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West Virginia Debt Relief: Your Guide to State Laws and Managing Debt
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West Virginia is a tree-covered state that gets its “Mountain State” nickname from the fact that it lies in the heart of the Appalachian Mountains. Ever since it split from Virginia during the Civil War to form its own state, West Virginia has had its own legislature making state laws.
In this article, you’ll learn about some of the state laws West Virginia has implemented regarding debt relief and collection, including statewide statistics on average debts and statutes of collection. If you’re a state resident already dealing with overwhelming debt, you’ll learn about debt relief programs and options within the state.
- Debt in West Virginia: At a glance
- Debt collection in West Virginia
- West Virginia debt relief programs
- Payday lending laws in West Virginia
- Tips to tackle debt in West Virginia
- Filing for bankruptcy in West Virginia
- The bottom line
Debt in West Virginia: At a glance
|West Virginia debt|
|Type||Per capita balance, 2018||Rank out of 50 states*||U.S. per capita balance|
|Credit card debt||$2,240||49||$3,220|
|Student loan debt||$4,020||48||$5,390|
|*No. 1 is the highest
**First-lien debt only
Source: Federal Reserve Bank of New York, March 2019
The good news for West Virginia residents overall is that debt levels in the state are fairly low, relative to the rest of the country. Credit card debt, student loan debt and mortgage debt are all among the lowest in the entire United States. These totals are just averages, however. There are still plenty of West Virginia residents in need of debt relief assistance.
Debt collection in West Virginia
West Virginia carries the same protections against debt collectors as all other states under the Fair Debt Collections Practices Act. This federal law prohibits debt collectors from making harassing phone calls, misrepresenting the amount due or threatening illegal acts, among other provisions.
However, West Virginia also has its own laws that hold debt collectors responsible if they violate any terms of this act. These state-specific laws are enumerated in the West Virginia Consumer Credit and Protection Act.
In April 2017, several key provisions of the VWCCPA were changed and signed into law by West Virginia governor Jim Justice.
In a nutshell, these rules generally involve the communications around debt collection. There are specific rules for what and how collectors must disclose information to debtors, and vice versa.
Beyond these specific laws, which have been introduced fairly recently to address certain consumer and collection protections, the debt collection process in West Virginia is pretty similar to how it works in all other states.
Debt collection is initiated when a borrower fails to make timely payments on a debt. Usually, this will trigger a letter and/or phone calls. Ultimately, it may lead to the creditor filing a lawsuit. Debt collection laws don’t try to prevent collectors from doing their jobs; they simply restrict their activities to an orderly process. For example, debt collectors are forbidden from harassing customers, such as making excessive phone calls or calling before 8 a.m. or after 9 p.m.
Responding to collection letters
Before you respond to a collection letter, you should understand your rights. If you’re being contacted by a debt collector, make sure you understand both the Fair Debt Collections Practices Act and the West Virginia Consumer Credit and Protection Act. These acts describe both federal and state rules as far as how debt collectors are allowed to contact you. If your creditors stray from these rules, you can take them to court.
Second, be sure that you are being contacted about a legitimate debt that belongs to you. In an era when financial scams are becoming increasingly common, some unscrupulous operators may try to strong-arm you into paying a debt — or an amount — that is not yours. The CFPB suggests that you get this information from the collector that contacts you:
- The person’s name
- The name of the collection agency they work for
- The company’s phone number and address
- The original creditor name
- The amount owed
- What you can do to dispute or confirm the debt
Once you receive this information, you can contact the collection agency in writing. The CFPB offers five different sample letters on its site that you can use to respond to a debt collector.
These letters are tailored to the specific objective you’re trying to achieve when you contact your creditor. The letters can be used if you need more information, if you don’t owe the debt, if you want to stop being contacted while you dispute the debt, if you want the debt collector to work with your attorney, and if you want to specify other ways the collector should contact you.
Last but not least, act quickly. Obviously, if you’re certain the debt isn’t yours, you should contact the collector without delay and indicate that you do not wish to be contacted again. If you aren’t sure, ask for more information. If it’s a very old debt, you might want to contact an attorney to determine if your debt is beyond the statute of limitations. Lastly, if the debt is legitimately yours, see if you can work out a payment plan or settlement with the collector.
If you need to file a complaint about collections practices, you have a few options. In West Virginia, you can contact the Office of the Attorney General’s Consumer Protection Hotline at 800-368-8808. There’s also an online form you can fill out at the Office of the Attorney General’s website.
