2023 Guide to Debt Consolidation and Relief in Alaska

Alaska residents have the highest per capita credit card debts in the U.S., with the average Alaskan owing $6,652 and an average personal debt of $67,670, including mortgage debt or student loans.

This means Alaskans have $1.66 in debt for every $1 of income on average.

Although it’s not the country’s highest, many Alaska residents struggle to repay their debts. If you’re one of them, here’s everything you need to know to become debt-free.

Pro tip: Alaska residents eligible for the 2023 Permanent Fund Dividend will be getting $1,312, according to the Alaska Department of Revenue. To learn more about who is eligible for the dividend and how to sign up, visit alaska.gov.

Alaska Debt Relief

Alaskans have four primary debt relief options:

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.

READ MORE: How to consolidate your credit card debt

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 Alaska, 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. 

Pro tip: 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. 

READ MORE: Is debt settlement the fastest way to get out of debt?

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

Alabama Debt Consolidation Companies

Looking for a debt consolidation agency in Alabama 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 Alaska, Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Illinois, Kansas, 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 see how much you could save.

More 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

Alaska debt settlement attorneys

  • Polaris Law Group, P.C.: North Pole, AK; polarislawgroupak.com
  • Law Office of Curtis W. Patteson, LLC: Anchorage; (907) 306-9166 www.alaskachristianlawyer.com
  • North Star Law Group: Anchorage; (907) 205-4434; www.northstarlawgroup.com
  • Ehrhardt, Elsner, & Cooley: Kenai, AK; (907) 283-2876; www.907legal.com
  • Heiser Michael P: 300 Mill St # 20, Ketchikan, AK; www.alaska-family-law-attorney.com
  • Golden Heart Law, LLC: 29 College Rd STE 5, Fairbanks, AK; (907) 474-4529; www.goldenheartlaw.com
  • Baxter Bruce & Sullivan P.C.: 9309 Glacier Hwy Suite A-201, Juneau;  (907) 789-3166; www.baxterbrucelaw.com
Eligible Debts

When seeking debt relief in Alaska, 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
Debts That Aren’t Typically Eligible
  • 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. 

READ MORE: Debt management vs. debt settlement

Nonprofit Credit Counseling Agencies in Alaska

  • Correctionist Credit Repair LLC: (907) 903-3395
  • Anchorage Credit Repair: (844) 699-4036
  • Credit Matters LLC: (800) 506-9774; www.creditmattersllc.com
  • Consumer Credit Counseling Services: 250 N Cushman St # 4B, Fairbanks, AK 99701
  • Credit Repair Today: 815 2nd Ave #123, Fairbanks, AK 99701; (907) 987-6900; www.myinvestmentsolution.com

4. 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. 

Alaskans had the fewest bankruptcy filings in 2022 with 182, but if you’re stuck and don’t see a way out of debt, it could mean a second chance and a fresh start. And you can get your financial situation in order without losing valuable possessions, like your home or car. 

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.

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

Statute of Limitations in Alaska: Three Years

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 Alaska, all debts have a three-year limit.

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.

READ MORE: State statutes of limitations

Debt Collection Laws in Alaska

Alaska residents are protected by the federal Fair Debt Collection Practices Act and the Alaska Unfair Trade Practices and Consumer Protection Act. The FDCPA prevents debt collectors from using unfair and deceptive practices when collecting a debt. which limits how and when debt collectors can contact you and places other restrictions on debt collection efforts.

Alaska’s Unfair Trade Practices and Consumer Protection Act, commonly called the Consumer Protection Act, prohibits unfair or deceptive business practices.

Examples of illegal conduct under the FDCPA include:

  • Using deception, fraud, or misrepresentation in the sale or advertisement of goods or services.
  • Engaging in false advertising
  • Misrepresenting goods or services
  • Calling people who have signed up for the national do not call registry

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.

READ MORE: How to deal with debt collectors

Where to Make a Complaint in Alaska

The Consumer Protection Unit of the Alaska Attorney General’s Office enforces consumer protection laws.

If you want to file a consumer complaint, you can download either the standard consumer complaint form or a motor vehicle complaint form.

Note that you may be asked to provide additional supporting documentation via email. Please do not send original documents.

You can also file a complaint with the Consumer Federal Protection Bureau (CFPB). The CFPB is a federal organization that enforces federal consumer financial law to foster fair, transparent practices.

Alaska Debt Statistics

Here are some other key debt statistics in Alaska:

Alaska Ranks No. 1 for Credit Card Debt

Alaskans have the highest total per capita credit card debt in the U.S., despite a higher-than-average annual salary.

Alaska averageNational average
Average salary$66,130$59,428
Median household income$80,287$70,784
Per capita household income$30,456$36,430
Household debt$67,670$59,580
Auto loan debt$24,325$22,612
Credit card debt $8,026$6,194 
Mortgage debt$248,801$236,443
Median mortgage payment (30-year fixed)$1,926$2,823 
Average student loan debt $5,480$37,338
FICO credit score717714
Average VantageScore699701
Retirement savings$503,822 $255,000
Child poverty13.845.2%
Overall poverty 10.1511.6%
Bankruptcies over one month13189,224
Foreclosures (2022)486248,170
Identity thefts reported7671,108,609 
Percentage of unbanked residents5.2%4.5%
Average credit utilization ratio29%31%

Payday Lending Status in Alaska: Legal

Alaska payday loan laws limit the industry in the state, capping the allowable principal amount and interest rates.

