Hawaii Debt Relief

In a Nutshell

The Aloha State is envied for its scenic beauty and warm weather, especially through the winter. 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 financial hardships and debt, with many residents seeking relief.

Income levels of Hawaii residents are one of the key reasons behind their financial struggles, as low or negative disposable incomes force many to accumulate debt to meet the high costs of living, largely influenced by transportation costs.

Fortunately, there are various debt relief options available for those having trouble keeping up 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, this article will help you find the best debt relief options in Hawaii, as well as provide other key financial hardship resources that can help you get back on track and regain control of your finances.

Hawaii’s Economic Picture

The economy of Hawaii is choking its residents as they’re struggling with a severe housing shortage that has increased home values to all-time highs. Despite the labor participation rate increasing by 4% in February of 2023, the average consumer debt hasn’t decreased to relieve the residents from high debt burdens due to the high cost of living and low wages and salaries. This has left residents of Hawaii in desperate need of debt relief solutions.

How does debt relief work in Hawaii?

Hawaii debt relief options work to ensure that you get a fresh start from debt. The top solutions achieve this objective by negotiating for lower interest rates, waiver of late payment fees, debt cancellations, and low monthly payments. This ensures that debt is cleared as soon as possible, thus increasing your disposable income.

Hawaii Debt and Finance statistics

The following debt and finance statistics are specific to the state of Hawaii:

Average consumer debt

Hawaiians average consumer debt jumped by 3.9% to $143,725 from $138,274 in 2021. The increase in consumer debt is a reflection of the nation’s total consumer debt increase of $16.38 trillion from $15.31 trillion.

Credit card debt

Hawaiians had an average credit card debt of $5,525 in 2021. This drop of -1.2% from $5,594 was lower than the national average drop in credit card debt, which was -2.1% from $5,315 to $5,221. The drop in credit card debt can be attributed to the stability in consumer spending as residents of Hawaii tried to manage credit card debt.

Auto loan debt

Nationally, auto loan debt increased to a new high of $1.43 trillion in 2021. Auto loan debt in Hawaii also increased to an average of $21,024 from $19,858, showcasing how the pandemic affected global supply chains of raw materials for car manufacturing.

Mortgage debt

The homeownership rate in the state of Hawaii is 61.0%, with residents paying a monthly median mortgage fee of $2,587. Hawaii’s monthly median mortgage is well above the nation’s $1,697, contributing to high consumer spending; therefore, residents accrue mortgage debt.

This is exacerbated by the falling supply of houses by 8.4%, which pushed median home values to $662,100 while the national median home value is $244,900. The variation in home values is further showcased, with counties like Kaneohe and Honolulu having above-average median prices of $829,900 and $726,800, respectively, while Maui county recorded a median home value of $676,800.

Student loan debt

92.7% of the population in Hawaii has attained a bachelor’s degree or higher, while 8.4% of the total population owes student debt loans totaling $4.5 billion. This ranks the state of Hawaii among the least in outstanding student debt loans, with an average student debt loan of $36,765. Hawaii’s average student debt loan is below the nation’s average of $37,574.

Household debt

The state of Hawaii has the highest debt-to-income ratio of 2.25%. The high DTI is due to the high cost of living, that’s 84% higher than the national cost of living. This has increased the average household debt to $143,725 from $138,274.

Bankruptcy

The rate of Hawaii bankruptcy has been dropping since 2019, with a recent drop of -20.1% in 2022 to 969 bankruptcy cases from 1213 cases in 2021.

Chapter 7 bankruptcy cases were 625 in 2022, while Chapter 11 bankruptcy cases were 14, and Chapter 13 bankruptcy cases were 54. Other bankruptcy cases were 21 in the same year.

Before filing for bankruptcy, consult with a Turbodebt specialist to determine if this is your best option for debt relief in Hawaii.

Average income and employment

Hawaii had a record-high unemployment rate of 22.6% during the pandemic and a low of 3.2% in December 2021. The year-over-year change increased to 3.7% in 2022, and the labor participation rate increased to 60.5% from 59.0 for the same economic year.

The median household income in Hawaii is $88,005, and the per capita income is $39,045.

Credit scores

In 2022, Hawaiians had an average credit score of 732, which is a good credit score for accessing lower-interest loans. The year-over-year change in average credit score is 0 due to an increase in credit utilization among the residents of Hawaii.