Understanding West Virginia’s statute of limitations
A statute of limitations is the time limit assigned to pursuing certain legal actions. Creditors cannot take you to court in an effort to collect outstanding debts if they have passed the legal time limit. (They can, however, still pursue the debt outside of court.) The statute of limitations varies from state-to-state and is also affected by the type of debt, as outlined in the chart below.
|West Virginia Statute of Limitations on Debt|
|Mortgage debt||10 years|
|Medical debt||10 years|
|Credit card||10 years|
|Auto loan debt||4 years|
|State tax debt||5 years|
Technically, you still owe a debt even if it has gone past the statute of limitations. Legally, the statute just means that a creditor can’t obtain a judgment against you. However, according to the rules of the Federal Trade Commission, creditors can still contact you about old debts, also known as time-barred debts. They can’t force you to pay, or take you to court, but they can still try to collect.
Some debtors pay off time-barred debts, either because they feel a moral obligation to satisfy debts they have legitimately incurred or because they simply want to get creditors off their backs. But from a strictly legal perspective, you no longer owe the money on a time-barred debt. If you do begin making payments on a time-barred debt, you essentially “bring it back from the dead” and it becomes a new legal obligation that you have to pay.
On a relative basis, debt statutes of limitations in West Virginia are long. In California, for example, the statute of limitations on credit card debt is just four years. In this sense, West Virginia is a creditor-friendly state, as collectors have 10 full years to file a lawsuit. Trying to wait out a debt until the statute of limitations expires is never a sound debt relief strategy, but this is particularly true in West Virginia.
West Virginia debt relief programs
If you legally owe a debt that falls within the statute of limitations, you’re going to have to find a way to pay it, or at least somehow resolve it. Although the experience may feel overwhelming, every state has organizations that can help you through the process via counseling or payoff planning.
In West Virginia, a number of credit counseling agencies that have been approved by the U.S. Department of Justice are available to assist those in financial distress. A listing can be found here, divided by district. The state also provides a list of home counseling agencies if you’re in danger of losing your home.
Here are some other state and federal agencies or service providers that can help you with your bills:
West Virginia Bureau for Children and Families: This government agency is responsible for the day-to-day delivery of needed services, from food stamps and foster care to child and adult protective services, adoption and financial services.
Appalachian Power Payment Assistance: APPA provides financial assistance ranging from extended payment agreements and one-time extensions to low-income and medical hardship programs.
National Foundation for Credit Counseling: NFCC member agencies provide a wide variety of financial counseling services, covering everything from credit and debt to student loans and mortgages for first-time home buyers.
Note that if you search for West Virginia debt relief programs, you’re likely to turn up countless for-profit companies that will offer to consolidate your debt for you. While some of these are legitimate businesses, many are simply trying to get you to move your debt over to them so that they can earn your interest payments.
While, in some cases, these programs can work to your benefit, at least at the outset you should contact nonprofit or government-sanctioned agencies that will try to work in your best interest to help get you out of debt.
Payday lending laws in West Virginia
Unlike many states, West Virginia bans payday cash advances in the state. As payday lenders are notorious for charging exorbitant interest rates, this move is likely seen as a way to protect customers from themselves. Even in the most dire circumstances, a payday loan is typically not a financially sound course of action.
Although payday advances and loans are prohibited, you can still take out loans in West Virginia, subject to certain limitations. Interest rate limits depend on the size of the loan. For unsecured loans up to a $2,000 limit, the highest allowable interest rate is 31%. For secured loans, or those between $2,000 and $10,000, the interest rate is limited to 27%. Loans above $10,000 have an 18% interest rate maximum.
Payday loans in West Virginia, along with the restrictions on general loans, are regulated by the Office of the Attorney General. The office has a webpage dedicated to consumer protection, where you can find out more information about payday loans and debt collection in general.
Tips to tackle debt in West Virginia
If you’re overwhelmed by your personal debt, take a moment and understand that there are strategies you can implement to help you climb out of the hole. Given enough time and effort, you may be able to restructure your financial life to the point where you can get all of your debt paid off. Here are some options that can get you moving down the path of liberation from your debt.
Consolidate your debt
Consolidating your debt means taking all of your different outstanding debts and assembling them into one package, typically via a new loan. For example, if you have three outstanding medical bills, along with four credit card debts, you can take out a new personal loan that pays off all of your balances.
One of the main pros of consolidating your debt in this fashion is that you only have one fixed monthly payment to stay on top of. Some debtors fall behind on their debts because they simply have too many different monthly payments to monitor. If you forget to pay even one on time, your credit will get dinged, possibly raising your interest rates. With a single outstanding payment, this is less likely.
Another potentially large benefit of debt consolidation in West Virginia is that you may be able to reduce your interest charges. Say you owe four credit card companies $10,000 in cumulative debt. If your average interest rate is 18%, you’ll owe $1,800 just in interest charges your first year. If you can consolidate that debt down to an 8% personal loan, for example, you could save $1,000 per year in interest.
