Montana Resident Debt Relief

While the pandemic and hard times that followed were certainly taxing for Montanans, residents of “Big Sky Country” weathered the down period financially for the most part and ultimately laid the foundation for better days to come.

Health care and tourism were the hardest hit industries in Montana by a pandemic that kept people locked down for months at a time. Still, though, Montana was able to capably adjust and adapt its economy to the point where Patrick Barkley — the Director of the University of Montana’s Bureau of Business and Economic Research — is now pointing toward a brighter future for the state.

The later months of 2020 offered what Barkley termed to be “a period of surprises,” in comments to the Daily Inter Lake, and that optimism ultimately carried into 2021 as jobs and hope started to return for Montanans.

Despite those encouraging trends, it has also become clear to many Montanans that it most likely will take years to fully recoup all that was lost economically.

Nonresident visitors to Montana dropped 10% and consumer spending fell off by 7% in 2020, according to Jeremy Sage, the interim director of the Institute for Tourism and Recreation Research at the University of Montana. Not surprisingly, hotels and restaurants took the brunt of the tourism hit and their revenues fell by 46% in 2020.

Struggles in those industries have led to serious financial concerns and soaring credit card bills for many Montana residents. Fortunately, there are private and governmental agencies in place to help Montanans in need of financial assistance.

Debt Relief Options for Montana Residents

A top choice for consumers struggling financially is InCharge Debt Solutions’ debt management program. InCharge’s certified credit counselors can assist those in need to consolidate credit card debt, lower interest rates and come up with payment plans that best align with them financially.

Consumers were hit by staggering interest rates of 16.5% on average in 2021 by the credit card companies. Consumers who couldn’t pay off their credit card debt each month, could see the interest rate climb to 25% or more. InCharge will work hand-in-hand with credit card companies to help them get interest rates down to approximately 8%.

The goal of the debt management program is to eliminate credit card debt in 3-to-5 years. However, clients must adhere to a detailed spending budget in order to eliminate their credit card debt in that timeframe.

InCharge manages the program, taking monthly payments and distributing them to creditors in agreed upon amounts. InCharge consumers can apply for this easy-to-operate service online or over the phone.

Here’s another important factor to consider involving your debt-consolidation plan: Credit score is not a factor to enroll in the plan. Clients with lower credit scores can still qualify for debt management plans.

Here are some of the assistance programs available to Montanans facing dire financial circumstances:

• Debt Settlement – Debt settlement is an option that can be used for credit card relief, personal loan payments or medical bill issues. The goal is to pay less than what is owed. This option could prove to be very beneficial because it might let you lower your payments substantially. While this option can be an alluring one to help in eliminating debt, it could end up causing financial problems in the future. Using debt settlement goes on your credit report for seven years with the notice that “Paid less than full amount.” Future lenders may see that and make it difficult to offer credit for major purchases like a home or car.
• Credit Card Debt Forgiveness – This is offered by a select group of nonprofit credit counseling agencies. The difference between this and traditional debt settlement is that the creditors have agreed in advance to reduce the amount owed by 40%-50%. Consumers can start reducing the amount owed with the first monthly payment and eliminate the debt in 36 months.
• Debt Consolidation Loan – If your credit score is solid, you might be eligible for a low-interest debt consolidation loan. You’ll still have to pay back the amount owed, but you won’t be penalized so harshly by the high interest rates charged by the credit card companies.
• Bankruptcy – This option might appear to be the most appealing because it will allow you to get rid of your credit card debt. However, this avenue should only be exercised when all other options have been tried. Filing for bankruptcy will negatively impact your credit score for 7-to-10 years. The ding on your credit score likely will impact your odds of getting a home or vehicle loan any time soon. Before filing for bankruptcy, make sure to contemplate the impact that this option will have on your credit in the future.
• Do it yourself plans – If you are the type of individual who prefers a do-it-yourself plan, you might consider a DIY-style debt management program. DIY plans can assist you in constructing a plan that better aligns with your financial needs.

Montana Debt Resources

Montana residents having a hard time landing employment, securing housing or paying off their bills each month could meet eligibility standards for financial assistance through a variety of federal and state programs. Here are some of the services available to Montanans in need of affordable housing, reliable child care, bill-payment plans, legal services or other daily needs:

