Hawaii Debt Relief

In a Nutshell

The Aloha State is envied for its scenic beauty and warm weather, especially throughout the winter months. This makes it a leading tourist destination that Americans with a high disposable income frequently visit.

However, the people of Hawaii, like many other parts of the world, have been affected by the same financial hardships as those residing on the U.S. mainland. As a result, many Hawaiian residents are seeking debt relief. 

Hawaii has a high cost of living, largely influenced by the prices of common basic needs like transportation, food, and health care. This causes many residents to accumulate debt at a faster rate than a lot of continental citizens, making economic relief essential. 

Fortunately, various debt relief options are available for those struggling with debt in Hawaii. Top options include debt consolidation and debt settlement, as well as bankruptcy and credit counseling. Whether you're dealing with credit card debt, medical bills, or other forms of financial obligations, keep reading to learn more about the most effective debt relief options in Hawaii.

Hawaii’s Economic Picture

Hawaii's economy squeezes residents as they struggle to cope with a severe housing shortage that has increased home values to all-time highs. Despite a median household income of nearly $100,000, Hawaii's high cost of living, compared to their wages, has left many residents in need of debt relief solutions.

“Hawaiians have struggled with the high cost of living for decades,” shares Brad Reichert, debt expert and founder and managing director of Reichert Asset Management LLC. “This small string of volcanic islands in the middle of the Pacific Ocean needs to have anything it can’t grow or produce on its own flown in by air or shipped in by sea, adding a significant cost to these products. As a result, the cost of living index in Hawaii has been steadily increasing,” explains Reichert. 

How Does Debt Relief Work in Hawaii?

Hawaii debt relief options ensure that you get a fresh start from debt. Solutions include negotiating for lower interest rates, obtaining waivers for late payment fees, debt cancellation and forgiveness, and reducing your monthly payments. The goal of debt relief is to ensure that your debt is cleared as soon as possible, thus increasing your disposable income and getting you back on track to a positive net worth and a better chance for a successful retirement.

Hawaii Debt and Finance Statistics

The following statistics specific to the state of Hawaii can help form a better picture of the debt burdens Aloha State residents carry:

Average Consumer Debt

Hawaiians carry an average consumer debt of $148,924. This number includes the total amount of mortgage debt, student loans, auto loans, and credit card debt that a household may carry at any given time. 

Increasing consumer debt is a reflection of the nation’s total consumer debt, which grew to $17.94 trillion in Quarter Three of 2024.

Credit Card Debt

Hawaiians have an average credit card debt of $8,798, one of the highest in the nation. This could be attributed to residents charging more on credit to make up for the elevated cost of living. 

Student Loan Debt

Across the islands, 35.5% of the Aloha State's population has attained a bachelor’s degree or higher.

Hawaii’s average student debt is $38,683, adding up to $4.7 billion in total.

Bankruptcy

The rate of bankruptcy in Hawaii dropped for over a decade, with a recent uptick in 2024 with 1,172 bankruptcy cases filed. This represents a 12.9% increase from the number of bankruptcies filed the previous year. 

Average Income and Employment

Hawaii's median household income is $98,317, while the per capita income is $44,823 per person.

Unemployment in Hawaii trends well below the national average at 3% in December of 2024. 

Credit Scores

Hawaiians carry an average credit score of 719, a strong score that's adequate for accessing lower-interest loans. This is one of the higher scores among all 50 states, placing the average Hawaiian’s credit score in the “good” category.

How TurboDebt’s Hawaii Debt Relief Program Helped Residents in 2023

Our professional team worked with 1,712 Hawaiian clients in 2023. Out of this, we enrolled 581 Hawaiian residents in our debt relief program, helping them work to achieve a debt-free life. The average enrolled debt was $27,247 per person, and the total enrolled debt came to $15,830,240. 

TurboDebt’s experts saved our clients a whopping 52.45% of the total debt enrolled before fees!

Top Types of Debt to Get Relief from in Hawaii

In general, the top types of debt that we see Hawaii residents enroll in our program are as follows:

Credit Card Debt

Hawaii's exceedingly high cost of living makes it difficult for many residents to afford anything beyond necessities. Charging basic needs on a credit card has become an unfortunate reality across the nation as rising inflation makes everything from energy bills to groceries even more expensive than they would ordinarily be in Hawaii.

