State law fixes the maximum rate of allowable interest. Charging an interest rate that is usurious may make the loan unenforceable and may subject the lender to criminal penalties. A. Credit accounts and loans may be opened individually and need not be taken in joint names. A credit grantor may not require a re-application for credit because of the death of or divorce from a former spouse. A. Debt consolidation agencies claim that they can pool debts and pay off a debtor's obligations with small payments over a period of time.
Some states outlaw such agencies.
Whether such agencies can actually help a debtor is questionable. Before any agreement with a debt consolidation agency is entered into, the agency should be thoroughly investigated. Some states have established free agencies to assist debtors with their credit problems.