However, lenders can still charge triple-digit annual percentage rates (APRs).

  • Maximum loan amount: $500
  • Maximum Interest Rate (APR): 15% for each $100 borrowed (435% APR)
  • Minimum loan term: 14 days
  • Maximum loan term: N/A
  • Number of rollovers allowed: Two
  • Installment option: No
  • Finance charges: 15% of the amount advanced
  • Collection charges: NSF fees are not permitted
  • Criminal action: Prohibited

READ MORE: States where payday loans are illegal

What Happens If You Can’t Repay Your Payday Loan in Alaska

You cannot face criminal charges for being unable to repay your payday loan in Alaska. However, if a lender sues you or you receive a court order and you ignore it, a warrant may be issued for your arrest, so be sure to appear in court as scheduled.

The lender may try many different ways to contact you, including phone calls, texts and letters from lawyers.

The Alaska Department of Commerce, Community, and Economic Development enforces payday loan laws in Alaska.. It can take steps to discipline payday lenders that violate the state’s laws. This includes revoking lenders’ licenses or imposing financial penalties.

If you need to make a complaint about a payday lender in Alaska, here’s how to submit one:

  • Alaska Division of Banking and Securities
  • Address: 550 W 7th Ave #1850, Robert B. Atwood Building, Anchorage, AK 99501
  • Phone: 907-269-8140 or 888-925-2521 

Or click here to file a complaint.

Eligible Borrowers

  • Those who currently live in the state
  • People who plan to move there

Pro tip: Lenders are not required to verify a borrower’s ability to repay. You enter into an agreement at your own risk. 

Lenders must be licensed to legally operate in the state. 

Debt Resources for Alaska Residents Facing Hardship

Alaska 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:

  • Food Bank of Alaska: 2192 Viking Dr, Anchorage, AK 99501; (907) 272-3663
  • Southeast Alaska Food Bank: 10020 Crazy Horse Dr, Juneau, AK 99801; Phone: (907) 789-6184
  • Fairbanks Community Food Bank: 725 26th Ave STE 101, Fairbanks, AK 99701; (907) 457-4273
  • Food Pantry of Wasilla: 5099 E Blue Lupine Dr, Wasilla, AK 99654; (907) 357-3769
  • Chugiak Eagle River Food Pantry: 12836 Old Glenn Hwy, Eagle River, AK 99577; (907) 694-5228
  • Salvation Army Mat-Su Palmer – Food Pantry: 12271 E Palmer-Wasilla Hwy, Palmer, AK 99645; (907) 745-7079
  • Homer Food Pantry: 770 East End Rd, Homer, AK 99603; (907) 235-1968
  • Kenai Peninsula Food Bank: 33955 Community College Dr, Soldotna, AK 99669; (907) 262-3111

How to Apply for Unemployment Benefits in Alaska

You can apply for benefits at my.alaska.gov.

You will need the following information:

  • Social Security Number
  • Current address
  • Telephone number
  • Your most recent employer’s name, address, and phone number
  • Your dates of employment and the reason you are no longer working
  • Total hours worked and gross wages earned in your last week of work
  • Information about any retirement income you are receiving.
  • If you served in the military in the past 18 months, you will need to fax copy 4 of your DD214.
  • If you are not a U.S. citizen, you will need your Alien Registration Number, the type of card you have, and the expiration date.

Click here to find complete details on how to file.

State Hardship Programs

The Alaska Department of Public Assistance offers a number of programs to help people facing financial hardship. You can find details on the various programs and eligibility requirements at https://health.alaska.gov/dpa/Pages/help-cash.aspx

Other Alaska options for people experiencing financial hardship include:  

  • The Alaska Temporary Assistance Program (ATAP): This program is provided under the federal Temporary Assistance for Needy Families (TANF) block grant. It provides cash assistance and work services to low-income families with children to help them with basic needs while they work toward becoming self-sufficient. This program is provided under the federal Temporary Assistance for Needy Families (TANF) block grant.
  • Chronic and Acute Medical Assistance Program: CAMA is a state-funded program that helps needy Alaskans suffering from specific illnesses get medical care.
  • Child Care Program Office: The CCPO promotes accessibility in child care by helping families with infants, school-age child care, and children with special needs.
  • Denali Kidcare: This program provides health insurance coverage for children under age 18, as well as pregnant women who meet income guidelines.
  • SNAP: In Alaska, 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 Alaska

Annual Mean Wage (All Occupations)$68,919
Median Monthly Rent$1,240
Value of a Dollar$1.15
Cost of Living83.3
Cost of Living Rank5
Grocery Cost Index92.2
Housing Cost Index66.3
Utilities Cost Index90.4
Transportation Cost Index86.7
Miscellaneous Cost Index90.9
Source: World Population Review (updated September 2023)

The Bottom Line

Alaska is the fourth-least affordable state in the U.S., making it easy for Alaskans to rack up debt, particularly when high housing, heating and transportation costs are such a significant factor. But the state also offers a number of debt relief and hardship programs to help residents, including debt settlement and debt consolidation. If you’re struggling with debt, knowing your rights as a consumer and your options is essential. That way, you can start rebuilding your financial life without feeling overburdened by debt.

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