Debt Relief Programs for Virginia Residents in 2024
4 MIN READ
Published March 30, 2023 | Updated October 09, 2024
Expert Verified
Written by Christie Hudon
Edited by Wes Silver
Reviewed by Brad Reichert
In a Nutshell
From historic Williamsburg to the busy capital of Richmond, Virginia residents enjoy a vibrant and cultured state. While Virginia may be for lovers, there’s nothing to love about being in debt. Many Virginians find themselves struggling to pay bills and save money when faced with soaring prices for goods and services.
Virginia residents carry a total average consumer debt of $128,386, some of the highest in the country. With such a high debt threshold, many Virginians need solutions to resolve large balances on credit cards, medical debts, and personal loans. Read on to learn more about debt relief options in Virginia.
Your Options To Get Out of Debt in Virginia
Credit Counseling
Enrolling in a credit counseling program is an effective way to get unbiased financial advice from a trusted source.
| How It Works in Virginia |
| Virginians who enroll in this type of debt relief program get connected with a certified credit counselor through a private or nonprofit agency. |
| Pros |
| With little out-of-pocket costs and solid advice about your credit history and current finances, credit counseling can help you start rebuilding your financial situation. |
| Cons |
| You won’t actually pay off any debt directly, and you typically must commit to specific financial education courses through the program. |
| Cost |
| Consumers facing financial hardship with income below a certain level can often access low or no-cost services from nonprofit credit counseling organizations. Others can access credit counseling at very reasonable monthly fees. |
| Stats |
| In the past decade, an overwhelming majority of consumers have chosen to pursue debt settlement options instead of credit counseling to resolve debts. |
| Resources |
| The Financial Counseling Association of America offers a searchable database to help consumers in Virginia find qualified credit counselors nearby. |
Debt Management
Debt management programs (DMPs) offer Virginia consumers an organized plan for paying off debt.
| How It Works in Virginia |
| Virginia residents create a debt management plan after enrolling in a DMP through a nonprofit credit counseling agency or a private organization. |
| Pros |
| Debt management organizations take charge of your monthly debt payments when you enroll each account into a plan, helping you avoid late fees and missed bills. With this method, you make just one monthly payment to the DMP, and your funds are distributed to each of your lenders on your behalf. |
| Cons |
| Each debt you enroll in the program incurs a monthly fee, and you’ll probably have to close out most of your current credit card accounts to avoid further spending while you’re working on repaying your existing debts. |
| Cost |
| Nonprofit agencies typically charge a startup fee of about $35-40 and a monthly fee between $25 and $35 for each account you enroll in a debt management plan for administering your payments. |
| Stats |
| With a median income of $87,249, many Virginia residents can dedicate part of their incomes to paying off debts through a DMP. |
| Resources |
| Read more about debt management programs and how they work. |
Debt Consolidation
Consolidating debt in Virginia is like a DIY version of debt relief, allowing you to decide the best way to reduce interest and pay off your debts efficiently.
| How It Works in Virginia |
| Virginians have two basic ways to consolidate debt. The first method is to secure a loan from a traditional bank, online organization, or credit union. The second option works best for Virginia residents with lots of credit card debt and involves opening a zero-interest balance transfer card. |
| Pros |
| Debt consolidation loans allow you to basically “reorganize” your debt into a single monthly payment, typically at a lower interest rate and a fixed repayment term. For small to moderate credit card debts, a balance transfer card helps you catch up on payments, typically without interest. |
| Cons |
| To secure a loan at a decent rate, you’ll need a strong credit score. Otherwise, you could end up paying more in interest than you would on your current debts, depending on the terms you qualify for. With balance transfer credit cards, you’ll wind up paying the sky-high standard purchase or cash-advance interest rates (often as high as 29.99%) if you don’t pay off your entire transferred balance within the introductory zero-interest period. |
| Cost |
| Your costs for a consolidation loan depend on how much you owe in total debt plus any monthly interest due based on your consolidation loan’s interest rate. With zero-interest credit cards, you may pay an initial balance transfer fee (usually 3%-5%) plus the principal due on your monthly payment allocated toward reducing your balance. |
| Stats |
| Virginians carry an average credit score of 722. This strong score will likely qualify residents for better interest rates when securing a consolidation loan. |
| Resources |
| Read more to determine if a debt consolidation loan is the right choice for your financial situation. |
Debt Settlement
Settling debt is an opportunity to reduce your total debt by negotiating a one-time lump-sum payment to your creditors in return for them waiving or forgiving the entire remaining balance.
