New York Debt Relief
16 MIN READ
Published March 15, 2023 | Updated February 09, 2024
In a Nutshell
New York debt relief options offer multiple ways for residents to manage growing debts. In a state with an average of over $4,000 in credit card debt per household, you’re not alone if you’re looking for ways to pay down that balance.
TurboDebt offers expert solutions to the problem of compounding debt, whether it’s from outstanding credit accounts or other financial obligations like medical bills. Read on to learn more about what debt looks like in the Empire State, plus information on ways to eliminate or reduce your debts.
Debt in New York State
New York’s varied landscapes and urban environments are home to some of the most iconic places in our nation. The center of America’s financial industry and a world leader in business and trade, the state is a mix of both tradition and innovation.
Over 8 million residents live in New York City alone, with a state population of more than 19 million. Those living in poverty make up 13.9% of the population, higher than the national average of 11.6%. As inflation continues to burden citizens across the country, New Yorkers are also taking on more debt for housing and essential goods and services, making it harder for Empire State residents to stay out of debt.
New York Debt Overview
With the state of New York spanning the metropolis of Manhattan to small rural communities upstate, debt affects households differently. To create a good picture, it’s helpful to examine the data describing how much debt the average New Yorker carries. Here’s a look at the most relevant debt statistics for New York, with information about other financial risks in the state:
Average Consumer Debt
Consumer debt measures the outstanding balances carried by households in several categories. This includes student loans, mortgages, credit cards, and auto loans. The Federal Reserve Bank of New York releases statistics for the entire country, breaking them down by year and quarter through its microeconomic research center.
In New York, the average consumer debt sits at $56,200. Mortgages take up the biggest chunk of consumer debt, with student and auto loans close behind. New Yorkers aren’t alone in their increasing debt. In the last quarter of 2022, total consumer debt rose to over 16 trillion for the U.S. population.
Credit Card Debt
Credit card balances also contribute to household debt, as missed and late payments lead to fees and high interest rates. FED data shows New York residents owe an average of $4,010 in credit card debt.
Auto Loan Debt
Loans for new and used cars continue to rise, with the average New Yorker owing $4,210 in auto loan debt. The struggle to secure a vehicle loan is a challenge for many in the Empire State, with interest rates trending upward every month. Interest rates for new car loans rose to 6.64% in quarter four of 2022 for a 72-month payment plan.
Mortgage Debt and Real Estate
On average, Empire State residents owe $39,060 in mortgage debt, a little below the national average of just over $42,000. However, multimillion-dollar properties in NYC help raise the average, as home prices in rural areas away from the metropolis sell for much lower.
The New York State Association of Realtors notes that even with the continued demand for housing, higher mortgage interest rates leave buyers concerned about affordability. Closed sales decreased by 34% in January of 2023, down significantly from the previous year.
The median home value for a NY residence was listed at $379,950 as of Jan 2023, with an average sale price of $506,128. New York’s housing affordability index also dropped 19.5% from 2022, sitting at 107 as of January 2023. Lower numbers indicate less affordability, further emphasizing the point that homes are getting harder to purchase for many across the state.
Student Loan Debt
Residents in the state of New York owe an average of $6,170 in student loan debt, well above the $5,770 national average. This includes federal and private student loans, which carry different debt burdens.
Traditionally, private loan lenders look for borrowers with good credit, which can be difficult for students fresh out of high school. Non-traditional students are more likely to carry debt from high-interest private student loans while first-time students often opt to borrow through federal loans, which typically offer borrowers lower interest rates.
Bankruptcy filings have steadily declined in New York over the past decade. Still, over 15,000 individuals filed for bankruptcy in the state of New York in 2022. People who decide they have no other options for debt relief use bankruptcy to reset their finances through legal intervention, leading to damaged credit for up to ten years.
Average Income and Employment
Empire State residents earn a median household income of $75,157, with per capita (individual) income at $43,208.
New York reported an unemployment rate of 4.3% in December 2022, above the national average of 3.5%. New Yorkers out of work can collect a max of $504 per week for up to 26 weeks in unemployment benefits.
Credit scores give lenders and creditors an idea of your financial habits, such as how likely you are to pay your bills on time and if you consistently make a full monthly payment towards your debt. Most organizations use a score assigned by the Fair Isaac Corporation (FICO) to assess your finances.
FICO scores range from “Very Poor” to “Exceptional,” with a numerical range of 300-800. Most states fall within the “Good” category.
Here’s a look at how credit scores are calculated:
|Credit Score Range
New York’s average credit score sits at a respectable 722, above the national average of 714. Although New Yorkers as a whole present a good credit score, the average resident still carries thousands of dollars in credit card debt.
As individuals and companies store more sensitive information in digital databanks, the threat of identity theft keeps escalating. Sophisticated online thieves look for ways to take social security numbers and banking information, or even medical records. In 2021, New York residents reported over 200,000 incidents of identity theft, ranking 16th in the nation.
