Turbo Takeaways
- Many Massachusetts residents face rising living expenses and high-interest rates, making it harder to keep up with multiple debt payments.
- Debt relief programs like consolidation, settlement, and management plans can reduce payments and make repayment more manageable.
- With the right plan, Massachusetts residents can break the debt cycle and work toward lasting financial independence.
Your Options To Get Out of Debt in Massachusetts
The Bay State continues to draw visitors and residents alike for its New England charm, as well as its economic and educational opportunities in areas such as Boston and Cambridge. However, with rising unemployment and inflation throughout the state, many residents struggle to thrive financially.
In fact, approximately 10% of the Massachusetts population lives at or below the federal poverty level. Surprisingly, the Bay State also has one of the highest median incomes and average credit card balances, making debt relief a necessity for both the affluent and low-income earners.
Keep reading to learn more about the ways debt relief can change your financial situation as a Massachusetts resident.
Credit Counseling
Certified credit counselors provide Massachusetts residents with advice and direction to start the debt relief process.
How It Works
Consider working with either a nonprofit or a private credit counseling organization offering programs in your area or through online services.
Once you enroll in a program, you’ll get connected with a certified credit advisor who can walk you through your next steps for financial education and debt relief.
Pros
- Offers personalized budgeting and repayment guidance
- Provides tools to strengthen money management habits
- Often available at low or no cost through nonprofit agencies
Cons
- Doesn’t eliminate existing debt balances
- Requires full commitment to counselor's recommendations
- Some extended services may include small fees
Cost
Credit counseling offers low-cost or free services (to qualifying low-income residents). You’ll typically pay a small initial fee to join a program.
Stats
- More residents have chosen the option of debt settlement over credit counseling in the past decade. This may be because many of these programs also offer advice about your financial situation, coupled with a program to help you start making payments on your debt.
- However, a credit counselor is also an effective way to get expert advice about your credit scores.
Resources
Find out how credit counseling provides helpful advice for consumers.
Debt Management
Debt management programs (DMPs) offer a practical solution to debts, using a professional organization to facilitate payments to each of your creditors.
How It Works
Bay Staters can opt to work with a credit counseling agency or a private company offering debt management services. First, you’ll make a plan that you and your creditors must agree to before setting up monthly payments through the organization.
Finally, you’ll send funds to the agency that transfers each payment to your creditors.
Pros
- Merges multiple debts into a single monthly payment
- Can lower interest rates and remove late fees
- Develops a structured plan with a clear payoff timeline
Cons
- Requires closing most credit card accounts
- Missed payments can cancel negotiated benefits
- Includes setup and monthly maintenance fees
Cost
A DMP typically charges a small enrollment fee of around $40. However, you’ll also pay a monthly fee for each account the organization administers. These fees usually range from $20 to $30 per month.
Stats
- DMPs can cover a range of consumer debts, making this an attractive option for Bay State residents carrying multiple large balances.
- Massachusetts’ average total consumer debt is $127,277, proving that debt relief options are essential for residents.
Resources
Learn more about the ways debt management programs aid consumers in overcoming debts.
Debt Consolidation
Massachusetts residents can also opt to pay down debt through a consolidation approach using a few different methods.
How It Works
Bay Staters may want to open a zero-interest balance transfer credit card to catch up on payments without added fees.
Another option is to take out a debt consolidation loan big enough to pay off every current debt, leaving residents with a single monthly payment toward the new loan.
Pros
- Simplifies repayment with one loan or balance transfer
- Zero-interest cards offer time to pay down large balances without extra charges
- Consolidation loans can lower interest and make payments more manageable
Cons
- Requires a healthy credit score to qualify for lower loan rates
- Interest spikes after the 12–18-month promo period on balance transfer cards
- Missed payments or poor credit can make consolidation less effective
Cost
You may incur a small balance transfer fee when opening a new card. Be sure to read the contract carefully to determine how much you’ll pay in fees and the new interest rate after your interest-free period ends.
Calculating the cost of a debt consolidation loan depends on the total amount of the loan plus your interest rate over the time it takes you to pay it off.
It’s important to do these calculations before enrolling in a debt consolidation program to ensure you’re making the best choice for your finances.
Stats
- Massachusetts residents have an average credit score of 723.
- A strong credit score indicates that plenty of Bay Staters are likely to qualify for better interest rates on a debt consolidation loan.
Resources
See if debt consolidation loans are the right choice for your financial situation.
Debt Settlement
Settling debt is often an effective way to eliminate part of your outstanding debt and make paying it off more achievable.
