are broad categories that might not clearly include your debt. For instance, there’s generally a three-year limit on written contracts and open-ended accounts (such as credit cards, which don’t have a predetermined pay-off date). However, some auto dealers finance the purchase of a car with a retail installment agreement and the statute of limitations on debt from the sale of a good is four years. So, depending on how you finance a vehicle, the debt for your “auto loan” may fall under the three- or four-year category.
Generally, the clock for the statute of limitations starts once your account is in default, which often occurs after several missed payments. However, like the length, the starting point may vary based on your contract or laws for certain types of debt.
You may want to tread carefully when you’re contacted about a debt, particularly if the debt is nearing or past the statute of limitations. Making a payment could re-age the account and reset the clock. Even acknowledging the debt is yours and making a promise to pay could reset the clock.
New Hampshire debt-relief options
If you’re having trouble paying your creditors and collection agencies, or with a company that you feel is violating the law or harassing you, there are several organizations in New Hampshire that may be able to help.
GreenPath, a nonprofit credit counseling organization, has an office in Manchester. The organization offers credit and debt counseling over the phone, or you can schedule an appointment for an in-person meeting.
The New Hampshire Consumer Protection Bureau could also be a helpful resource if you’re having trouble with a collector. You can file a complaint against the company and learn more about consumer rights in New Hampshire from the bureau.
If you’re looking for legal assistance, New Hampshire Legal Aid offers free legal information, advice and representation to qualified residents.
You can also use 211NH.org to find additional community resources, organizations and assistance. The website can guide you in your search and has categories with specific information for consumer services, income security, and criminal justice and legal services.
Payday lending laws in New Hampshire
Payday loans are often a last-resort option for people who quickly need to borrow money and don’t have access to a credit card or good-enough credit to qualify for a lower-cost loan. Payday loans tend to be for small amounts and come due within a few weeks, such as on your next payday. In New Hampshire, the limitations are as follows:
- Maximum loan amount: $500
- Maximum loan term: 30 days
- Finance charges: Lenders can only charge interest and, at most, a payday loan can have a 36% annual percentage rate (APR). This is equal to a $1.38 fee per $100 borrowed on a 14-day loan.
Because they often have a high interest rate and short repayment term, payday loans are often one of the most expensive forms of borrowing. They may even lead to an unbreakable debt cycle, when borrowers wind up taking out new loans to repay their initial loans and can never get themselves out of debt.
Some state laws have cracked down on payday lenders in an aim to help consumers. New Hampshire’s 36% APR cap is quite low — in some states, the APR can be well above 100%. Additionally, in New Hampshire, payday lenders can’t approve a new payday loan if you currently are repaying a payday loan or if you’ve had a payday loan in the previous 60 days.
These laws may make payday loans in New Hampshire a better option than they may be in other states. However, there currently aren’t any payday lenders registered in the state.
You also still need to beware of taking out high-cost loans, including lines of credit, installment loans and title loans, that are marketing to people with poor or no credit. These alternative options might not be regulated by payday loan laws and could still lead to debt cycles. Additionally, online lenders may offer you a loan with terms that don’t comply with New Hampshire law.
Tips to tackle debt in New Hampshire
There are a few common methods for paying down debts that you might consider. Each has its pros and cons, but these strategies may help you save money, time or make the process easier to manage.
Consolidate your debt
If you’re working on paying down multiple debts, you might benefit from consolidating your debts into a single loan. Consolidation generally involves taking out a new loan and using the proceeds to pay off your existing debts. You could take out a personal loan to consolidate debt from several credit cards, or even use a home equity loan or line of credit to pay off other debts.
Generally, consolidation may be a good idea if you can save money on interest or lower your monthly payments. However, consider which type of debt you’re taking out.
Often, using a secured loan (like a home equity loan) to consolidate unsecured debt (such as credit card debt) isn’t a good idea because you’re taking on more risk. While falling behind on credit cards may lead to fees, interest and hurt your credit scores, if you can’t afford your mortgage, you may lose your home.
Like consolidation, refinancing is the process of taking out a new loan to pay off an existing loan. However, refinancing often involves changing the loan’s terms but keeping the type of debt the same. For example, your new mortgage lender will pay off your current mortgage lender. Or, you could take out a new auto loan to pay off your current auto loan.
Refinancing is generally a good option if your creditworthiness has improved and/or interest rates have dropped since you first took out your loan. Ideally, you can get a lower interest rate on your loan and save money. Some people also look to refinance and extend their loan’s term to lower their monthly payment. While this can lead to paying more interest overall, it could make your budget easier to manage.
Use a balance transfer card
A balance transfer credit card is a credit card that offers a promotional interest rate on balances that you transfer to the card. For example, you might be able to get a credit card with 0% APR for 15 months upon balance transfer.
By moving debt onto the card and then paying it down, you can avoid paying the interest that’s currently accruing on your debts. You can then use the savings to erase the debt even quicker, potentially paying off the credit card before any interest accrues. If you aren’t able to do this, though, then this might not be the best option, as it could get you into even deeper debt than you were in before.
Many balance transfer credit cards will charge you a fee, such as 3% of the amount of debt you transfer, and you won’t know your credit limit (which limits how much debt you can transfer) until after you’re approved. These drawbacks can make the offer less appealing, but you could still come out ahead, depending on the balance transfer offer and your loans’ current interest rates.
Filing for bankruptcy in New Hampshire
If you’re unable to afford your bills and don’t feel like you’ll have an options soon, you may want to consider filing for bankruptcy. While filing for bankruptcy isn’t free, and might not always be an option, it could lead to an immediate pause in wage garnishments and foreclosure actions and help you catch your breath while reassessing your financial situation.
Most consumers file for a Chapter 7 or Chapter 13 bankruptcy. In short, Chapter 7 will require liquidating your non-exempt assets, using the funds to pay off creditors and then wiping out the remaining debt. Depending on your situation, some debts, such as student loans, might not be dischargeable.
If you’re not eligible for Chapter 7, perhaps because your income is too high, Chapter 13 bankruptcy might be an alternative option. With a Chapter 13 bankruptcy, you can keep your property, but your debts won’t be discharged. Instead, you’ll be able to arrange a more manageable repayment plan with your creditors, usually lasting three to five years.
Because bankruptcy laws are federal laws, the process is similar no matter where you live. However, there may be some state-specific rules or forms to be aware of when considering bankruptcy.
The bottom line
If you’re struggling with debt and considering bankruptcy, you may want to start by contacting the local nonprofit credit counseling organization and ask if there’s a free or low-cost consultation available. You may even learn that some of the other options, such as consolidation or ignoring collections that are outside the statute of limitations, can make your debt manageable.
The information in this article is accurate as of the date of publishing.