2024 Guide to Debt Consolidation and Relief in Kansas- Credit Summit

Kansans have fared pretty well when it comes to debt, with below-average credit card and non-mortgage debt totals,

But that doesn’t mean families aren’t struggling. Many households in the Sunflower State are still struggling to repay debt. If you’re one of them, here’s everything you need to know to become debt-free.

How to Become Debt-Free in Kansas

There are four primary ways to get out of debt:

1. Debt Consolidation Loan

Works best for: People with 670+ credit scores

Debt consolidation loans involve using a new, larger loan to pay off your other unsecured debts, including credit cards. A debt consolidation loan should typically have a lower interest rate than your current debts to be effective.

This leaves you with one monthly payment and one creditor, saving money and simplifying your payments.

2. Debt Consolidation Company / Debt Consolidation Program

Works best for: Anyone with more than $10,000 in unsecured debt who is struggling to make their payments and wants to avoid bankruptcy

Debt settlement involves negotiating with creditors to repay less than the total amount they owe, sometimes as a lump sum and sometimes as a longer-term payment plan.

In Kansas, debt settlement can help you pay off different forms of consumer debts, including:

Credit cards/lines of credit
Personal loans
Department store cards
Old judgments
Student loans in default
Other unsecured loans or debts

To make debt settlement work, you must stop paying your debts for three to six months until your creditor charges off the debt. This will damage your credit score but will incentivize the creditors to negotiate. Once settlements are reached, and payments are made, your credit score will rebound.

The average debt settlement customer ends up debt-free while paying about 75% to 80% of the total enrolled in the program after all fees are paid.

Debt Settlement Risks

Your creditors aren’t obligated to settle
If a creditor refuses to settle, you could end up having to pay accrued interest and late fees
Missed payments will show up on your credit report
You may have to report the forgiven amount as income tax to the IRS

Kansas Debt Consolidation Companies

Looking for a debt consolidation agency to help you get a handle on debts? Here are a few firms that could help:

Best Overall: DebtHammer

DebtHammer helps borrowers overwhelmed by unsecured debts ranging from payday loans and tribal loans to credit cards and medical bills.

After a free consultation to review your situation, the DebtHammer representative will offer you a menu of options. You will decide on the course of action you prefer. These options may include debt settlement, debt consolidation, bankruptcy or others. DebtHammer requires a minimum debt of $7,500 for program enrollment or $1,000 in payday loans. The company charges 25% of the total enrolled debt.

READ MORE: DebtHammer review

Though based in Texas, DebtHammer currently provides solutions to residents of Kansas, Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Illinois, Louisiana, Maine, Massachusetts, Michigan, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wyoming. Some service options may not be available in all states.

Click here to schedule a free consultation.

More Kansas Debt Relief Companies

Alleviate Financial Solutions 4 Park Plaza Suite 1500, Irvine, CA 92614 (800) 308-2935; alleviatefinancial.com
Guardian Litigation Group: 17922 Fitch Suite 150, Irvine, CA 92614 (949) 312-4226; guardianlit.com
New Era Debt Solutions: 330 Wood Rd., Suite B Camarillo, CA 93010 (805) 303-8773; neweradebtsolutions.com
Global DS 675 W Indiantown Rd. Jupiter, FL 33458-7555, (866) 677-5044; globaldsgroup.com
InCharge Debt Solutions: Orlando, FL (800) 565-8953; incharge.org
Golden Financial Services Debt Settlement Corporation: Lake Worth, FL, (619) 600-5189; goldenfs.org
National Debt Relief 180 Maiden Ln 30th floor, New York, NY 10038 (800) 300-9550; nationaldebtrelief.com
DebtBlue: 1125 E Campbell Rd Suite 200, Richardson, TX 75081 (855) 269-9462; try.debtblue.com