At TurboDebt, we’re passionate about eliminating credit card debt through our tailored debt relief program. We help you plan for consistent monthly payments to clear your credit card debt in as little as two years. This process helps you to avoid the compounding effect of interest rates or the accumulation of late payment fees.

Divorce Debt

Hawaii is an equitable distribution state in cases of divorce, meaning that debts and assets are distributed between spouses in a “fair and equitable” manner, regardless of who originally owned them. This might result in you owing divorce debt if your spouse had accumulated personal debt before or during your marriage.

Our debt relief program helps you tackle outstanding costs from divorce through a debt settlement plan. Our experts will negotiate for a reduction of your divorce debt, making it more manageable for you to pay off outstanding costs after ending your marriage.

Business Debt

According to a report from the Small Business Credit Survey, 53% of business owners have used their own money to support their companies. This puts over half of small business owners at risk of personal debt to keep their company successful.

TurboDebt is dedicated to navigating business debt through a debt management plan. Take advantage of our free consultation now to learn more about how you can live a debt-free life by enrolling your business debt.

Medical Debt

Although the uninsured rate in Hawaii is among the lowest in the country at 4.3%, 29.8% of adults forgo mental health treatment due to health care costs averaging $9,593 per person.

The state also enforces a medical debt policy that allows spouses to inherit medical debt and debt collection agencies to initiate foreclosures and wage garnishments. This is an example of how easy it is to accumulate medical debt in Hawaii should a loved one die from an illness.

Working with TurboDebt to eliminate medical debt can be an effective option for Hawaiians struggling to pay exorbitant medical bills. Let us help you create a customized debt relief option to reduce your medical debt and get you back on track to building your wealth.

Retirement Debt

Retiring in Hawaii is an expensive prospect. Ranking as the state with the highest cost of living, you'll need over $91,000 to retire comfortably, according to estimates compiled by GoBankingRates.

Living on a fixed income can be a challenge for retirees in the Aloha State, making debt relief a viable option for those struggling to pay outstanding balances. TurboDebt helps residents of Hawaii manage retirement debt through our customized debt relief program.

Hawaii Debt Relief Options

Debt relief options for residents of Hawaii include the following:

Debt Management Programs

Debt management programs (DMPs) involve setting up a planned monthly payment to pay off creditors through a third-party organization that’ll help you organize and maintain your payment plan. Typically, under a DMP, you’ll have to agree to close your credit cards to avoid accumulating additional debt during the time you’re reducing it. In return, your lenders often agree to lower interest rates on your unsecured debts, typically 8%-10%, so that monthly payments become affordable.

DMPs will hurt your credit score significantly in the short term, but consistent monthly payments can improve it over time.

Debt Consolidation Loans

Using a debt consolidation loan allows you to consolidate your debts into one lump sum payment, simplifying what you pay each month to just one amount. If you carry good credit, you can access a single low-interest loan to pay off your smaller high-interest loans, avoiding account fees and penalties due to late payments.

Debt consolidation loans are convenient for residents of Hawaii with good FICO scores, as their eligibility for lower interest rate consolidation loans is more certain. When choosing a debt consolidation loan, beware of the long-term effects of the extended monthly payments that accompany these larger unsecured loans, as they can result in a higher overall amount of interest paid over this longer period of time.

Debt Settlement

Debt settlement is the process of negotiating with creditors to reduce the total amount you owe. For debt settlement to work, debtors must present a lump sum payment that’s acceptable to their creditors in order to forgive all or a portion of the balance or agree to receive reduced monthly payments for a set amount of time. 

While you can negotiate with creditors yourself, using a debt settlement organization can shorten and streamline the process for you and still help you save over half of your total debt. It's important to find a reputable company to work with when settling your debt. It’s illegal in most states for debt settlement companies to ask for any kind of service payment or “enrollment fees” upfront before showing you any results.

You can check the credibility of debt settlement companies by reading reviews on sources like Trustpilot, Google, and other sites like the Better Business Bureau to avoid scammers who ask for an upfront fee for debt settlement plans. You can read thousands of positive TurboDebt reviews from these sources to find out if we're a good fit for your financial situation. 

