Rhode Island Debt Relief

In a Nutshell

When looking for debt relief in Rhode Island, it's critical to understand your options. At TurboDebt, we help people with their credit card, medical, payday, and other debts every day. Our goal is to help you figure out the best course of action for your unsecured debt. With help from our program, we saved Rhode Island residents an average of 59.81% of their total debt before fees last year. Don’t hesitate to reach out to see how much you could save, or read on below to get all the information you need on debt, financial hardship resources, and relief in Rhode Island.

Rhode Island: An Economic Profile

Rhode Island may be the smallest state in the nation, but it punches above its weight in cost of living. In Providence, for instance, housing costs are 18% higher than the national average. Utilities cost 25% more, while groceries cost 9% more than the national average. The food, however, is quite affordable, with abundant seafood.

Against a per capita income of $39,603, Rhode Island residents carry an average personal debt of $14,599, of which $5,256 is credit card debt. Without intervention, a debt-free life would be a dream for many residents of Rhode Island.

The state sits on the nation’s east coast and is the smallest state at 48 miles long and 37 miles wide. It has a population of over 1.1 million residents.

As of 2022, Rhode Island had a GDP of $55.46 billion at an annualized growth of 2.1% over the past five years. The five largest sectors in their contribution to the GDP are:

• Real Estate & Rental & Leasing - $7.5 billion
• Healthcare & Social Assistance - $5.459 billion
• Finance & Insurance - $5.048 billion
• Manufacturing - $4.558 billion
• Professional, Scientific & Technical Services - $3.9 billion

The largest five industries are commercial banking, colleges and universities, property, casualty and direct Insurance, hospitals, and public schools. Altogether they contribute a total of $29.7 billion in revenue annually.

Unemployment stands at 3.4%, with 562,000 employed across the private and public sectors, with the average income per household being $97,908. The typical Rhode Island resident has a debt-to-income ratio of 1.62.

The debt-to-income ratio forms part of the credit report lenders use to decide whether to give a loan and at what cost.

How Does Debt Relief Work in Rhode Island?

Rhode Island debt relief involves the application of various debt relief options to help alleviate your indebtedness and put you on the path to a debt-free life. These options apply to secured and unsecured debts.

Federal and state government agencies, non-profit organizations, and debt relief companies run debt relief programs in Rhode Island. All begin by evaluating your financial situation and recommending debt management programs that best suit the state.

Among the most effective options for relief tends to include some more of debt negotiation. In this instance, a company will work on your behalf to lower the payment plan to something more manageable. If an agreement is reached, it may prevent the adverse effects of additional interest accumulation and time to pay off debt.

TurboDebt is one of the top-rated companies that provides effective debt relief services in Rhode Island.

Rhode Island Debt and Finance Statistics

Based on our research, here are the most important statistics when it comes to debt and the financial situation in Rhode Island:

Average consumer debt

The average household debt in Rhode Island was $51,170 last year. This included a mortgage at $34,680, $3,540 in credit card debt, $5,640 in student loans, and $3,970 in auto loans.

The average non-mortgage debt in Rhode Island came in at $37,033 in 2022. This included all categories of household loans except the mortgage. Additionally, mortgage debt stood at $109,268, recording the highest nationwide increase of $15,896 from 2021.

Credit card debt

The average Rhode Island borrower carries 3.3 credit cards and owes the credit card companies $5,102. This is 3% higher than the national average. On average, the credit card has a limit of $12,679.

Defaults on credit card bills in Rhode Island are at par with national averages at 0.57%, ranking 23rd countrywide.

The Statute of Limitation In Rhode Island for credit card debt is ten years. A credit card company cannot seek to recover a credit card debt that is ten years old.

Auto loan debt

As with elsewhere in the country, a car is a near necessity. However, it has also proved to be a debt trap in Rhode Island. Each Rhode Islander owes an average auto loan balance of $16,465, a 7% increase from 2020. For a new car, the average monthly payment comes to $532, while for a used car costs $333.

The state has the highest car loan interest rates at 5.11% annually. Coupled with car taxes, owning a car in the state can quickly put you in a tight spot, especially if you miss a payment. Newer cars, particularly the popular SUVs, take longer to pay off. And remember, auto loans that take longer to pay off cost more as you pay the interest longer.

Mortgage debt

In 2020 homes in Rhode Island cost about $283,000. Though cheaper than the national average by about $12,000, they are hardly affordable for the ordinary Rhode Island resident. At $283,000, a typical home costs four times as much as the median household income of $71,169.

As a result, some 66.3% of homeowners hold mortgage debt of $217,000 on average. Monthly mortgage costs $1,932, nearly 35% of the average monthly income.