Banking and Tax Info
New Yorkers pay an income tax based on their wages, starting at 4% and increasing to over 8% for earners making more than a million. State sales tax starts at 7% and goes up to 8.875% in New York City and surrounding metropolitan areas.
New York residents also average some of the highest unbanked rates in the country. Unbanked is the term for individuals who use alternative sources like check-cashing and money transfers instead of storing their funds in a bank or credit union. At least 5.6% of NY’s population is considered unbanked.
TurboDebt Offers New York Debt Relief
Finding the right debt relief service can help start you on the path to debt-free living. At TurboDebt, we’ll work with you to make a plan so you can start eliminating your outstanding bills. We help our clients save up to 54.04% (before fees) of what they would have paid to erase their total debt without assistance.
Here’s a look at more of our stats from 2023:
- Total clients helped: 12,406
- Total clients enrolled into our debt relief program: 3,348
- Total amount of debt enrolled: $82,782,591
- Average client debt enrolled: $24,753
Get started with a free consultation so we can get to know your needs. Want to know more about how we’ve helped fellow New Yorkers and residents across the U.S.? We’re happy to share our client reviews.
Types of Debt for Relief in New York
Read below to learn more about the top types of debt New Yorkers face:
Credit Card Debt
With inflation raging in the aftermath of the pandemic, credit card debt continues to rise across the U.S., topping 900 billion in quarter four of 2022. The cycle of mounting credit card debt becomes difficult to break as many individuals charge essential items to stay ahead. You can even charge basic utilities on a credit card through automated payments.
Unfortunately, paying the minimum on your balance each month can still leave you deeply in debt. Here’s a look at what you’d actually pay over a three-month period if you only paid the minimum balance of 2% on a $1,300 payment with 19% interest:
|Payment on Principal
|Interest Fees (19%)
|Total Minimum Payment
|New Principal Balance
After making the minimum payments for three months, you’ve paid only $76.45 toward the principal and $59.70 in interest. Credit card companies allow minimum payments because you pay more in interest over the years it takes to make the full repayment.
Additionally, missed and late payments can also lower your credit score, making it difficult to secure a loan or open new credit card accounts in the future. If you’re wondering what your credit looks like, consider requesting a credit report online. You’re entitled to a credit report from each reporting agency at least once a year. Viewing your report allows you to make sure all information listed is accurate and request changes if you find errors.
TurboDebt has helped individuals and families who face overwhelming credit card balances find debt relief in New York and across the country. If you’re dealing with fees or trying to pay the minimum balance each month, consider connecting with our professionals to learn more about your debt relief options.
As a cultural and business center, small business owners in New York City and beyond often take on debt to sustain a shop or service. Taking out a personal loan for your business can drain your own finances as you make payments beyond your regular expenses for your own household.
A divorce can leave you with debt after paying for items such as legal fees or relocation. You may even face a loss of assets after reaching a settlement in court. Going from two incomes to one to afford a mortgage or pay for car loans can quickly drain your resources too.
During a divorce, debt is typically split for joint accounts or assigned to the individual whose name appears on the initial contract. For example, if you co-signed a lease with your spouse, you’ll both owe the balance. State laws and court rulings can also alter who carries a debt after divorce proceedings, leaving you with more debt than you were prepared to take on once you legally split.
When you’re ready to explore ways to start rebuilding your wealth, TurboDebt is here to assist you in finding the best debt relief plan after a divorce.
With 16.1% of the population over 65, New York is home to plenty of retirees living on a fixed income. Although many individuals plan for retirement, pensions and stored wealth may not offset the costs of an unexpected medical debt or necessary home repairs. Even the inflationary economy can drain your monthly income with no additional influx of cash in sight.
Many New Yorkers also struggle with the burden of expensive medical bills. After an unexpected health issue or even an elective surgery, you may find yourself shocked by the cost of your health care.
Unsecured debts like medical bills often come with high penalties for unpaid balances. Creditors can quickly turn you over to debt collectors whose incessant phone calls can make you feel trapped and stressed when you don’t know how to afford the bill.
Finding a way to settle your debt is an important first step to paying off high medical bills so you can restore your financial freedom. TurboDebt can help you take that step toward debt-free living.
Debt Relief Options
Consider the following options as you pursue debt relief:
One way you can reduce your debt to a reasonable amount is to complete a debt settlement. The process of debt settlement involves negotiating with a creditor to reduce the balance you owe. While you could contact a creditor directly, debt settlement companies manage your outstanding balances by making settlement offers on your behalf, often drastically reducing your overall debt.
A debt settlement organization also collects your payment and sends it to your creditors to ensure you pay the agreed amount on time. In some cases, you may be asked to defer payment until you, the debt relief organization, and the creditor agree to a settlement. If the agreement isn’t reached, you may owe more for late fees and missed payments.
|Reduces your debt quickly
|Incurs more fees if settlement not reached
|Provides assistance in making full, timely payments
|Uses financial professionals for debt negotiation
Debt consolidation is a form of debt relief using another type of payment structure to move your debts into a lump-sum payment. When you take out a debt consolidation loan, you have the chance to pay off all your debts at once and instead pay a single monthly amount towards the loan.