Credit Counseling

Credit counseling is a debt relief option that offers advice to consumers regarding how to spend money wisely, ways to manage debt, and tips for creating a monthly budget.

Credit counseling agencies work with certified credit counselors who’ll help you navigate your financial situation. They can help you craft a debt repayment plan based on your debt-to-income ratio.

Bankruptcy

Many hold off filing for bankruptcy, as it will negatively impact your credit for 7 to 10 years. This can limit access to new personal loans and lines of credit due to the negative information that may remain on your credit reports. However, bankruptcy proceedings can offer you a clean slate to restart your finances if no other debt relief solution works.

Chapter 7 bankruptcies are typically used to dispose of large amounts of unsecured debt like credit cards and medical bills.

The primary purpose of Chapter 11 bankruptcies is to allow businesses to continue with their operations while reorganizing their operations and their debt repayment plan under the supervision of a bankruptcy court.

Lastly, Chapter 13 bankruptcies are for consumers with consistent incomes who can support a restructured debt repayment plan. Chapter 13 requires a court-approved payment plan, and in exchange, you can retain your non-exempt assets from being liquidated to repay your debts.

If you're seriously considering bankruptcy in the Aloha state, it’s always best to consult with an experienced law firm for legal advice on the best type of bankruptcy to file for yourself or your business.

Debt Forgiveness

In debt forgiveness, you’re forgiven the entire sum, or at minimum, a significant portion of your debt balance. However, you must qualify for an available debt forgiveness program for you to benefit from it. The following are examples of debt forgiveness programs:

• Public service loan forgiveness
• Perkin’s loan cancellation and discharge
• Public School Teacher loan forgiveness
• Federal student debt loan forgiveness

Debt and Financial Hardship Resources in Hawaii

If you’re living in a low-income household or going through financial struggles, you can access the following debt and financial hardship resources:

Temporary Assistance Programs

The Hawaii State Department of Human Services offers TANF and TAONF programs that provide cash assistance for low-income families who are residents of the Aloha state. To qualify for the cash assistance, your household must include a child under 18 and have a gross income that’s no higher than 185% of the federal poverty level for a family your size.

State Health and Human Services

Hawaii's Department of Human Services can assist with health insurance and long-term healthcare benefits for low-income families. Eligible families stand to benefit by choosing one of the following QUEST integrated health plans:

• Aloha Care
• HMSA
• Kaiser Permanente
• Ohana Health Plan
• United Healthcare Community Plan

The program can also cover medical bills that aren’t past ten days old, as long as the healthcare is provided by a qualified medical provider.

Hawaii SHIP is an insurance assistance program that offers Medicaid to eligible 65+ year-olds and their caregivers. The program achieves this through its free Medicare counseling, presentation, and information sharing.

Child Care

The state of Hawaii offers child care through the Physical Activity and Health Program, which oversees the following programs:

School Health is a school-based program targeting the health and physical fitness awareness of 5 to 17-year-olds. The program works by establishing a wellness policy for local schools participating in the National School Lunch Program, which provides meal assistance to residential child care institutions and public and non-profit private schools.

Hawaii Child Care Nutrition Program provides nutritional health guidelines to licensed child care facilities, ensuring child nutrition and striving to prevent and manage chronic illnesses.

The SNAP-Ed Program is a funded program offering healthy nutrition and improving the lifestyles of eligible low-income families.

Shelters for the Homeless

The state of Hawaii provides shelters across the islands for residents experiencing homelessness due to financial hardship. However, you’ll need to confirm the availability of a bed in the shelter in advance before visiting the shelter.

Free Transportation Services

Eligible low-income adults and youths in Honolulu County can apply for the Bus Fare Subsidy Program, where adults are given a $10 monthly voucher and the youth a $6.50 monthly voucher.

The state also has a Free Bus Pass for qualifying students to access free transportation services in Hawaii.

Government Debt Relief Programs

While the government doesn’t offer any specific programs for debt relief, they may provide financial assistance in other ways, such as a Hawaii stimulus check or tax relief for qualifying citizens at certain times.

Finding Debt Relief in Hawaii

Residents of Hawaii don’t have to struggle with debt. TurboDebt can help you explore the best debt relief options available in Honolulu or throughout the islands of Hawaii. Take advantage of our free consultation now, and learn more about how we can help you take your first step toward debt-free living.