How It Works
The goal of a settlement is to reduce what you owe by paying creditors a lump sum towards your debt instead of the full amount. Residents of the Bay State can contact creditors on their own or leverage the expertise of a debt settlement company to negotiate a settlement on their behalf.
Pros
- Can reduce unsecured debt balances by up to half
- Provides a faster path to relief than long repayment plans
- Avoids bankruptcy while resolving large debts
Cons
- Credit score drops during the settlement process
- Creditors may reject or delay offers
- Service fees apply after a successful negotiation
Cost
Debt settlement companies charge fees ranging from 15% to 25% of your total enrolled debt once you finalize your settlement.
Stats
- High credit card debt is a leading cause of Bay Staters falling into a cycle of debt payments.
- Massachusetts residents carry an average credit card debt of $8,685, one of the highest in the nation, making debt settlement a viable option for many.
Resources
Discover how debt settlement works and how it can reduce your total debt payment.
Bankruptcy
When all other debt relief options fail, bankruptcy is a last resort for Massachusetts residents.
How It Works
Individual consumers typically file for either Chapter 7 or Chapter 13 bankruptcy through the Massachusetts Bankruptcy Court system.
Pros
- Legally discharges most unsecured debts through court protection
- Stops collections and wage garnishment
- Provides a financial reset after overwhelming debt
Cons
- Stays on credit report for up to 10 years
- Legal and attorney fees can be expensive
- Certain debts, like taxes or student loans, aren’t dischargeable
Cost
Declaring bankruptcy has long-term consequences for your credit history and score, making it more difficult to secure loans or open new credit accounts in the near future.
Stats
- In 2024, a total of 4,534 Massachusetts residents filed for some type of bankruptcy (PDF).
Resources
Discover more about life after bankruptcy and what the process entails.
What You Need To Know About Debt in Massachusetts
Statute of Limitations on Debt Collections in MA
Massachusetts’ Statute of Limitations on Debt Collections limits how long a creditor can take legal action against a consumer for not paying a debt. Although this doesn’t absolve debtors, it allows consumers to work toward paying off debts without the concern of a lawsuit after the time limit expires.
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 6 years |
| Promissory Notes | 6 years |
| Open-Ended Accounts | 6 years |
| Oral Agreements | 6 years |
| Medical Debt | 6 years |
Student Loan Forgiveness in Massachusetts
The State of Massachusetts offers several loan repayment programs to assist professionals in paying off educational debts, including the following:
- Massachusetts Loan Repayment Program for Health Professionals (MLRP): The MLRP program offers loan repayment assistance for qualifying primary healthcare professionals.
- Educator Loan Repayment Program: The Bay State offers up to $7,500 for qualifying teachers to cover college expenses. Massachusetts educators can apply annually for up to four years.
Resources for Financial Assistance in Massachusetts
Massachusetts residents facing financial difficulties can access assistance through various state and federal programs administered locally. Here’s a list of some of the top financial assistance programs available in the Bay State:
- Cash Assistance: Eligible Massachusetts residents can receive help covering basic living expenses through an Electronic Benefits Transfer (EBT) card, which is issued upon enrollment in the program.
- Transitional Aid to Families with Dependent Children (TAFDC): The TAFDC program provides families with economic assistance to cover essentials such as housing and utilities. The program may also cover education and health insurance and provide employment opportunities.
- Emergency Aid to the Elderly, Disabled, and Children (EAEDC): Massachusetts’ EAEDC program provides financial support to individuals, including those unable to work due to a disability, adults caring for non-related children, and seniors awaiting Supplemental Security Income (SSI) payments.
- Supplemental Nutrition Assistance Program (SNAP): The SNAP program (formerly known as Food Stamps) helps low-income families purchase nutritious food items.
Although Massachusetts stimulus checks have ended, you may also qualify for tax benefits through certain deductions. It’s a good idea to consult with a local tax professional to find out if you can save money through any of these options.
Get Professional Help Paying Off Your Debt
Residents of the Bay State are feeling the burden of debt as they struggle to pay high credit card bills and cover living expenses in the midst of record inflation. Many need options to overcome the cycle of late payments and compounding interest fees.
Sometimes, the best solution to relieving debt starts with getting professional help. TurboDebt® offers support through customized debt relief programs. When you contact us, we’ll arrange a complimentary consultation to help you explore your options and gain a deeper understanding of your unique financial situation.
Our clients from Massachusetts have already saved an average of 54% of their total debt before fees. Read over 20,000 5-star TurboDebt reviews across Trustpilot and Google to get the scoop from thousands of satisfied customers.
Reclaim your financial freedom and break free from debt. It only takes a few minutes to get started today!