Securing a consolidation loan can be tricky if you have poor credit since lenders see you as a risk. But if you have a good credit score, lenders may offer you a loan with a lower interest rate. If you can manage the costs of the loan each month, this option may help you organize your finances and end multiple interest payments.
|Organizes your debts into a single payment
|Can be difficult to secure with fair or poor credit
|Eliminates multiple interest payments
Credit counseling is a coaching program that helps participants find ways to overcome their debts. Although you can find some for-profit services, most credit counseling agencies operate as nonprofits, with the goal of assisting people in reorganizing their financial priorities.
A credit counseling agency may require you to take classes in personal finance and debt avoidance strategies. Once you enroll in a program, you’ll typically get connected with a credit counselor who works with you as long as you partner with the organization.
|Many free options available
|Not a specific debt relief plan
|Provides training for financial success
|May require extended time for coursework
Debt Management Plan
Creating a debt management plan is typically part of the credit counseling process. Credit counseling and debt relief programs use debt management plans to map out your payment structure or to reach an agreement with a creditor.
Some debt management plans become more like a contract when creditors agree to accept specific monthly payments to eliminate high-interest debt like credit cards. Debt management plans become effective tools when you and your credit counselor or debt relief professional follow them to reduce or eliminate your financial obligations.
|Typically free to set up
|Creditors must agree to it
|Often an effective tool to help pay off debt
Although a less common solution than other debt relief options, debt forgiveness can benefit individuals in specific situations related to income level or profession. Most debt forgiveness programs are administered by the government, but some private organizations may offer forgiveness under special circumstances.
When you qualify for a debt forgiveness program, creditors either reduce or eradicate your debt, instead of requiring you to pay back what you owe.
If you work in a field of public service, such as teaching, you can find programs for student loan forgiveness if you meet certain professional requirements. The Department of Housing and Urban Development (HUD) also offers help to those facing foreclosure or struggling to make mortgage payments.
|Eliminates or drastically reduces your debt
|Specific requirements are often based on income or profession
|Uncommon among private institutions
Filing for Bankruptcy
Bankruptcy eliminates or restructures your debt through a legal process. Once you decide to declare bankruptcy, you’ll work with legal professionals to determine what you can afford to pay back to your creditors.
In bankruptcy, you probably won’t pay the total debt amount, but the courts can decide to liquidate or sell your financial assets to pay off a portion of your outstanding balances. Individuals file either Chapter 7 or Chapter 13 bankruptcy, assigning financial control to the legal system as the deciding factor in how you reset your finances.
Bankruptcy also negatively impacts your credit for years, making it harder for you to secure a loan or open new credit accounts for long after your bankruptcy proceedings.
|Eliminates or drastically reduces your debt
|Ruins your credit for up to 10 years
|Involves court-ordered liquidation of assets
Proven Debt Relief Through TurboDebt
Plenty of organizations offer debt relief, but finding one that works hard to help you accomplish your goals can make the difference between whether you cross the finish line to become debt-free. Be wary of scams and only share your personal information with a reputable program. Read reviews and visit the organization’s website to research the process.
At TurboDebt, we’re dedicated to helping you successfully navigate the debt relief process. We want to make it as easy as possible for you to start saving again and building the wealth that helps you live your best life.
Let us put our accredited debt negotiation services to work for you. After an initial consultation and financial analysis, we’ll learn more about how we can structure a debt relief program that meets your needs.
Whatever path you choose, spend time learning more about your options and take the first step toward living as a debt-free New Yorker.
Take Control of Your Debt!Get Your Free Consultation
Debt and Financial Hardship Resources
Here are some ways to get help if you’re not ready to pursue debt relief or you require immediate assistance to meet your basic needs:
Temporary Assistance Programs
- Family Assistance: Offering help to low-income families with a child living in the home, family assistance provides cash assistance for up to 60 months.
- Safety Net Assistance: This program provides cash assistance for single individuals, couples without children, children not living with a parent, or families disrupted by alcohol or drug abuse from another member of the household.
- Emergency Benefits: Emergency assistance helps residents resolve an immediate need, such as fleeing domestic abuse or homelessness.
Housing Assistance Programs
- Housing Choice Vouchers: The Department of Housing and Urban Development provides help with rent for qualifying participants based on annual gross income and family size.
- HUD Homes: The HUD also offers special programs such as dollar houses to help low- and middle-income families afford single-family homes.
- Homeless Shelters: New York State’s Office of Housing and Support Services provides assistance for homeless individuals seeking shelter or other services.
Free Transportation Programs
- C.A.R.T: The Community Arranged Resident Transport Program transports seniors to social events, medical appointments, and other essential destinations.
- Downtown Connection Bus: Those living in NYC can ride free along the route covering areas across lower Manhattan and Battery Park City.