Virginia Debt Relief: What You Need to Know + the Best Debt Consolidation Companies

A large percentage of the American population has some form of consumer debt. This includes things like credit cards, mortgages, student loans, and personal loans. In Virginia, many people struggle with large amounts of debt and high monthly living expenses. For many, this means accounts past due in collections, harassing calls from debt collectors, and other issues with their credit and financial health. If this sounds familiar, you’re not alone.

Fortunately, Virginia has several debt relief options available to those who need either immediate or long-term help. The state also has certain laws in place to protect consumers from illegal or deceptive debt collection practices.

Virginia Ranks 44th for Consumer Debt

Consumer debt is on the rise throughout the country, though many people are staying on top of their payments. Even so, the average adult consumer has around $90,460 in consumer debt. This includes all forms of consumer debt, including fixed mortgage loans and student loans. Virginia is one of the more expensive states to live in, and the higher than average debt burden of $122,273 per resident reflects that.

Other Virginia Debt Statistics

Here are some recent findings on Virginia’s debt burden and the typical credit and financial health of its residents:

  • Average credit card debt per household: $6,969
  • Average credit utilization ratio: 22%
  • Total outstanding student loan debt: $42.4 billion
  • Average student loan debt per person: $39,165
  • Percentage of mortgage accounts that are at least 90 days past due: 0.4%
  • 2020 to 2021 debt percentage increase: 2.9%
  • Average FICO credit score: 721

The Best Debt Consolidation Companies in Virginia

Looking for debt relief in Virginia? Here are some of the top debt consolidation companies in the state.

True Debt Solutions, Inc. – Reston

True Debt Solutions offers credit and debt counseling to Virginians struggling with high-interest consumer debt. The company primarily focuses on helping individuals understand and repair their credit. It also offers some guidance on things like debt management and budgeting. On BBB it has an A+ rating.

  • 8811 Sudley Rd Ste 213, Manassas, VA, 20110-4750
  • (703) 392-6171
  • Rating: 8.94/10

Northern Star Credit Union

Northern Star Credit Union is a nonprofit financial institution that’s committed to helping people manage their finances and improve their credit. Members benefit from a variety of financial services, including unsecured personal loans, home equity lines of credit, a second mortgage, and standard checkings and savings accounts. Those who qualify for a HELOC or personal loan can use the funds to consolidate high-interest debts. To apply for membership, you must be a resident of Portsmouth, Suffolk, Hampton, Chesapeake, Newport News, Virginia Beach, or Norfolk.

On BBB, Northern Star Credit Union is accredited with an A+ rating. It has 3.2/5 stars on Google.

New Fidelity Funding

New Fidelity Funding emphasizes people-first solutions to debt management and relief. It’s not a direct lender, but rather a loan service. It works with several trusted partners, including OneMain Financial, Upgrade, SoFi, and Upstart, to help people with their debts. Through New Fidelity, individuals with good credit can apply for a personal or debt consolidation loan. The application and funding process is simple, hassle-free, and fast.

Money Management International, Inc.

Money Management International has been helping people across the nation find debt relief since 1997. Its goal is to help people find debt relief through personalized solutions like debt management plans, bankruptcy support, and credit card repayment. Money Management also has a large library of free financial education resources for those who want to improve their credit and money habits. It has 4.6 stars on Google and an A+ rating on BBB.

MKL/Starr Productions, Inc.

MKL/Starr Productions has several locations across the country, including one in Virginia. It offers debt relief through debt consolidation. On BBB, it has an A+ rating.

  • 3174 Golansky Blvd #202 Woodbridge, VA, 22191
  • (301) 627-2476
  • Rating: 9.5/10

How Can I Get Help Paying My Bills in Virginia

Virginia has a large number of programs and nonprofit agencies dedicated to those who need help in a financial crisis. Some of these programs are funded by the state or local community, while others are federally-funded. In general, they can help with things like:

  • General bill payments (including utility bills or rent)
  • Medical expenses
  • Legal issues
  • Dealing with debt collectors

For those who need help paying their utility bills, here are the best options:

  • Low-Income Home Energy Assistance Program (LIHEAP): This is a federally-funded program that helps low-income households with their energy costs. It’s part of the Office of Community Services, which works with different states and communities throughout the country to provide economic security and help reduce poverty rates. Contact them here: (804) 726-7386.
  • Virginia Department of Housing and Community Development: Another weatherization assistance program, this one is geared toward low-income families. It helps eligible households by installing energy-saving solutions that reduce the overall cost of cooling and heating.
  • Citizens Energy Oil Heat Program: For those who fall below a certain income limit, this program offers discounted home heating oil solutions. Its goal is to aid vulnerable populations by providing them warmth and offsetting their energy costs. It also has several other assistance programs.
  • U.S. Department of Housing and Urban Development: HUD’s goal is to make homes more energy-efficient throughout the country. It offers low-cost and free weatherization services, financial aid for home repairs, help with utility bills, and more.