Kansas Debt Settlement Attorneys

W M Law Olathe Office: 15095 W 116th St, Olathe, KS; (913) 422-0909; kansascitybankruptcy.com
Kansas Bankruptcy Center: 300 W Douglas Ave Ste 425, Wichita, KS; (316) 613-0952; www.kansasbankruptcycenter.com
Jordan Schwartz Law Office: 10955 Lowell Ave # 630, Overland Park, KS; (913) 642-4529; www.lawofficeofjordanschwartz.com
Steinwart Law Office, LLC: 8000 Foster St, Overland Park, KS; (913) 648-3220 ext. 3046; www.steinwartlaw.com
Patton & Dean, LLC: 8643 Hauser Ct #235, Lenexa, KS; (913) 203-4786; www.pattondean.com
Watton Law Group: 1201 Walnut St Suite 435, Kansas City, MO; (816) 750-2388; www.wattongroup.com
Kansas Bankruptcy Ladies: 300 W Douglas Ave STE 600, Wichita, KS; (316) 262-7696; milbylaw.com
John R. Hooge Attorney at Law, P.A.: 2619 W 6th St # D, Lawrence, KS; (785) 842-1138; www.johnhoogelawoffice.com
Garrett Law LLC: 1100 SW Wanamaker Rd #103, Topeka, KS; (785) 276-9300; www.garrettlawllc.com
Attorney Broc E. Whitehead: 310 W Central Ave #211, Wichita, KS; (316) 263-6500; brocwhitehead.com
Prelle Eron & Bailey, P.A.: 301 N Main #2000, Wichita, KS; (316) 262-5500; www.eronlaw.net
Phillips & Thomas LLC: 5251 W 116th Pl suite 200, Leawood, KS; (913) 385-9900; phillipsandthomas.com
Wiesner & Frackowiak, LC: 6750 93rd St #220, Overland Park, KS; (913) 642-2240; www.wflaw.net
Coons and Crump, LLC: 534 S Kansas Ave Suite 825, Topeka, KS; (785) 783-2360; www.coonscrump.com
Mack & Associates, LLC: 2850 SW Mission Woods Dr Suite 102, Topeka, KS; (785) 274-9040; www.kansasjustice.com

Eligible Debts

When seeking debt relief in Kansas, it’s important to note that not all types of debt are eligible. Debts that can be included in the state’s debt settlement programs include:

Credit cards
Department store cards
Signature loans
Personal lines of credit
Old repossessions
Other unsecured debts
Old judgments
Private student loans in default

Ineligible Debts

Debts that don’t typically qualify for debt settlement include:

Home mortgages
Federal student loans
Car loans
Other secured debts
Credit Union debts
Medical bills

3. Debt Management

Works best for: People with primarily credit card debt. Many credit counseling agencies work exclusively with credit card debt (and thus won’t be a help if you need to consolidate medical bills or student loans)

A debt management program will usually reduce the interest rates on your credit cards from the current average of about 20% to somewhere around 9%. This will lower your monthly payment. However, unlike debt settlement, you will repay the full amount you owe, plus a lower amount of interest. The program usually takes 3-5 years to complete.

Pro tip: It’s important to note that only 55% to 70% of customers who enroll in DMPs successfully complete the program. If you enroll in a Debt Management Plan but don’t complete it, your financial situation could worsen.

So, for example, if you had $5,000 in credit card debt and were paying 25% interest, your monthly interest rate would be $105. If you reduce the interest to 8%, you’ll pay $33 a month in interest. That’s a $72 savings that you could apply to reducing your debt and paying it off faster.

These programs are usually set up and administered by nonprofit credit counseling agencies.

Like with debt settlement, debt management does not involve a loan. Credit scores won’t matter. But if you default on payments, your creditor could raise the interest rate back to its original amount.

Credit Counseling Agencies in Kansas

Consumer Credit Counseling Services: 8826 Santa Fe Dr, Overland Park, KS; (913) 642-5393
Kansas Counselors Inc: 10561 Barkley St Ste. 210, Overland Park, KS; (913) 541-9704; www.kcikc.com
Turning Point Credit Group: 7500 W 151st St #23337, Overland Park, KS; (833) 469-8876
Kansas City Credit Services Inc: 2016 Swift St, North Kansas City, MO; (816) 421-8001; www.kccreditservices.com
Credit Advisors Council – Credit Repair Kansas City: 8700 Monrovia #310, Lenexa, KS; (913) 353-4006; www.creditadvisorscouncil.com
Legends Credit Repair: 10300 W Central Ave, Wichita, KS; (913) 297-3328

Bankruptcy

Works best for: People who can see no other way to get out of debt within the next five years, who’ve already suffered significant credit score damage or who’ve tried one or more of the other options and failed

There are two types of bankruptcy:

Chapter 7: Your non-exempt assets are liquidated by a court-appointed trustee and the money is used to repay your debts. Some assets are exempt, including Social Security, your home, pensions and your car.
Chapter 13: You keep your assets but are on a payment plan to make regular payments toward your debt. All of the repayments go through your bankruptcy trustee.

In Kansas, to pass the Chapter 7 means test, you must:

Have a total monthly income of less than $7,475
If your total monthly income is over $12,475, you aren’t eligible for Chapter 7
If your income falls between the two numbers, other factors will need to be calculated

Kansas Bankruptcy Exemptions

Homestead: Up to one acre in the city and 160 acres of farmland
Personal property: Furnishings, equipment, and supplies owned and needed at the principal residence for up to one year; $7,500 in books, documents, and livestock/plants needed for work; jewelry up to $1,000
Vehicle: $20,000 if used for transportation to work
Wages: 75% of disposable earnings or 30 times the federal minimum wage, whichever is higher
Pension/retirement: Benefits and federal government pensions needed for support and paid within three months of filing bankruptcy

Debts that Aren’t Discharged by Chapter 7 Filings

Nondischargeable debts include alimony and child support, some taxes and fines, some student loans, debts for death or injury caused by driving while intoxicated, and any debts you fail to disclose in your bankruptcy petition.