Student loan debt

Rhode Island residents owe the federal government $4.7 billion in student loans. Each of the 156,000 indebted residents owes $32,936. Of the students who graduated in 2019-2020, 64% graduated with student debt, each owing about $36,791 to the government and private institutions.

About 7% of the residents have defaulted on their loans for 90 days and more and may require assistance with debt relief. Reasons for default include reduced or lost income.

Bankruptcy

In 2022, 793 people filed for bankruptcy in Rhode Island, a sharp drop from almost 5000 people in 2011. Eight percent of the filings were pro se – people who chose to represent themselves.

In Rhode Island, as in the rest of the United States, bankruptcy filings are made under Chapters 7, 11and 13 of Title 11 of the United States Code, aka Bankruptcy Code.

Filing under each of the chapters has different implications. Under Chapter 7 bankruptcy, a bankrupt is discharged from all their debts except a few, like child support arrears and tax debts. Under Chapter 11, the bankrupt can reorganize and pay off their debts without losing property, allowing them a fresh start.

Bankruptcy is an emergency debt relief program that helps stem an unmanageable debt situation that could ruin you.

Average income and employment

Out of 1.1 million Rhode Island inhabitants, over 562,000 are employed in the public and private sectors. The public sector employs the majority, with the rest divided among the private sector.

The per capita income is $39,063. The median household income is $74,489, while the average household income is $97,908. Only 9% of households make over $200,000, which is considered high income.

Most earn less than the $34,000 recommended as a living wage, with 70% of single parents in two-child households being the most affected. These are the ones at high risk of runaway debt and in dire need of debt relief programs.

Credit score

Rhode Island has an average credit score of 723, which according to FICO’s ratings, is good. The score varies by income, age, generation, and other factors. FICO calculates your score by using payment history, the amount owed, length of credit history, and new credit and credit mix.

The score determines your access to loans and the cost of accessing them.

Identity theft

Rhode Island is among the states worst hit by identity theft, with 2,857 cases reported per 100,000 residents. The most vulnerable members of the population include kids and young adults under 29 and seniors over 60.

Identity theft entails using your identity for financial gain or as a mask for criminal activity. Report to the police as soon as you discover identity theft. Also, take precautions to safeguard access to your finances and financial information.

Banking and tax info

There are about 19 local and national banks that operate in Rhode Island. To open an account in one of them, you must provide contact information and some valid form of identification. Some banks require a minimum opening deposit amount.

Rhode Island individual income tax is graduated from 3.75% - 5.99%. This comes to a per capita individual income tax of $1,604.

Corporate income is charged a flat 7%, as is the state sales tax on goods, except groceries and clothing below a specific value. Rhode Island levies a property tax at $1,298 per $100,000 in assessed home value.

How TurboDebt Helped Rhode Island Residents Get Debt Relief in 2022

TurboDebt has helped many residents of Rhode with their debt. In 2022 alone, our debt relief company assisted a total of 428 individuals and enrolled 154 of them. The total enrolled debt for the same year was $3,530,496, with each enrolled client averaging $22,925 in debt. Thanks to the professionals at TurboDebt, residents of Rhode recorded an outstanding savings of 59.81% on average before fees.

Top Types of Debt to Get Relief from in Rhode Island

Here are the most common types of debt from which TurboDebt can help you get debt relief in Rhode Island:

Credit card debt

Households in Rhode Island carry about 3.3 cards from different credit card companies and an average credit card debt of almost $5,500. Against an income of just over $5000, many cardholders soon fall behind on their credit card bills.

Since they are unsecured loans, the interest rate on credit cards is proportionately higher, and default pushes the cost higher, making it harder for the cardholder to pay it off without assistance. Also, defaulting on your credit cards ruins what good credit you may have.

A Rhode Island credit card debt relief company can help you renegotiate easier repayment terms.

Divorce debt

Divorce is as financially destabilizing as it is socially and mentally traumatic. Often divorce will leave you with hefty legal fees, debt obligations incurred during the marriage, possible divorce settlement, and alimony.

You’ll likely lose some tax breaks and shoulder the cost of starting over. You may fall behind on other debt obligations and incur higher interest and late fees.

However, a Rhode Island divorce debt relief company will offer you options, including emergency debt relief, to stop the financial disaster.

Business debt

Debt is nearly inevitable for small businesses in Rhode Island. Improperly managed debt may cause cash flow problems which affect inventory purchases, overhead funding, and payment of wages. If poorly managed, the debts may lead to the business collapsing.

Rather than closing down or resorting to bankruptcy, the business can turn to a Rhode Island business debt relief company to negotiate for a more convenient debt management plan.