Even if you don’t need help with utility payments, other programs and services could help. These include:

  • Virginia Legal Aid for those who need low-cost or pro bono legal assistance.
  • Local agencies and community clinics provide free or low-cost healthcare to low-income or uninsured residents. This includes general checkups, dental, and other medical care. Check around for prescription medication discount cards and other services.
  • Energy Assistance for low-income individuals and families who need help paying energy bills.
  • The Virginia State Employee Loan Program, which provides low-interest loans to state employees. These loans are small – usually between $100 and $500 – but can help in a pinch.
  • The Department of Housing and Community Development is an organization that coordinates various housing programs and can help with rent payments.

Finally, if you need help finding nutritious food for yourself or your family, Virginia has tens of thousands of food banks and centers. Some of the bigger ones are:

Virginia Peninsula Foodbank

  • 2401 Aluminum Ave Hampton, VA 23661
  • (757) 596-7188

Fredericksburg Regional Food Bank

  • 3631 Lee Hill Drive Fredericksburg, VA 22408
  • (540) 371-7666

Foodbank of Southeastern Virginia and the Eastern Shore

  • 800 Tidewater Dr. Norfolk, VA 23504
  • (757) 627-6599

Feeding Southwest Virginia

Main Office & Salem Distribution Center

  • 1025 Electric Rd Salem, VA 24153
  • (540) 342-3011

Feed More, Inc.

  • 1415 Rhoadmiller St. Richmond, VA 23220
  • (804) 521-2500

Capital Area Food Bank

  • 6833 Hill Park Drive Lorton, VA 22079
  • (703) 541-3063

Blue Ridge Area Food Bank

  • 96 Laurel Hill Road P.O. Box 937 Verona, VA 24482
  • (540) 248-3663

Consumer Information

The Virginia State Corporation Commission (SCC) is Virginia’s primary agency, which has the authority to regulate businesses and economic interests within the state. Its Bureau of Financial Institutions oversees financial entities – i.e., payday lenders and other short-term lenders.

The SCC also has the authority to establish and enforce additional rules, regulations, and laws. This includes Title 6.2 of the Code of Virginia, which applies to short-term lenders specifically.

Their main contact page includes services and information on the following:

  • Existing businesses, LLCs, and more
  • State-chartered financial institutions
  • Public utility regulation (ex. gas, water, electric, sewer, and telecommunications)
  • Different forms of insurance (ex. life and health insurance policies)

Where to Make a Complaint

If you need help dealing with a short-term lender or feel you’re being harassed by debt collectors, file a complaint with the Virginia State Corporation Commission’s Bureau of Financial Institutions. Here’s how to get in touch with them:

  • Regulator: Virginia State Corporation Commission
  • Physical Address: 1300 E. Main Street, Richmond, Virginia 23219
  • Mailing Address: P.O. Box 640, Richmond, Virginia 23218
  • Phone: 804-371-9657
  • Email: bfiquestions@scc.virginia.gov
  • Primary website: https://www.scc.virginia.gov/pages/File-Complaint-Consumers

Also, submit a complaint to the Consumer Financial Protection Bureau (CFPB). This is a federal agency that protects consumers from predatory financial institutions, including short-term payday lenders.

Debt Collection in Virginia

Every state benefits from the Fair Debt Collection Practices Act (FDCPA), including Virginia. This public law exists to try to stop and eliminate any illegal, abusive, or fraudulent debt collection practices by debt collectors and third-party agencies.

State Protections

Within the state of Virginia, there are also certain consumer protections and laws in place. These exist to keep debt collectors from engaging in unfair or illegal debt collection practices.

Under the Virginia Code, for example, debt collectors cannot send any documents that imitate the legal process to collect payment. If they’re caught doing this, they could be found guilty of a Class 4 misdemeanor and fined up to $250. However, they cannot be sued for this violation (Va. Code Ann. § 18.2-213). LIS Virginia Law has more information about the Virginia Debt Collection Act and how – and who – it protects.

If you have a complaint about a debt collector, possible fraud, or another violation of the FDCPA or Code of Virginia, file it with the Federal Trade Commission (FTC). The FTC’s main purpose is to protect consumers from deceptive, fraudulent, or illegal practices through regulating businesses, advocacy, law enforcement, and education.

What is the Statute of Limitations on Debt in Virginia?

The statute of limitations is the time in which a debt collector can legally start a lawsuit to try to collect on any outstanding debts. Once it expires, the debt collector can no longer pursue legal measures. In most cases, the court also cannot require you to pay your balance.

Virginia has different statutes of limitations, depending on the consumer debt. These are:

  • Auto Loans: 4 years
  • Credit cards, medical debt, and mortgages: 5 years
  • State tax: 7 years
  • Oral agreements: 3 years

Filing for Bankruptcy in Virginia

There are two primary types of personal bankruptcy:

  • Chapter 7: Most of the debtor’s assets are liquidated (sold) to repay their creditors. It usually takes around 6 months to complete. Afterward, the court will discharge most remaining debts.
  • Chapter 13: The debtor can keep their assets, but they must set up a repayment plan with their creditors. This usually takes 3 to 5 years. During this time, the debtor’s spending will be closely monitored by a court-appointed bankruptcy trustee.