Bankruptcy will stay on your credit report for seven to ten years and could knock your credit score down by as much as 200 points.

However, that does not mean you won’t be able to borrow money for that entire period. As years pass, lenders will be more forgiving and you’ll have a better shot at loan approval.

READ MORE: Types of bankruptcy explained

What is the Statute of Limitations on Debt in Kansas?

The statute of limitations is how long a creditor can take you to court to collect unpaid debts. This period begins as soon as you miss the initial payment on a debt that’s due. In Kansas, the amount of time depends on the type of debt you have:

Oral agreements: 3 years
Written contracts: 5 years
Promissory notes: 5 years
Open-ended accounts: 3 years

Auto loans have a statute of limitations of four years and state tax debts have a limit of ten years.

Contact: Kansas Attorney General Office.

After the statute of limitations expires, the debt becomes “time-barred.” This means the original creditor can no longer collect on it. At this point, the court can’t order you to repay the debt either. Debt collectors also can’t garnish your wages or place a lien on your car or home.

You’ll still legally owe these debts. Also, debt collectors can still contact you via phone or letter to get you to pay.

Debt Collection Laws in Kansas

The federal Fair Debt Collection Practices Act provides protections guaranteeing that debt collectors treat Kansas residents fairly. These laws will not, however, forgive any legitimate debt you owe. Kansas does not have any additional state laws or statutes to supplement the FDCPA. However, the state’s Consumer Protection Division will help consumers with debt collection issues.

Under the FDCPA, neither creditors nor debt collectors can:

Use deceptive, abusive, fraudulent, or manipulative tactics to collect debts.
Use force or violence to get borrowers to pay their debts
Contact a borrower’s employer about a past-due account unless a prior agreement was made or they have a judgment
Sell or otherwise disclose private information to a third-party agency
Harass borrowers at home or work about the debt
Contact borrowers outside of standard business hours (9:00 p.m. to 8:00 a.m.) without consent
Intentionally misrepresent information

You have the right to contact a debt collector and tell them to stop contacting you, but it must be done in writing.

Debt collectors and creditors must also provide written notification with details relating to the debt within five days of contacting the borrower. If you’ve been contacted about a debt you might not owe, you have 30 days to dispute it with a debt verification letter. In the letter, write that you don’t owe the debt and that they must provide written proof before anything else happens. However, if the collector sends you proof that you owe the debt, the debt collector is allowed to resume collection efforts.

If you owe several debts, any payment you make must be applied to the debt you choose. A debt collector is not allowed to apply your payment to any debt you believe you do not owe. If you believe the law was violated, you have the right to sue a debt collector in a state or federal court.

Where to Make a Complaint in Kansas

The Kansas Office of the State Bank Commissioner is the best place to register a complaint about illegal payday lending activities within the state. Here’s the contact information:

Regulator: Kansas Office of the State Bank Commissioner – Division of Consumer & Mortgage Lending
Address: 700 SW Jackson St #300, Topeka, KS 66603
Phone: 785-380-3939 or 1-877-387-8523 (toll free)
Link to website: https://www.osbckansas.org/consumers/file-a-complaint

Consumers can also submit a complaint to the Consumer Financial Protection Bureau (CFPB). They are the federal government’s organization dedicated to helping consumers with financial issues, including problems with payday lenders.

READ MORE: How to deal with debt collectors

More Kansas Debt Statistics

	Kansas average	National average
Average salary	$52,850	$59,428
Median household income	$64,521	$70,784
Per capita household income	$34,968	$36,430
Unemployment	2.8%	3.5%
Household debt	$43,440	$59,580
Auto loan debt	$22,551	$22,612
Credit card debt	$5,769	$6,194
Mortgage debt	$159,660	$236,443
Median mortgage payment (30-year fixed)	$1,446	$2,823
Average student loan debt	$32,578	$37,338
FICO credit score	721	714
Average VantageScore	695	701
Retirement savings	$452,703	$255,000
Child poverty	13.94%	5.2%
Overall poverty	12%	11.6%
Bankruptcies in 2021	627	89,224
Foreclosures (2022)	78	248,170
Identity thefts reported	5,651	1,108,609
Percentage of unbanked and underbanked residents	23.8%	25.6%
Average credit utilization ratio	23%	31%

Payday lending status in Kansas: Legal

Maximum loan amount: $500
Maximum Interest Rate (APR): 782% (on a 7-day loan)
Minimum loan term: Seven days
Maximum loan term: 30 days
Number of rollovers allowed: None
Number of outstanding loans allowed: Two per lender
Cooling-off period: Lenders can’t give more than three loans to any one borrower within 30 days
Finance charges: 15% of the amount of the cash advance. Late charges no more than 3% per month for balances outstanding after the maturity date.
Collection fees: One non-sufficient funds (NSF) fee up to $30
Criminal action: Prohibited

The payday loan trap is rooted in high interest rates, short repayment terms, and consistent rollovers. When borrowers don’t have enough time to come up with their massive loan payments, they pay an indefinite series of fees or take out another loan to push back the due date and stay afloat.