Medical debt

Rhode Island has some of the best medical coverage in the nation. The Medicaid program offers medical coverage to those with low income. Health services are also extended throughout the state.

However, it is still possible to fall through the cracks and have to foot medical bills out of pocket, which may burden one with unmanageable medical debt. For instance, in 2020, 4.8% of Rhode Island inhabitants had no medical coverage.

Rhode Island medical debt relief may come in handy to help such people overcome debt and live debt free.

Retirement debt

Rhode Island is laid back, with fantastic seafood – just the ideal retirement place. However, it ranks among the most expensive states to retire. It costs over $1.6 million to retire comfortably against retirement incomes of just above $50,000.

Senior residents will likely find themselves in debt, especially for utilities and medical cover. TurboDebt offers Rhodes Island retirement debt relief to help seniors manage their debt.

Options for Debt Relief in Rhode Island

Here are some of the most effective debt relief options to help you discharge your debts so you can live a stress-free life:

Debt management programs

A debt management program is a plan set up by a credit counselor after evaluating your financial situation. The aim usually is to get you off unmanageable credit card debt by convincing the credit card companies to restructure your payment.

You close your lines of credit and benefit from lower payment amounts and lower interest rates. Debt management plans let you pay off personal loans without further credit.

Debt consolidation loans

A debt consolidation loan is a way to refinance smaller multiple loans so that you are only left with one payment to make, which is manageable. The total debt is brought under one manageable loan.

Debt consolidation loans can be cheaper than the multiple loans you pay off, but only if you do it right. Choose a loan with much lower interest than the debts you are consolidating. Or, choose one with zero interest on signup and work to repay as much of it as possible before the interest kicks in.

Debt settlement

A debt settlement agreement is an agreement with your creditor, often the credit card company, to let you pay off only a portion of your debt on the condition that you do it in one lump sum.

Often this is a more attractive prospect to your creditor than defaulting. Generally, the credit company will be willing to settle for close to 50% of what you owe. You may do this yourself or use a debt settlement company.

A reputable Rhode Island personal debt relief company can negotiate this on your behalf.

Debt Counseling

Credit counseling usually involves empowering you to take charge of your financial affairs. Often the process involves evaluating your financial situation and helping you choose the appropriate debt relief option.

Sometimes, like in debt management programs, the credit counseling agency may negotiate and administer the agreement on your behalf. Non-profit credit counseling is a good help if you can not afford paid services.

Debt forgiveness

The creditor may decide to release you of the whole or part of your obligation towards them. This may be at their will or your request.

Student loans are popular candidates for debt forgiveness by both the federal and state governments. Rhode Island will forgive certain student loans if the debtors work in particular areas of the state.

Debt and Financial Hardship Resources

These are some of the services and resources available in Rhode Island to help you should you find yourself in financial hardship:

Temporary assistance programs

Most of the temporary assistance programs indicated here are offered or administered by the Department of Human Services (DHS) in the Office of Health and Human Services.

The services and programs include:

1. Energy and water assistance

The program ensures that residents can access utilities like energy and water, even if they cannot temporarily afford them. Lack of energy is critical and may be fatal in the winter months.

2. General Public Assistance (GPA)

GPA offers cash to adults from 18 to 64 years old who cannot work. The assistance lasts only for the period it takes to determine their SSI eligibility.

3. RI Works program

This program seeks to help parents of high school students or younger stabilize in the long run by offering employment readiness capabilities and a temporary cash stipend. The primary aim is to encourage beneficiaries to be gainfully employed.

4. SSI State Supplemental Payment

SSI offers supplemental income to recipients of federal SSI welfare assistance

5. Supplemental Nutrition Assistance Program (SNAP)

The federal government offers SNAP to supplement the nutritional needs of citizens in temporary financial hardship.

State health and human services

These include Medicaid and Medicare programs which offer medical coverage to low-income groups.

Child care

This program helps parents and guardians access affordable, high-quality, safe childcare for their children while they work.

Shelters for the homeless

Rhode Island offers an emergency housing service that connects you via a provided phone number with emergency shelter facilities if you’re homeless.

Free transportation services

The Rhode Island Public Transit Authority (RIPTA) sometimes offers free transport on specific routes. Always check for availability with RIPTA or any of the regional transit systems within Rhode Island.

Get Debt Relief in Rhode Island Today

Depending on your unique debt situation, you may wish to pursue one or multiple debt relief options discussed in this article. Take care not to fall into the hands of scammers or inexperienced service providers who can only cause you more financial distress. Be sure to do your due diligence before coming to a final decision, and always seek professional guidance from reputable companies such as ours.

TurboDebt has experience providing debt relief services nationwide, with thousands of happy customers and positive reviews online. Get in touch with us today for a free consultation.