Maine Debt Relief

In a Nutshell

Maine is located in the New England region and is famous for its lobsters, rocky coastline with deep harbors, and participation in the Revolutionary War. This state is also famous for its high cost of living, exceeding the national average by 1.05 times and ranking as the 16th most expensive state to live in.

As a result, Mainers easily fall into debt traps as they try to meet the high cost of living. In this article, we’ll discuss Maine’s debt relief options, the various types of debt to get relief from in Maine, as well as key financial hardship resources.

Maine: Economic Picture

Maine’s GDP grew to $62.7 billion in 2022. The state gross state product growth rate is 1.21, overperforming the national rate of 0.19%. The leading industries in terms of revenue include Life Insurance & Annuities, contributing $10.5 billion, Hospitals with $8.4 billion, and Gas stations with convenience stores totaling $6.1 billion.

The largest employment sectors are the state of Maine, with 30,000 employments and a 4.5% growth rate; Maine Health Services, with 20,751 employments and a growth rate of 3.1%; and Hannaford Bros. Co., LLC, with 8,751 employments and a growth rate of 1.3%.

How does debt relief work in Maine?

Maine debt relief involves different solutions that aim to achieve financial freedom. These solutions are administered with the help of non-profit organizations, debt relief companies, and federal and state-funded agencies.

These entities negotiate with lenders and debt collectors for reduced interest rates, lower monthly payments, waiver on penalty fees, and debt cancellation. All these are efforts made so you can get a fresh start away from debt.

Maine debt and finance statistics

The following debt and finance statistics are specific to the state of Maine;

Average consumer debt

The average consumer debt in Maine increased by 3.4% to $84,268 between 2022 and 2021 due to the overall increase in personal debts resulting from high-interest rates and cost of living.

Credit card debt

Mainers have an average credit card debt of $4,797, which is 3% lower than the national average. The average past-due rate on credit card debt is 0.53% against the national 0.57%, ranking the state of Maine 31st countrywide on credit card debt delinquency rates.

Debt collection agencies have a 6-year window for collecting credit card debt. After completion of this window, borrowers are exempted from repaying the debt so long as they don’t make any payments or promises during the period.

Auto loan debt

The US has a car ownership rate of 3.66%, while 93.2% of households in Maine have access to at least one car. This suggests an uptrend in the car market despite the increased car prices exacerbated by supply chain constraints and high-interest rates.

Auto loan borrowers in Maine have an average debt of $18,824. This represents the biggest jump in auto loan debt across the country by 7.8% from the previous year’s average. The monthly car loan fee for new cars is $519, and $322 for used cars.

Mortgage debt

Nationally, mortgages were the biggest contributor to consumer debt, as they increased by nearly $1 trillion in 2022. The same phenomenon has been experienced in Maine as the average home value increased by 25.1% to $252,100 from their 2019 prices. This left some 73.4% of homeowners in Maine struggling with mortgage payments since their average household incomes increased by only 2.1%.

Due to the difference in mortgage prices and income, most homeowners need to catch up on their average monthly mortgage payments of $1,477 and require debt relief options. This financial situation is tougher in Portland, where the average mortgage rates trend just below the national average mortgage rates resulting in high-interest fees.

Student loan debt

About 33.6% of Maine residents have graduated with a degree or higher. Out of this, 187,100 of them are student borrowers with an average student loan debt of $33,137. The total student loan debt owed by the residents of Maine is $6.2 billion, with 55.5% of borrowers below 35 years.

However, the national 90-day delinquency rate dropped to 1% as the Fresh Start program resurfaced over $34 billion of defaulted student loans as current.

Household debt

Household debt increased by $394 billion in Q4 of 2022 as young debtors struggled with auto loan and credit card payments in America. The state’s residents also witnessed a shift in household debt as they had a DTI ratio of 1.601. Such a DTI implies that residents spend more than half of their incomes on debt settlement plans. This results in a never-ending debt cycle that requires relief.

Bankruptcy

Bankruptcy filings in the state have been on a 10-year downward trend of 3,052 cases in 2012 to 534 cases in 2022.

Chapter 7 bankruptcy filings were the highest at 409 cases. This highlights the need for debt relief as the income of borrowers was low, and the residents’ debt balances were discharged once their nonexempt properties were liquidated to pay off debt.

Residents with an above median income filed 108 Chapter 13 bankruptcy cases where they are required to submit a repayment plan and keep all properties as liquidation isn’t necessary.

The remaining 17 cases were from Chapter 11 bankruptcies, which are business oriented.

Average income and employment

Maine has a population of 1.38 million and an employment-to-population ratio of 56.3%, which is below the national’s ratio of 60.2%. However, the unemployment rate remained low at 2.9% from 3.6% in January 2022.

The median household income in the state is $63,182, while the average is $83,914, and the per capita household income is $36,171. High-income areas in Maine include Cumberland, Falmouth, and Cape Elizabeth, with mean incomes of $282,364, $182,964, and $171,351, respectively.