Unfortunately, the Kansas payday loan laws do virtually nothing to prevent this trap. Feel free to take a look at the original legislation for more details.

Debt Resources for Kansans Facing Hardship

Kansas offers a variety of local and state programs for residents looking for help with debt or finances. Among other things, these resources can provide low-cost or free childcare, job-related education and training, healthcare, and legal aid. Some programs can also help with the cost of rent or utilities.

Some of the main food banks in the state include:

Kansas Food Bank: 1919 E Douglas Ave, Wichita, KS; (316) 265-3663
Giving Hope Food Pantry: 6640 State Ave, Kansas City, KS; (913) 291-9031
Kansas Food Bank – Independence: 307 W Pecan St, Independence, KS; (620) 331-0181
Salina Emergency Aid / Food Bank: PO Box 1482, 255 S. Chicago. Salina, KS; (785) 827-7111

How to Apply for Unemployment Benefits in Kansas

You should file for unemployment as soon as you become unemployed, but you cannot file until your final workday has been completed.

When filing a new application, you will need the following information:

Social Security number
Full mailing address
Phone number
The name and mailing address of your last employer
The date you began and stopped working for each employer for the last 18 months, and why you left each job
The county in which you reside
Driver’s license number
If you are not a U.S. citizen, your employment authorization number and expiration date
If you were active duty military within the past 18 months, your DD-214, Member #4 form
If you were a federal employee, your Standard Form SF-50 or pay stub
Any separation, vacation, or holiday pay you have received or will receive in the future.

Learn more here.

State Hardship Programs

The Kansas Department of Labor offers a number of programs to help people facing financial hardship.

Some of the programs include:

The Kansas Emergency Rental Assistance (KERA) Program: Rent, utility, and internet assistance to households experiencing financial hardship as a result of the COVID pandemic.
Emergency Broadband Benefit: The benefit provides up to $50/month discount for broadband services; up to $75/month discount for households on qualifying tribal lands; and a one-time discount of up to $100 for a laptop, desktop computer, or tablet purchased through a participating provider.
Emergency Water Assistance Program: This is a federally funded program that is being administered for Kansas residents by the Kansas Department for Children and Families. The program’s sole focus is to restore or prevent disconnection of water to Kansas households.
Home Weatherization Program: Reduces energy costs and improves comfort for income qualified households by increasing the energy efficiency of their homes, while ensuring their health and safety.
CHIP: Children’s Health Insurance Program is designed to help low-income families obtain affordable health care for their children. It includes certain services, like medicine and hospital care.
TANF: The Temporary Assistance for Needy Families (TANF) program provides temporary financial assistance for pregnant women and families with one or more dependent children. TANF provides financial assistance to help pay for food, shelter, utilities, and expenses other than medical.
SNAP: SNAP is available to help low-income households subsidize their food costs. Apply for a reloadable card and use it like you would a debit card at most grocery stores.
WIC: The Women, Infants and Children program is designed to help certain people, including low-income women with young children, afford food costs. Most people who qualify for SNAP or TANF benefits also qualify for this program.
LIHEAP: The Low-Income Home Energy Assistance Program is federally funded and helps income-qualified families with heating and cooling costs.
CAFCP: The federal Child and Adult Food Care Program reimburses eligible organizations and daycare home providers for nutritious meals served in care settings. The program is administered by the U.S. Department of Agriculture.

Cost of Living in Kansas

Annual Mean Wage (All Occupations)	$60,152
Median Monthly Rent	$863
Value of a Dollar	$1.11
Cost of Living	86.5
Cost of Living Rank	48
Grocery Cost Index	91.7
Housing Cost Index	72.6
Utilities Cost Index	100.2
Transportation Cost Index	97.3
Miscellaneous Cost Index	88.4

Source: World Population Review (updated October 2023)

The Bottom Line

Kansas residents are in better financial shape than most Americans, with lower-than-average debt and a low cost of living. But if you’re struggling to make your monthly payments or are facing an unforeseen hardship, you still have plenty of options.

2023 Guide to Debt Consolidation and Relief in Kansas