The type of bankruptcy filed primarily depends on the individual’s income. To qualify for Chapter 7, for example, you must pass a Means Test.

Even if you file a Chapter 7 bankruptcy, you may benefit from a few exemptions under Virginia law. These include:

  • Homestead: Up to $25,000.
  • Health savings accounts: Up to the full amount.
  • Motor vehicles: Up to $6,000.
  • Miscellaneous: Up to $24,000 for surviving spouses and descendants (if they’re minors).
  • Pension and retirement benefits: Most are exempt, though there are some restrictions.
  • Personal property: Up to $5,000 for furnishings, $5,000 for heirlooms, $3,000 for firearms, and $1,000 for apparel.
  • Pets: Pets not kept or raised for sale or profit are also exempt.

Go here for a complete list of exemptions.

Payday Lending Laws in Virginia: Legal

  • Maximum loan amount: $2,500
  • Maximum Interest Rate: 36%
  • Minimum loan term: 4 months unless your monthly payment is less than 5% of your gross monthly income or 6% of your net monthly income.
  • Maximum loan term: 24 months
  • Number of rollovers allowed: N/A
  • Number of outstanding loans allowed: One
  • Cooling-off period: N/A
  • Finance charges: Monthly maintenance fee equal to either $25 or 8% of your principal balance (whichever is less).
  • Collection charges: $25 nonsufficient funds (NSF) fee. Late fee after seven days equal to 5% of the missed payment (caps out at $20).
  • Criminal action: Prohibited

How to File for Unemployment in Virginia

Virginia residents who are fully or partially unemployed may be eligible for certain unemployment benefits.

To apply, contact the VEC Customer Contact Center or fill out an online application. Be prepared with the following:

  • Your full name
  • Contact information
  • Information regarding your recent employer(s)
  • Bank account information (for direct deposit)

Eligibility for benefits depends on a few factors, such as your earned wages and the reason for unemployment. Most people are only entitled to benefits for up to 365 days from the date of their claim. For more information, go to the Virginia Employment Commission.

The Bottom Line

Whether you’re seeking debt relief in Virginia or need to file a complaint about potentially deceptive lending practices, you have options. These include things like debt consolidation, credit counseling, and contacting a local or federal agency to help with bill payments.

Even if you don’t currently need debt relief or financial assistance, it never hurts to educate yourself on your rights — and options — as a consumer. That way, you’ll be prepared if ever the need arises.

Virginia Debt Statistics

Total Debt$27,825,929
Debt Per Capita$3,226
Debt Per Capita Rank25

Source: World Population Review

Virginia Credit Card Debt Statistics

Average Credit Card Balance$6,969
Average Credit Score721
Avg Credit Card Balance Rank (1 = Highest Balance)4
Avg Credit Score Rank (1=Highest Score)23

Source: Experian

Mortgage Debt in Virginia

Mortgage Debt Per Capita$47,500
Average 30 year Mortgage Rate6.2%
Average 15 year Mortgage Rate5.2%
Median Home Value$288,800
Avg Outstanding Mortgage Debt$269,570
Difference Between Value and Mortgage Debt$19,230
Avg Homeowner FICO Score718

Source: Federal Reserve, Value Penguin, Experian

Payday Loan Debt in Virginia

Payday Loan Legal StatusLegal
Max Payday Loan Amount$2,500
Max Payday Loan Term30 days
Max Payday Loan APR36%

Source: Virginia Government Website

Unemployment and the Economy of Virginia

Poverty Rate – Population11.50%
Poverty Rate – Population – Rank44
Poverty Rate – Family8.20%
Poverty Rate – Family – Rank39
Unemployment Rate (March 2020)3.3
Unemployment Rank13
GDP Growth2.7
GDP Growth Rank5

Source: US Census, Bureau of Labor Statistics

Student Loan Debt in Virginia

Percent of Population with Student Loans56%
Average Student Loan debt$29,887
Average Debt of New Graduates (2017-18)$30,363
Average Debt Ranknan
Percent of Graduates with Debt (2017-18)57%
Percent with Debt Ranknan
Usable Institutions (BA-Granting)32
Percent of Graduates at Schools with Usable Data92%
Nonfederal debt of graduates, as percent of total debt26%
Fall enrollment – Undergraduate total (IPEDS)461,128
Tuition and Fees (in-district/in-state)$14,318
Total Cost of Attendance (on-campus)$32,662
Percent of Institutional Grants that are Need-Based72%

Source: Value Penguin, TICAS

Cost of Living in Virginia

Annual Mean Wage (All Occupations)$68,018
Median Monthly Rent$1,452
Value of a Dollar$0.97
Cost of Living103.7
Cost of Living Rank27
Grocery Cost Index99.6
Housing Cost Index111.8
Utilities Cost Index99.3
Transportation Cost Index99.4
Miscellaneous Cost Index100.5

Source: World Population Review