Households earning above $200,000 annually are only 5.8%, while residents below 25 years make the least with a median income of $41,563.

Credit scores

The FICO score is a crucial aspect of determining credit scores, creditworthiness, and the cost of accessing loans. The average FICO score in Maine increased by 1 point to 728 in 2022, indicating that even through the pandemic, consumers found alternative ways to manage their debts.

Generally, 728 is a good credit score for accessing lower-interest loans. Also, the national average FICO score of 714 qualifies for low-interest loans.

Identity theft

Since the onset of the pandemic, the annual averages in identity theft reports in Maine increased by 85.39%, ranking it 4th countrywide. However, the number of identity theft in the state remained low at 167 cases per 100K residents ranking the state 39th countrywide.

Banking and tax info

There are 23 banking institutions in Maine with total assets worth $38,988 million in Q3 of 2022. This is an increase from $36,871 million in Q3 of 2021.  The largest financial market is in Portland, with a total deposit of $20,906 million.

The graduated individual income tax ranges from 5.8% to 7.15%, while the corporate income tax rate ranges from 3.5% to 8.93%. The state’s sales tax rate is 5.5%, and residents aren’t taxed a local sales tax.

An excise tax is levied on cigarettes and gasoline at 30.01 cents per gallon of gasoline and $2 per 20 packs of cigarettes.  The property tax rate in the state is 1.24% of the owner’s home value. Property owners in Maine enjoy a $25,000 tax exemption.

Internal debt statistics from 2022

TurboDebt is a reputable debt relief company that helps Mainers qualify for debt relief options. In 2022, we managed to work with 365 clients, and 147 of them enrolled in our debt relief program. The total enrolled debt was $3,543,340, and the average client enrolled debt was $24,104.

Top Types of Debt to get Relief from in Maine

While the TurboDebt relief program accepts many forms of unsecured debts, we often see a majority of Maine residents qualify with the following top types of debt.

Credit Card Debt

Credit card debt is an unsecured debt that attracts high-interest fees and late payment charges, making it difficult to clear the debt. With an average household income of $6,992 and an average credit card debt of $4,797, many residents of Maine find themselves in a hard place financially and have to seek relief from certified debt relief companies to escape credit card debt.

TurboDebt is a well reviewed company that offers debt relief solutions to residents of Maine. Contact us today for a free consultation with our professional team.

Divorce Debt

Since Maine isn’t a community property state, debts and assets aren’t divided equally. However, that doesn’t mean you won’t end up with divorce debt. A divorce judge may decide to divide your marital debt based on income, social standings, and custody of children resulting in divorce debt.

You can also accumulate divorce debt from hefty legal fees and alimony. If you find yourself in such a situation, you can benefit from Maine’s debt relief options to clear your divorce debt or get financial assistance from the state’s resource programs to ease the burden of divorce debt.

Business Debt

The poor state of infrastructure and access to capital in Maine has made it rank low in the business index.. In addition, the cost of doing business and the workforce make it harder for small businesses to realize their ROIs.

For small business owners, this is a nightmare as they’ve got limited capital that’s being eaten up quickly by the overhead costs of doing business. Many of them end up securing business loans, which results in business debt in case of poor management.

Instead of winding down your business operations, why don’t you get reputable help from TurboDebt’s relief program?

Medical Debt

Almost 8% of Maine residents lack medical insurance coverage despite the state running a MaineCare program. The program assists residents with low incomes, disabilities, or those living with someone with a disability, blindness, below 18 years and is pregnant, and above 65+ years to access medical assistance by providing insurance coverage.

Such a financial situation has led to 15% of residents owing a median medical bill of $825. This leads to limited access to quality medical care and increased medical bills for uninsured residents with chronic illnesses.

Maine medical debt relief plans can assist you in clearing your outstanding balances and ease access to quality medical care.

Homeowner Debt

The average home value in Maine increased by 25.1%, while income levels improved by only 2.1% within the same period. The high increase in home values and a low improvement in incomes result in a high DTI ratio, which affects the ability of homeowners to keep up with their monthly mortgage payments.

Therefore, homeowners are burdened with accumulating homeowner debt as home values continue to soar higher compared to their income levels. This is evident with the uptick in the country’s mortgage delinquency rate by 0.15 percentage points and foreclosure notices to 30,000 new individuals.

Our Maine debt relief program is here to help ensure that you don’t face any foreclosure risks or homelessness.

Retirement Debt

Retirees who want to retire and enjoy Maine’s beautiful coastline and expansive forests need around $1.01 million to do so comfortably. Although this is 3.2% below the national average, it can be difficult for retirees living in South Windham, as they earn an average retirement income of $3,550 compared to Berwick retirees, who earn $80,941.

When you couple this difference in income levels and unfunded pension liabilities of $2,692.10 million, you get a clear picture of how retirement life is full of debt for some retirees.

Whether you’re working with certified credit counselors or our own TurboDebt experts, know that there’s a debt management plan to get rid of retirement debt.

