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Alabama Credit & Debt Consolidation Information
If you’re an Alabama resident dealing with credit card debt, we can help. InCharge provides free credit counseling to residents in all 50 states, including Alabama.
The average Alabaman now carries $9,161 in credit card debt, up 6% from the previous year. And, according to a recent study, around 40% of people living in Alabama have some debt that’s past due to the point of collection activity.
The interest charged on a high credit card balance combined with a delinquency rate of 1.6% can create a cycle of financial strain driving Alabamans to become even more dependent on credit cards to meet their financial obligations month to month. This cycle can make it seem impossible to pay down debt.
In fact, Alabama rounded out the top 10 states for the number of bankruptcy filings for the 2016-2017 fiscal year.
Housing can also become an issue when struggling financially. A decline in residential inventory in Alabama means that the cost of buying a home has increased. Though Alabama home prices and rent are still affordable by national standards, it may still be a strain for those struggling with debt especially as wages and income remain stagnant.
It can also be challenging to secure housing if debt is negatively impacting credit scores.
Alabama Debt Relief
InCharge is a nonprofit debt counseling service that operates within the state. There’s a website (incharge.org) where those seeking help can apply online. You can also apply over the phone.
After the credit counseling session, the certified counselor may suggest a debt management program, or DMP, that works with creditors to consolidate your debt, reduce the interest rate on your credit cards and create a monthly payment plan that you can afford. InCharge administers the program, taking your payment each month and distributing the agreed upon shares to your creditors.
Credit scores are not a factor when enrolling in a DMP. This means that even if your credit score has suffered, InCharge can still offer you a debt-relief option to help get you back on track financially.
While a debt consolidation program might offer a way to solve money issues and avoid bankruptcy, it is just one of a number of assistance plans available in Alabama. Financial aid for crisis situations, help with medical expenses, legal aid and help to deal with debt collectors is available through state programs. The state also offers grant and assistance programs to state residents and participates in federally funded programs like rent vouchers for low-income people.
Some of the assistance programs available include:
- Family Assistance Program —This program provides temporary cash assistance for basic needs for low-income families with children.
- Homeless Programs and Eviction Assistance —Federally funded through HUD, this program offers free legal support, emergency rent funds, and moving funds for needy families.
- Legal Assistance —Provides free legal advice for civil cases and a network of resources to help residents with gaining access to representation.
- Alabama Energy Bill Assistance —Low-income, elderly, and/or disabled citizens can apply to receive help paying utility bills. All energy companies operating in the state offer some kind of assistance program
- Alabama First-Time Homebuyer Assistance Program —Offers affordable loans without the need for a large down payment.
- Step Up —Assistance for moderate-income home buyers who can afford a mortgage but need help with generating a down payment to purchase a home.
The Alabama Department of Social Services also offers grants and assistance to residents.
Among the key programs are:
- Alabama Food Assistance Program —Provides assistance to low-income residents to ensure they can buy the food they need.
- ALL Kids/Medicaid —Free or low-cost insurance coverage.
- Employment Services —Job postings for those seeking employment.
- JOBS Program —Provides work and training services to all Alabama parents receiving cash assistance to help them find and retain employment.
- Vocational Rehabilitation Services —Offers support for residents with disabilities to secure training and employment.
How to Apply for Alabama Food Assistance (Food Stamps)
Like many states, Alabama helps qualifying residents apply for federally funded food stamps. The monthly benefits are provided on an EBT card, used like a debit card, to purchase food at participating grocery stores.
Alabama applicants need to complete an application form that can be obtained online or at a state welfare office.
Some of the information required includes:
- Proof of income
- Proof of household expenses
- Proof of child support
- Proof of medical costs (required if a household member is disabled or older than 60)
Housing Assistance Programs
Federally funded Section 8 housing assistance is available in Alabama. Eligibility is based on income and the income limits can vary from place to place around the state.
The program provides rent subsidies for very low-income families through funding from the U.S. Department of Housing and Urban Development. Demand for this program in high in some areas and applicants may be placed on a waiting list after applying. Background checks are required for some applicants.
Alabama also operates homelessness prevention programs and rehousing services. It offers aid to prevent evictions, helps locate transitional housing, offers one-time rent help and offers funds to pay security deposits. Help with the application processes for any of these programs can be found at your local public housing authority or Department of Social Services office.
Low-Cost Health Insurance for Alabama Residents
ALL Kids and Medicaid are federally funded and health insurance programs. Medicare is also available for elderly residents and those with disabilities
These programs help residents who can’t afford other health coverage options or who aren’t offered health insurance through work. You can apply for these services in person at Social Services offices or online.
More About Alabama’s Economy
Alabama’s unemployment rate closely mirrored the national average at 3.8% in early 2019. Employment has grown steadily since 2010, after an unemployment rate high of 11.8% unemployment rate for the last quarter of 2009.
Alabama’s GDP posted a 2.2% growth-rate increase for 2018 compared to 2017 with the manufacturing sector showing the strongest growth.
Despite this growth and an unemployment rate in line with the national numbers, Alabama remains the 6th poorest state in the nation. Alabama’s overall poverty rate has declined from 18.5% in 2017 to 17.2% in 2018, which is good news, but the poverty rate also varies widely by county. In fact, the 2018 poverty rate for 23 of Alabama’s 67 counties came in at 25% or more, dwarfing the national average of 14%.