Identity theft

Identity theft cases in Hawaii totaled 1,347 ranking the state 33rd in the country. Meanwhile, the total fraud and other cases were 7,056, with a median fraud loss of $399.

The top five types of identity theft included the following;

1. Credit card fraud at 46%
2. Other identity theft at 30%
3. Bank fraud at 14%
4. Loan or lease fraud at 13%
5. Phone or utility fraud at 9%

Banking and tax info

The top individual income tax rate of Hawaiian residents is 11%, and the local and state burden is 12.7%. The top corporate income tax rate is 6.4% ranking the state 43 in the tax foundation’s business tax climate index.

The state has a tax rate of 4.00% and an average local sales tax rate of 0.44. It also charges an excise tax of 51.69 cents per gallon of gasoline and $3.2 per 20-pack of cigarettes.

The state has a property tax rate of 1.31% and a property exemption cost of $40,000 if you’re below 60 years, $80,000 for residents between 60 and 69 years, and $100,000 if you’re above 70 years.

The state has a total of 7 institutions holding total assets worth $68,230 million in Q3 of 2022 from $68,682 in Q3 of 2022. The largest financial market is in Urban Honolulu, with $47,838 million in deposits.

How TurboDebt’s Hawaii Debt Relief Program Helped Residents in 2022

Our professional team managed to work with 827 clients in 2022. Out of this, we enrolled 321 Hawaii residents in our debt relief program as they work to achieve a debt-free life. The average enrolled debt was $26,832, and the total enrolled debt came to $8,612,925. TurboDebt’s experts managed to save $6,321,025, which was an incredible 79.39% of the total enrolled debt, 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

15% of Hawaii’s residents are vulnerable to the tough financial situation in the state, while 54% are struggling with high consumer debts. This is largely caused by low salaries and wages compared to the high cost of living in the state, leading consumers to accumulate revolving credit card debt to meet their spending.

At TurboDebt, we’re passionate about eliminating credit card debt through our tailored debt relief program. It’ll ensure that you make consistent monthly payments, thus clearing your credit card debt in as little as two years, and greatly 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 case of divorce, meaning that debts and assets are distributed between spouses regardless of who owns them. This might result in you owing divorce debt if your spouse had accumulated personal debt.

TurboDebt’s debt relief program helps you tackle divorce debt through its debt settlement plan. Our experts will negotiate for partial forgiveness of divorce debt, making it more manageable for you to pay down any debt you might have from divorce.

Business Debt

The total amount of loans advanced to small businesses in Hawaii was $2.4 billion in 2022 compared to $447.5 million in 2020. Such an increase showcases the harsh economic conditions of doing business in Hawaii, resulting in the accumulation of debt for survival.

This reality is backed up by the net decrease in employment as the economy lost 82,305 jobs and 4,947 businesses closed their doors, resulting in the accumulation of business debt in the state.

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

The state also ranks low with a poor medical debt policy that allows spouses to inherit medical debt and debt collection agencies to initiate foreclosures and wage garnishments. This indicates how easy it is to accumulate medical debt in Hawaii should your loved ones die from illnesses.

When you work with one of our experts, or another local organization, such as nonprofit credit counselors, you will be able to work to eliminate medical debt through a customized debt relief option. TurboDebt’s debt relief programs can help you reduce your medical debt and get back on track to building your wealth.

Homeowner Debt

The recent severe housing problem led to an increase in home values as the demand for homes increased.  This led to residents of Hawaii spending more than 36% of their income in paying off debt with a housing cost that’s $100 above the average monthly national cost, making it easy for residents to accumulate homeowner debt.

If you’re struggling with home-owner debt, or are looking to access lower-interest or reduced payments on your home-related debts, don’t hesitate to get in touch for assistance. Our debt relief company has a solution for homeowner debt where you can access lower-interest consolidation loans to pay off your mortgages.

Retirement Debt

Although the state of Hawaii has backed up 80% of its state’s pension debt with assets, it still has a deficit of less than $800 billion in pension debt, requiring you to have an average retirement income of $91,970.21 to live comfortably in Hawaii. This is the highest required retirement income in the country due to the high costs of living.

TurboDebt helps residents of Hawaii work to become debt-free by managing retirement debt through its debt relief program.