Maine debt relief options

Residents looking to discharge debt through debt relief options can benefit from the following best debt relief solutions in the state.

Debt management programs

Debt management programs are facilitated by nonprofit credit counselors who help you eliminate unsecured debt like credit card debt. They assist you in selecting a debt management program based on your income and the amount owed.

The certified credit counselor will engage your creditors in a debt negotiation process, where interest rates are lowered, and monthly payments are made affordable. For DMPs to work, you must close your existing credit cards and commit to making monthly payments to a savings account. Creditors will be paid off from the savings account. You’ll need around 3 to 5 years to clear debt under this debt relief option.

Debt consolidation loans

Debt consolidation loans involve taking a larger lower-interest-rate loan to clear your smaller loans. This debt relief solution works by eliminating the high-interest fees you could have paid if you didn’t consolidate your loans.

You can also benefit from lower monthly payments as a result of lower interest rates from your consolidation loan. Some debt consolidation loans offer a 0% interest rate for a limited timeframe. Residents of Maine can take advantage of this to attain a debt-free life.

This debt relief option is advantageous for residents with a good credit score.

Debt settlement

Debt settlement plans are debt relief options that creditors prefer compared to when consumers default on their loans. In this debt relief solution, third-party debt relief companies like TurboDebt negotiate for a partial cancellation of your loan once you make a lump sum payment.

Most debt collection companies demand a 50% payout to agree on debt settlement. The debt balance that remains after the payout is forgiven, and you can become debt-free.

Credit counseling

Credit counseling allows you to take control of your financial lifestyle by empowering you with debt and money management, budgeting, and offering financial education materials.

It works by determining a debt management plan based on your income and expenditure. Certified credit counselors can also help you in negotiating a waiver on penalty fees, lower interest rates, and lesser monthly repayments.

Mainers with extremely low incomes and in tight financial situations can access this debt relief option from nonprofit credit counselors.

Bankruptcy

Debtors dislike this debt relief option as it impacts your credit report for up to 10 years, hence limiting your access to loans in the future. However, it can discharge or reorganize your debt payments depending on the type of bankruptcy your law firm files on your behalf.

In Chapter 11 bankruptcies, debts are reorganized, and you get to repay them in 3 to 5 years. This option is convenient for businesses that want to repay their debts without affecting their operations.

Chapter 7 bankruptcies will liquidate your nonexempt properties to repay your lenders. Debts that aren’t cleared through liquidation are discharged, and you get a fresh start.

Meanwhile, to qualify for Chapter 13 bankruptcies in Maine, you must have secured debts exceeding $1,184,200 and unsecured debts not exceeding $394,725. The repayment duration can last 3 to 5 years. This option is for individuals or businesses earning a consistent monthly income and can afford to clear their debts without liquidating their assets.

Debt forgiveness

Debt forgiveness entails debt cancellation once you enroll in debt forgiveness programs. Most debt forgiveness programs are administered by the state and federal governments, including student loan debt forgiveness programs.

Certain professions also qualify for debt forgiveness, for example, teachers.

Debt and Financial Hardship Resources

The following debt and financial hardship resources are here to assist Mainers in avoiding the harsh effects of financial hardships;

Temporary assistance programs

TANF is a cash assistance program for eligible working families and pregnant women. Once you join the program, you may qualify for job training and education.

The General Assistance fund provides residents who can’t meet their basic needs with means of meeting them, including paying for household supplies, medical bills, housing arrears, and utility costs.

Higher Opportunity for Pathways to Employment is an educational training program for families that meet the financial requirements and social qualifications.

State health and human services

The SNAP program provides low-income families and residents with monthly stipends to purchase nutritious food, thus avoiding malnutrition.

The SNAP Employment and Training initiative assists SNAP beneficiaries with job training and education so that they find and maintain well-paying jobs.

MaineCare offers free or low-cost medical insurance to residents who meet the program’s financial requirements.

The Disability Determination Services provide medical assistance to qualifying residents of Maine who are disabled.

Child care

Child support services help lost children in Maine locate their parents, know their parents through paternity tests, and it enforces other child support obligations.

Shelters for the homeless

Emergency Shelters in Maine are supported with funds by the state gov to avoid homelessness due to foreclosures or any financial hardship.

Disclaimer: Call the emergency shelters in advance to confirm their availability.

Free transportation services

The Go Maine Commuter Connections services offer the state’s residents free transportation within the state.

MaineCare Transportation Services offers non-emergency transportation services to eligible residents.

Conclusion

You can make a dream come true with the above debt relief options. Your biggest task before enrolling in a debt management program is ensuring that the debt relief company has an excellent reputation. This is to avoid illegitimate companies or inexperienced debt relief agencies that may scam you or worsen your financial situation.

TurboDebt is a market leader in debt relief. You can gather this from the positive reviews clients have left and the professional manner of the team. Take advantage of our free debt relief consultation now!