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. Low incomes for some Hawaii residents 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 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, this article will help you find the best debt relief options in Hawaii. Plus, it will provide other key financial hardship resources that can help you get back on track and regain control of your finances.

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 the labor participation rate increasing by 3% in April of 2023, average consumer debt hasn’t decreased to relieve residents from the high cost of living compared to their wages. 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 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 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 $6,343 in 2022, ranking among the states that owed the most. This is evident as balances increased by 14.8% from the previous year.

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. It is showcasing how the pandemic affected global supply chains of raw materials for car manufacturing, plus the impacts of growing inflation on car buying.

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 increased consumer spending and sky-high home values.

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; 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

In Hawaii, 34.3% of the population 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 loans, with an average student debt of $36,765. Hawaii’s average student debt is below the nation’s average of $37,574.

Household Debt

The state of Hawaii has a debt-to-income ratio (DTI) of 2.25%. The Aloha State's DTI is largely due to the elevated cost of living, making it the highest in the nation.

This has increased the average household debt to $143,725, up from $138,274 in just one year.

Bankruptcy

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

Hawaiians filed the most Chapter 7 bankruptcy cases in 2022 with 625, while filing 14 Chapter 11 and 54 for Chapter 13 bankruptcy.

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, while the per capita income is $39,045.

Credit Scores

In 2022, Hawaiians had an average credit score of 732, which is an effective credit score for accessing lower-interest loans. This is one of the higher scores in the nation and above the U.S. average of 714.

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. Digital fraud can cause financial upheaval for Hawaii residents as online thieves attempt to steal funds and make charges under your name.

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 seven banking institutions holding total assets worth $68,230 million in Q3 of 2022, down 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 worked with 827 clients in 2022. Out of this, we enrolled 321 Hawaii residents in our debt relief program, helping them 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 saved our clients $6,321,025, a whopping 79.39% of the total debt enrolled before fees. That means clients in debt saved almost 80% of what they would have owed to creditors minus service charges by enrolling with TurboDebt!

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 more expensive.

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 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 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 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 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.

Homeowner Debt

Hawaiian home sales have begun to slow in 2023, bringing values down from historic highs. Median prices for single-family homes have decreased by over 4% in Hawaii County in the past year, with condo values dropping by about 1%.

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. TurboDebt offers solutions for homeowner debt where you can access lower-interest consolidation loans to pay off your mortgages.

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. Typically, under a DMP, you’ll have to close your credit cards to avoid accumulating debt, and your lenders will agree to lower interest rates to as low as 8% so that monthly payments become affordable.

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

Debt Consolidation Loans

Using a debt consolidation loan allows you to consolidate your debts into one lump sum payment, simplifying your monthly payments to just one. If you carry good credit, you can also access a low-interest loan to pay off high-interest loans, avoiding penalties and accrued fees due to rollovers.

Debt consolidation loans are convenient for residents of Hawaii with good FICO scores as their eligibility to lower interest rate loans is more certain. When choosing a debt consolidation loan, beware of extended monthly payments, as they can result in higher repayment fees over a 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 for creditors to cancel the debt balance or agree to make reduced monthly payments for a set amount of time.

While you can negotiate with creditors yourself, using a debt settlement organization can streamline the process and save you over half of your total debt balance.

It’s important to 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.

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 payment plan based on your debt-to-income ratio.

Bankruptcy

Many fear filing for bankruptcy as it negatively impacts your credit for 7 to 10 years, thus limiting access to personal loans and damaging your credit report. 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 unsecured debt like credit cards.

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 a payment plan and, in exchange, protect your nonexempt properties from liquidation.

If you're considering bankruptcy, consult with a 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 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 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 TANF and TAONF programs that provide cash assistance for low-income families in Hawaii. To qualify for the cash assistance, your household must include a child under 18 and have a 185% gross income below the federal poverty level.

State Health and Human Services

Hawaii's 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 child care institutions and public and non-profit private schools.

Hawaii Child Care Nutrition Program provides nutritional health guidelines to licensed child care facilities. This ensures that a child's nutrition is catered for, thus preventing and managing 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.

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 consultation now, and learn more about how we can help you take your first step toward debt-free living.