| How It Works in Virginia |
| Virginia residents can negotiate with creditors on their own or work with a debt settlement company to lower their total debt amount. |
| Pros |
| Negotiating a debt settlement often reduces your total debt by about 50% before fees. |
| Cons |
| Debt settlement typically lowers your credit score while you’re working to save up your lump-sum payment to make to your creditors. |
| Cost |
| Debt settlement companies charge fees that range from 15-25% of your total enrolled debt. However, companies can’t charge fees until your debt settlement offer is accepted by both you and your lender(s). |
| Stats |
| Over 50,000 Virginia residents enrolled in debt settlement programs in 2020. |
| Resources |
| Learn more about the debt settlement process and how it can reduce your total debt. |
Bankruptcy
Virginians who exhaust all other debt relief options can try bankruptcy as a last resort to eliminate and pay off debts.
| How It Works in Virginia |
| Virginia’s bankruptcy courts are divided into an Eastern division and a Western division. Residents file a petition for relief under Chapter 7 or Chapter 13 through the bankruptcy court within their residential jurisdiction. |
| Pros |
| Bankruptcy can absolve most of your unsecured debts, often after helping you pay off most of your secured debts, leaving you with a clean financial slate. |
| Cons |
| You may have to sell off assets or follow a court-ordered payment plan to complete the bankruptcy process. Bankruptcy also negatively affects your credit history for up to 10 years after your case is discharged. |
| Cost |
| Attorney fees can range from $750 to nearly $5,000, while filing fees typically cost about $300. |
| Stats |
| A total of 13,004 Virginia residents filed for some type of bankruptcy in 2023. |
| Resources |
| Read a guide about whether Chapter 7 or 13 bankruptcy is the best option for you. |
What You Need To Know About Debt in the State of Virginia
Statute of Limitations on Debt Collections in Virginia
Virginia’s Statute of Limitations protects consumers from creditors who wish to pursue legal action for an unpaid debt. While this doesn’t absolve consumers from paying a debt, it does mean that creditors can’t sue them after a certain time period has passed.
The state of Virginia sets different timeframes for various types of debt. Read below for the Statute of Limitations for the primary types of debt:
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 5 years |
| Promissory Notes | 6 years |
| Open-Ended Agreements | 3 years |
| Oral Agreements | 3 years |
Statute of Limitations on Medical Debt in Virginia
In Virginia, the Statute of Limitations on medical debt lasts five years. This means that creditors can’t pursue legal action against a consumer for unpaid medical bills after five years have passed.
Student Loan Forgiveness in Virginia
While the state of Virginia doesn’t offer any specific student loan forgiveness programs, it does offer various financial aid programs.
Resources for Financial Assistance in Virginia
Virginia residents facing hardship can apply for support programs and resources offered through the state. Here are the key programs for Virginians needing financial assistance:
- TANF: Virginia administers the federal program that provides cash assistance to qualifying residents.
- SNAP: The state offers food assistance through the federal Supplemental Nutrition Assistance Program.
- SUN Bucks: This new program supports qualifying Virginia families in purchasing fresh fruits and vegetables, whole grains, dairy products, and meat.
- Medical Assistance: Virginia offers several medical assistance programs to help residents facing financial hardship cover medical costs.
Although Virginia stimulus checks are no longer being issued, the state provides other opportunities for those needing help. And if you're still waiting on your Virginia state income tax refund, there are a few ways to check the status and get updates on its progress.
Brad Reichert, founder and managing director of Reichert Asset Management LLC, offers another resource for Virginians in need of financial assistance. “2-1-1 Virginia is the Commonwealth’s all-in-one 24-hour information and referral service that provides access to free and confidential emergency counseling, disaster assistance, food, health care, insurance assistance, stable housing and utility payment assistance, employment services, Veteran services, and childcare and family services,” Reichert says.
“Virginians can access resources within their local area by dialing 2-1-1, texting ‘Connect’ to 247211, or visiting 211virginia.org,” he adds.
Get Professional Help Paying Off Your Debt
For many Virginians, a debt relief program is the path toward financial freedom. TurboDebt offers services to help consumers escape the debt cycle and reset their finances while providing guidance and unparalleled customer service throughout the process.
Here’s why we believe Virginia residents benefit from working with TurboDebt:
- No upfront fees to get started
- Customized debt relief plans
- Faster debt repayment through our program
- Excellent customer service evidenced by over 15,000 five-star TurboDebt reviews
We’ve already saved the thousands of Virginia residents enrolled in our program an average of 54% of their unsecured debt. It only takes a few minutes to get started with a free consultation. Contact TurboDebt today to find out if you qualify for debt relief services in Virginia that give you a fresh financial start.
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