Hawaii debt relief options

The best debt relief options for residents of Hawaii include the following;

Debt management programs

Debt management programs work by having a planned monthly payment that’s usually overseen by a nonprofit credit counseling agency. The monthly payments are deposited in a savings account where a lump sum payment will be made to your creditors.

In DMPs, you’ll have to close your credit cards to avoid accumulating debt, and your lenders will agree to lower interest rates to 8% so that monthly payments become affordable.

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

Debt consolidation loans

Debt consolidation loans work by acquiring a loan and consolidating your debts into one lump sum payment. They simplify the number of monthly payments you have to make to one, lower interest rates through accessing a low-interest loan to pay off high-interest loans, avoid penalty fees and accruing interest rates due to roll-overs, and reduce the amount of time on debt repayment by decreasing the number of loans.

Debt consolidation loans are convenient for residents of Hawaii with good FICO scores as their eligibility to lower interest rate loans is guaranteed. When choosing a debt consolidation loan, beware of extended monthly payments, as they can result in higher repayment fees over time.

Debt settlement

Debt settlement is the process of debt negotiation that ends up in partial cancellation of your debt balance. For debt settlement to work, lenders must present a lump sum payment that’s acceptable for creditors to cancel the debt balance. Alternatively, they must agree to make reduced monthly payments for a set amount of time.

It’s important to check the credibility of debt settlement companies on Trustpilot, Google, and other sites like the better business bureau to avoid scammers who ask for an upfront fee for debt settlement plans.

Credit counseling

Credit counseling is a debt relief option that offers advice to consumers regarding how they spend money, manage debt, and budget income to avoid filing for bankruptcy.

Credit counseling agencies work with certified credit counselors who’ll negotiate for lower interest rates and waiver of penalty fees on your debt. They’ll also help you to choose a debt payment plan depending on your debt-to-income ratio.

Bankruptcy

Consumers fear filing for bankruptcy as it hurts your credit report for 7 to 10 years, thus limiting your access to personal loans. However, they offer you a clean financial plate depending on the type of bankruptcy.

Chapter 7 bankruptcies are for disposing of unsecured debt like credit card debt, where you might liquidate nonexempt properties like second homes to clear off the debt.

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

Lastly, Chapter 13 bankruptcies are for consumers or businesses with consistent incomes that can afford debt repayments. They work by creating and sticking to a payment plan, and in exchange, you get to protect your nonexempt properties from liquidation.

You should consult for legal advice from your law firm on the best type of bankruptcy to file for you and your business.

Debt forgiveness

In debt forgiveness, you’re forgiven the entire sum of your debt balance. However, you must qualify for an available debt forgiveness program for it to work. The following are examples of debt forgiveness programs;

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

Debt and Financial Hardship Resources in the state of Hawaii

You can access the following debt and financial hardship resources if you’re living in a low-income household or going through financial struggles.

Temporary assistance programs

The state department of human services offers a TANF and TAONF program that provides cash assistance for low-income families in Hawaii. To qualify for the cash assistance, your household must have a kid under 18 and have a 185% gross income below the 2006 federal poverty level.

State health and human services

Med Quest program offers health insurance and long-term healthcare benefits to 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 so long as the healthcare is provided by a 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 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 childcare institutions and public and non-profit private schools.

Early Childhood Care and Education offer child care to more than 60% of Hawaii’s 6-year-olds and below. It does this by facilitating healthy developmental habits, encouraging physical activity, and offering healthy food and drink intakes.

Hawaii Child Care Nutrition Program works closely with the CDPHPD to provide nutritional health guidelines to licensed childcare facilities. This ensures that the kid’s nutrition is catered for ,thus preventing and managing chronic illnesses.

Breastfeeding Baby-Friendly Hawaii Project aims to boost the number of mothers who breastfeed their babies for a minimum of 6 months.  This is in a bid to prevent obesity among kids, lowering direct medical costs, and improve the psychosocial benefits in a newborn.

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 for residents experiencing homelessness due to tight financial situations. 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.

Conclusion on Finding Debt Relief in Hawaii

Residents of Hawaii don’t have to struggle with debt. TurboDebt can help you determine the best option for relief in Hawaii. Take advantage of our free debt relief consultation now, and learn more about why we’re one of the top-rated companies in the space.