Like most states in America, Pennsylvania residents suffer from debt. It is mainly concentrated on credit cards, auto, and student loans. Debt in Pennsylvania peaks around middle age with most people paying off the majority of their debt before retirement.
However, young Pennsylvania residents have student loans and auto loans that weigh them down. Debt settlement and debt relief options can help you get control of your debt whether it is large or small. Many different options allow people to get their finances back under control and put their wealth back into their hands where it belongs.
During debt settlement, you will work with a company that will negotiate with creditors on a settlement term for you. Most contracts with debt settlement companies require you to put away a certain amount of money in savings every month.
Then, when the settlement ends, you will pay the company. The plans are usually 3 years long but could be longer depending on your debt amount. During the time you are putting away money for your settlement, you will not be paying your creditors. This means your credit score will significantly drop for a few years.
Consolidating debt involves taking all of your debt, including from credit cards, and putting it into one monthly payment plan. It usually involves taking out a personal loan with a lower interest rate than what your credit cards have.
This is a better option if you need to combine debt from several different areas. It also makes payments easier and is less to remember each month.
Debt management will require discipline and budgeting. If you have small amounts of debt or need help getting finances together, debt management can show you where you are overspending. You can then save this money and use it to make high payments on your credit cards.
Debt counselors can help you with debt management and budgeting. They can also show you debt settlement and consolidation options. Working with a counselor makes the process much easier because they are experienced professionals. They can also look at your situation from a new perspective and decide which method would be the most beneficial to you.
The average Pennsylvania resident has $2,890 in credit card debt compared to the $2,780 national average. While they are close to the average American, that is still quite a bit of debt to be carrying around.
The average interest rate in Pennsylvania is 18%. So, if you had $5,840 in credit card debt and only made the minimum payment, you could collect almost $4,713 in interest. It would also take you close to 7 years to pay off. The principal balance might not seem like much to start, but once you see the potential to earn interest, you will see how much you might end up owing as the years go by.
Pennsylvania has a 6-year statute of limitations. After 6 years, the creditor or lender is not allowed to sue or take legal action. 6-years is a pretty standard time but is a little longer compared to other states with 4- or 5-year statute of limitations.
Nationwide, Americans have about $36,730 in mortgage debt while Pennsylvania residents have about $26,740. People living in Pennsylvania have about $9,000 less in debt than most Americans when it comes to mortgages.
Student loan debt is about $5,730 for average Americans and is about $6,520 in Pennsylvania. The average Pennsylvania resident has about $800 more in student debt than other Americans. However, more of the population has been to college compared to the rest of the nation.
37.8% of Americans ages 25 to 34 have a college degree, while 42.8% of Pennsylvanians have a degree in the same age range.
Auto debt in Pennsylvania is around $4,380 while the average American has $5,00 in auto loan debt. So, the average Pennsylvanian has about $600 more in auto debt.
Debt relief programs like consolidation and management will affect your credit score minimally. Taking out a personal loan will make your credit drop for a few months to a year but should bounce back up if you are making all the payments on time.
Debt settlement will affect your score the most because it involves faulting on payments and not paying the creditors on time. Once you reach your settlement and make a large payment, your credit could still take years to get to a good level.
Every debt is unique, and every debt relief program is also unique. A debt relief program should be tailored to your needs and situation. No matter your debt amount, credit score, or income, there is a debt relief program for you.
Consolidation might be better if you have a stable income and need to pay down credit cards. Settlement is better for large amounts that you can put away savings for. Settlements can be used even if your debt has been with a collector for several years. Management would be the most beneficial if you have low debt and are making enough money to budget and make payments higher than the minimum.
Here at TurboDebt we can give you the help you need for your debt today. We offer counseling and planning for many debt relief programs and will be able to advise you on what plan is best for your unique situation.
With our three-step process, including strategic planning, advising, and consulting all of our plans work to help you control your finances and find a path towards a debt-free life. We understand that debt relief is not one size fits all and are committed to helping your financial situation. Find debt relief in your state today.