If you’ve already fallen behind on your payments or have otherwise triggered a delinquency, consolidation may be more difficult to qualify for, at least at a decent interest rate. Try to be proactive and move toward consolidation before you reach the point where you can’t make your payments.
Refinancing a loan is somewhat akin to consolidating, except the term generally refers to auto or mortgage debt that is shifted to another lender in the same industry. Typically, refinancing offers a way to either lower your monthly payment, reduce your total interest charges or change the duration of your loan.
A common example is a car loan. Let’s say you still owe $20,000 on your car over the next four years at a 4% interest rate. This makes your monthly payment $452. If you can instead refinance to a 3% interest rate over five years, your monthly payment will drop to $359. In addition to reducing your monthly payment, this lowered rate will reduce your total interest cost by $156.
Refinancing your home mortgage is another way that you could potentially reduce your interest burden and free up your cash flow. As mortgages are a very competitive field, many lenders may try to entice you to refinance with various rate structures and programs. Before you make a move, make sure to do the math to ensure that your new terms are affordable and fit your needs.
Use a balance transfer card
A balance transfer card can be a way to help keep your credit debt — or any debt — in check. Many credit cards offer introductory interest rates as low as 0% to entice you to transfer balances to a new card. Of course, you have to have a high enough credit score to qualify for a new card, which might not be an option if you’re already over your head in debt.
Your best bet might be at accept a pre-approved offer in your mail, as the card company has usually done at least a preliminary screening on your credit. Otherwise, consider credit card companies that cater to applicants with lower credit scores. These cards may be labeled “subprime.”
Bear in mind that eventually your promotional interest rate will expire, typically after 12 to 21 months. Check to see what the normal rate will jump up to after the introductory period to potentially save yourself from ending up in more debt if you can’t pay the card off before this point. Also, note any fees that are attached to your balance transfer. In many cases, you’ll have to pay at least 3% to 5% on the amount that you transfer.
Filing for bankruptcy in West Virginia
Filing for bankruptcy is generally considered an option of last resort. However, if there’s no other way out, bankruptcy can offer a legal means to reduce or eliminate certain debts.
The two main types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 is known as a “liquidation” bankruptcy, because you may have to surrender some property to satisfy your debts. Chapter 13 bankruptcy, also called a “wage earner’s plan,” ultimately grants you a discharge of your debts, but you’ll have to pay some or all of them back along the way.
The choice of Chapter 7 vs. Chapter 13 bankruptcy is not always in your hands. West Virginia will require you to complete a means test to determine if you are capable of paying back some or all of your debts. Essentially, if you have too high of an income, you’ll be pushed into a Chapter 13 repayment plan. If you have little by way of income or assets, Chapter 7 may be an option.
The main pro of both forms of bankruptcy is that upon discharge, you’ll no longer be responsible for your debts. The main con is the cost. With a Chapter 7, that cost may come in the form of the liquidation of some of your assets. With a Chapter 13, the cost will come in a monthly payment plan that may last as long as five years.
To start the bankruptcy process in West Virginia, first you’ll need to complete a credit counseling course approved by the U.S. Trustee in West Virginia. During the course of taking this class, you may discover other ways to satisfy your debts. If not, you’ll begin the formal bankruptcy filing process.
Bankruptcy paperwork can be complicated, so you may want to work with an attorney for the filing process. If all your paperwork is in order, you can expect a Chapter 7 discharge in about four months after you file. With a Chapter 13, you’ll have to devise a court-approved payment plan that will last for between three and five years.
Bankruptcy courts nationwide are divided into districts. To find the specific West Virginia court where you should file your bankruptcy, you can visit the U.S. Courts website and enter your address information here. To learn more about state-level bankruptcy laws in West Virginia, visit any of the district court websites and read the local bankruptcy rules. You can also find information on understanding bankruptcy at the district court sites.
The bottom line
If you find yourself in the position of having too much debt in West Virginia, you have options to deal with it. State and federal laws provide consumers with various protections against overzealous creditors, but it’s best if you can get a handle on your debt before it gets to that level. Between balance transfers, refinancing or negotiations with your creditors, you can often find a way to improve your situation. If you’ve already fallen behind on your debt and there seems to be no way out, you can talk to debt counselors, negotiate with your creditors or consolidate your debt. As a choice of last resort, you can consider a bankruptcy filing. You may wish to speak with an attorney who specializes in the debt laws of West Virginia to ensure you’re properly protected.
The information in this article is accurate as of the date of publishing.