• Hunters Against Hunger: Hunters Against Hunger works in conjunction with the Montana Fish, Wildlife and Parks departments to help feed those in need. Hunters who harvest big game during hunting season can donate all or part of their meat to feed the needy in Montana. Also, Montanans purchasing hunting licenses can help bolster the program that feeds those in need by making on-the-spot donations.
• Low-Income Home Energy Assistance Program: Montana’s LIEAP offers two programs aimed at helping low-income individuals deal with heating costs on a monthly basis. LIEAP will pay some of the energy costs for those who qualify. Most utilities offer LIEAP recipients helpful discounts on their bills.
• Home Investment Partnerships Program: The HOME program is designed to help create affordable housing for low-income residents of Montana. The HOME program is hopeful that it can expand its supply of affordable housing, while also improving the means of state and local governments to put in place strategies to build more affordable housing.
• Montana Legal Services Association assistance programs: The MLSA has worked hard to keep thousands of Montanans from being evicted since the COVID-19 pandemic began in the spring of 2020. In June of 2021, MLSA received a grant to expand disaster services to those adversely affected by the pandemic.  The $1 million in grant money received will be crucial to the MLSA in providing disaster-related legal services to Montanans in need.
• Wheels for Work: In Montana’s Yellowstone County, this service is in place to help remove the transportation barriers that often keep low-income individuals from landing and keeping employment. To qualify for this program, Yellowstone County residents must have an income below 125% of Federal Poverty Guidelines and must show 30 days of income verification.
• Montana Subsidized Employment Program: The Montana Department of Labor and Industry can assist residents who need help obtaining or retaining employment that allows them to be self-sufficient. The Department of Labor also can provide training that might help someone land employment that will ultimately put them on a path toward self-sufficiency.
• Summer Youth Employment and Training resource: The HRDC Community Action Agency sponsors this comprehensive youth program for Montanans ages 14-24 who face barriers with training, education and employment and reside in Big Horn, Stillwater, Carbon, Sweet Grass or Yellowstone Counties. The program helps residents complete secondary school and obtain a diploma or a GED equivalent and either enroll in post-secondary education or land employment.
• Transitional Living and Housing programs: One branch of the Transitional Living Services program is in place to assist youth in gaining the skills and knowledge needed to move out of Foster Care and live independently. A team of support staffers will assist young adults leaving Foster Care to learn to live independently.
• Volunteer Income Tax Assistance programs: The VITA program is in place to provide free tax help to residents with household incomes less than $54,000. Volunteers are in place to help Montanans with basic federal and state income tax returns. There is a free electronic filing service in place for most 1040 Forms.
• Assets for Independence or Family Economic Security: The AFI takes a community-based approach to helping residents out of poverty and on their way to self-sufficiency. AFI offers matched savings accounts, a plan referred to as the Individual Development Accounts, to teach the impoverished the impact that saving money can have on their self-sufficiency.

Montana Debt Statistics

Here is a look at some of the large amounts of debt that Montanans are carrying into the final quarter of 2021 and into 2022:

• Mortgage Debt: Montanans saw their average mortgage balances rise from $180,711 in 2019 to $189,021 in 2020 — a 4.6% climb. That jump in home debt was the ninth largest increase in the nation.
• Auto loan debt: The news isn’t very good either as it relates to Montana’s auto loan debt. The average amount of auto loan debt climbed from $20,046 in 2019 to $21,135 in 2020 among Montanans. That 5% increase is tied for the eighth largest jump in America. The $21,135 owed in 2020 is the 15th highest total in the country.
• Credit card debt: Things look a little better in Montana in terms of credit card debt. Montanans have, on average, just $5,482 in credit card debt — the 15ht lowest amount in the U.S. That total is well below the national average of $6,194 in 2021.
• Household debt: On average, Montanans owe $49,700. That sizable amount of debt is 96% of the money that Montana’s bring home on a yearly basis. There are 25 states in America that spent at least 90% of their annual income. Shockingly, 13 of those states spend more than they make on average.
• Student Loan debt: Collectively, Montana ranks seventh lowest in America in student loan debt at $4 billion. To put that into perspective, Californians owe $138 billion collectively. On average, Montanans owe approximately $33,300. That average amount of student debt is the 17th lowest figure in the nation.
• Credit scores: Despite their mounting problems with mortgage and vehicle debt, Montanans have done a solid job of paying their bills and keeping their credit scores up. On average, Montanans have a credit score of 710. Not only does that number rank as the 13th best in the nation, it’s significantly higher than the American average of 695.   
• Identity theft: Montana is a relatively safe state when it comes to avoiding becoming a victim of identity theft. Based on 100,000 people, there were only 228 Montanans that fell victim to identity theft. In all, only 2,439 people in Montana were victimized by identity theft — the eighth lowest number in the nation.
• Bankruptcy and foreclosures: As of September of 2021, Montana had just 278 bankruptcy filings — the fifth-lowest amount in the nation. Some 85% of those filings have been Chapter 7 with individuals wishing to be free of unsecured debts (ones not backed by collateral). As for foreclosures, Montana has the fifth-lowest rate in the country. The state had, on average, one foreclosure for every 52,027 households.