Although the Empire State remains one of the financial hubs of the U.S., plenty of New Yorkers are facing economic struggles. With credit card and other consumer debt reaching unprecedented levels, access to debt relief is an effective solution for many New York residents.

Read on to learn more about the top ways for Empire State residents to manage and reduce their debt.

Your Options To Get Out of Debt in New York State

Credit Counseling

Working with a credit counseling agency servicing New York State gives you professional advice and resources to manage your finances.

How It Works in New York
New Yorkers who enroll in a credit counseling program connect with a certified credit counselor for one-on-one advice. Counselors review your credit history and score and offer suggestions to help you manage debts.
Credit counseling gives you a great starting point for overcoming financial struggles through economic education and personalized advice.
Credit counselors may require you to take specific financial education classes that require a significant time commitment to receive services.
Credit counseling programs typically cost very little compared to other debt relief services. Low-income residents may also qualify for low or no-cost services.
Most credit counseling organizations operate as nonprofits. However, for-profit companies do exist in most New York localities as well.
Find a credit counselor in New York State and learn more about their services through the Financial Counseling Association of America.

Debt Management

Debt management involves making a plan to pay off multiple debts with the help of a third party that helps administer payments and manage your credit accounts.

How It Works in New York
Debt management plans (DMPs) help New Yorkers reorganize monthly debt payments through a credit counseling organization or other debt relief company.
DMPs ensure you make timely payments on multiple outstanding accounts. They may help reduce interest rates and waive late fees on your accounts as well.
Many DMPs require you to close out all current credit accounts to avoid further spending.
Debt management programs typically charge a modest initial set-up fee and monthly fees for each debt you’re paying off. Fees cost about $40 to start the program and $20-30 monthly for each managed account.
Residents of New York State carry an average total consumer debt of $93,361.
Read more about how debt management plans work and the services they provide.

Debt Consolidation

This option works as a DIY solution to transfer debt balances to a credit card or through a traditional debt consolidation loan.

“When looking at debt consolidation as a method for debt relief, it’s important to check your credit report and FICO score before you apply,” Brad Reichert, founder and managing director of Reichert Asset Management LLC, advises New York residents. “While each lender has its own criteria, you’ll typically need a score of at least 620 to qualify for a debt consolidation loan and a score of 680 or higher to get approved for the lowest rates,” Reichert shares.

How It Works in New York
New Yorkers can open a zero-interest balance transfer credit card and move as many high-interest debts to that account as possible. Another option is to take out a fixed-rate, fixed-term debt consolidation loan big enough to pay off all current unsecured debts. You can then repay this new loan’s balance instead of making several payments to different creditors each month.
Balance transfer cards typically charge no interest for an initial promotional period of nine to 18 months. Consolidation loans also have lower fixed interest rates if you qualify with a strong credit score (typically 680+).
On a balance transfer card, interest rates can skyrocket back to double digits if you fail to pay off the entire transferred balance during the introductory period. Any balance left over when the promotional period expires will be subject to the card’s standard annual percentage rate (APR), which can often be 25% or higher. Consolidation loans, depending on the term you choose, can also take longer to repay, costing you more in interest over time than a shorter-term loan of 12-18 months.
Costs for debt consolidation depend on your total transferred balance and the interest rate on the balance transfer card or debt consolidation loan.
New York residents have a strong average credit score of 721. This makes it easier for many consumers to secure a debt consolidation loan at a lower interest rate in the Empire State.
Learn more about the process of debt consolidation from TurboDebt’s resource library.

Debt Settlement

The debt settlement process can effectively eliminate up to half of New Yorkers’ unsecured debts, making financial freedom more attainable.

How It Works in New York
New Yorkers working with a debt settlement company set up a savings account to pay off each creditor when an agreement is reached.
Debt settlement helps consumers with unsecured debt from credit cards, personal loans, and medical bills reduce and pay off large balances faster and for less money overall.
Although it often helps clear debt faster, debt settlement can lower your credit score for a time.
Reputable debt settlement companies don’t charge upfront fees. They can only charge fees once they’ve negotiated an acceptable settlement on your behalf. Once you settle your debt, you’ll typically pay service fees ranging from 15-25% of your total enrolled debt.
New Yorkers carry an average credit card debt of $5,143, with many struggling to pay higher balances at escalating interest rates.
The American Fair Credit Counsel explains the debt settlement process step-by-step.


Bankruptcy is a last resort for New Yorkers to discharge debts and get a fresh financial start.

How It Works in New York
Residents declaring bankruptcy must file through the bankruptcy court within their local jurisdiction. Seeking legal advice from a bankruptcy attorney may be the best way to understand your options and ask questions about the process.
Bankruptcy can eliminate your debts and help you start over.
The bankruptcy process often involves selling your non-exempt assets to pay off debts. It also negatively impacts your credit score for up to 10 years.
Bankruptcy payments include court costs and attorney fees, often ranging up to about $5,000. You should also plan for the cost of paying off a significant portion of your debts through a court-ordered plan.
-A total of 19,303 New Yorkers filed for bankruptcy in 2023.
-This is a 24% increase from the previous year.
Read a guide to help you decide whether Chapter 7 or Chapter 13 bankruptcy is the right solution.

What You Need To Know About Debt in the State of New York

Statute of Limitations on Debt Collections in New York

The Statute of Limitations regulates how long a creditor can pursue legal action against a consumer to claim a debt. While timeframes are often similar, states set their time limits on each type of debt agreement.

The table below outlines consumer protections through New York’s Statutes of Limitation:

Type of Debt Agreement Length of Time Collectible
Written Contracts6 years
Promissory Notes6 years
Open-Ended Accounts6 years (credit cards 3 years)
Oral Agreements6 years

Statute of Limitations on Medical Debt in New York

In 2020, up to 10% of the population in the Empire State carried medical debt in collections. For nearly 6% of residents without health insurance, medical debts can become a burden that seems impossible to overcome.

New York State’s statute of limitations on medical debt is limited to three years. This is good news for consumers amid skyrocketing healthcare costs throughout the country.

Student Loan Forgiveness in New York

New York's higher education grads owe an average of $37,434 in student loans, ranking Empire State residents ninth in the nation for the highest average student loan debt.

Thankfully, residents can access New York’s Education Debt Consumer Assistance Program (EDCAP). While this program doesn’t forgive debt, EDCAP helps student loan borrowers throughout the state manage their education debt with free one-on-one assistance. Participants can also benefit from counselors who offer assistance in finding forgiveness programs or other debt relief services that get borrowers back on track financially.

Resources for Financial Assistance in New York

Government debt relief programs in New York include stimulus checks and tax rebates. Although stimulus checks have ended, you may still qualify for the funds if you have yet to receive them.

  • Family Assistance: Operating under the federal TANF program, Family Assistance provides cash benefits to needy households with one or multiple minors living at home. 
  • Safety Net Assistance: The SNA program provides cash assistance to those in need who don’t qualify for Family Assistance. 
  • Child Care Benefits: If you already qualify for cash assistance, the state provides various child care benefits for families in need. 
  • Supplemental Nutrition Assistance Program: SNAP is a federal program administered to residents through the state. SNAP provides cash assistance to help low-income individuals and families purchase healthy food.
  • Public Health Insurance: New Yorkers over 65, teens, and working people with disabilities may qualify for health insurance through state and federal programs.

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