The highest levels of consumer debt in New York are mortgages, student loans, and credit cards. The high cost of living also factors into people overspending from month to month and racking up debt.
Debt relief solutions can help you get your finances under control and allow you to breathe easier every month. Debt settlement and consolidation can also help you get back to your wealth quicker by giving you a strategic plan with lower monthly payments.
Debt settlement can be risky and will take some time. Many debt settlement programs will make you have 36 months of savings or more so that you are adequately able to settle all your debts.
A company will negotiate with your creditors to get you a settlement to pay and resolve your debt. Therefore, the program will ask you to set aside money each month to prove you are saving money to pay the settlement. During this time, you will stop making monthly payments to your creditors.
All debt consolidation third-party companies in New York have to be a non-profit corporation or an attorney. New York law also prohibits paying in advance for debt consolidation services. Debt consolidation involves taking all the debt you currently have and putting it into one monthly payment.
The purpose of debt consolidation is to get a lower interest rate and one payment a month versus several payments each month. It will usually involve taking out a personal loan and using the personal loan to pay down high credit card balances.
Debt management takes self-discipline and the ability to make a strict budget for yourself. Debt management will allow you to see where you are overspending and help you find a way to eliminate the spending that is not necessary.
Financial planning and budgeting will help you get your finances under control. Debt management is best for people who only have small amounts of debt and not more than one or two loans they need help with.
Debt counseling is most important if you are planning to go the debt management route. However, having a debt counselor will help you find ways to get any debt under control. They will go over your options with you and see what plan works best for your income and situation.
Consumer debt in New York is higher than in other states in every area except auto loans. The high levels of debt cause many New Yorkers to resort to bankruptcy. There are many other debt-relief options available though.
While credit card debt is about $2,780 nationwide, it is $3,410 in New York. The default rate is about 1.53%. New York is the fourth most expensive state to live in behind Hawaii, Alaska, and California. 14.2% of New Yorkers live in poverty.
With the minimum wage not able to meet the cost of living, many people turn to credit cards to help them purchase vital items and pay bills.
The statute of limitations in New York is 6 years for all kinds of debt. The stature of limitations starts on the date that the debt repayment was due or the most recent payment, whichever was more recent.
After 6 years, the lender cannot sue the borrower for repayment.
The average debt nationwide is $36,730 and is $34,660 in New York. However, about one in 10 New York mortgages are at risk for foreclosure which is much higher than in other states. Florida and Nevada are the only ones with higher foreclosure rates.
Student Loan debt is around $6,320 in New York and is $5,730 nationwide. Like in most states, it is the second-highest debt amount besides a mortgage. New Yorkers have outstanding loans worth that least $66.8 billion or about $4,610 per capita.
This is 11.2% higher than the national average.
Auto Debt in New York is around $3,820, which is considerably less than the national average of $5,000. This is partly because, in metropolitan areas, people do not drive and instead take public transportation or taxis.
Some New Yorkers also buy cheaper cars because they are often parked in the street or other unsafe areas. In general, New York residents hold the majority of their debt on credit cards, and not on auto loans.
Settlements will affect your credit the most while management will affect it the least. With consolidation, your credit will only be affected for a few months and should bounce back to normal. This is if you are making your payments on time and not putting more debt onto your credit cards.
Settlements will cause you the most harm and should only be used if you have a repayment plan that allows you to resolve most of the debt in 3 years or less.
Everyone’s debt is different, and every program will look different. No matter the level of your debt or interest amount, there is always a debt relief program that will work for you. Depending on your credit score, your interest rate could be much lower and repayment time lessened by several years.
Even people with high amounts of debt find options with debt relief programs and are on their way to wealth again.
TurboDebt offers debt relief easily and confidentially, with free online consultations to get you started. We are committed to helping you change your financial situation through advising, consulting, and strategic planning.
The goal is to always break the cycle of debt and make a plan to become debt-free in the shortest amount of time. Once you are debt-free, you will be stress-free. Find debt relief in your state today.