Debt relief in New Jersey can be a helpful way to manage finances for many families there. It can provide stability during unemployment, help weather fluctuations in the real estate market, and address other debts. Because every household’s financial situation is unique, it’s important to find a solution that fits your needs.
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It’s no secret that many Americans are struggling with credit card debt. But in the Garden State, the problem is especially acute. The average household owes nearly $10,000 to credit card companies. More than 7% of credit users are more than 90 days behind on their payments. And credit utilization sits just above 27% – anything higher than 30% will decrease a consumer’s credit score. That makes it even more challenging for cash-strapped Jerseyans to find solutions that provide debt relief.
Average Credit Card Debt Stats In Nzew Jersey
Debt is a problem that affects everyone, no matter who you are or where you live, here is how debt is affecting NJ:
- Average credit card debt per household: $9,454
- Average credit limit available: $20,901
- Most popular credit card: Travel rewards
- Credit utilization ratio: 27.33%
- Average number of cards per person: 3.49
- % of delinquent accounts (at least 90 days past due): 7.3%
- Average credit score: 686
Options For Debt Relief In New Jersey
Making the decision to get rid of your debt is a great step, but it can feel overwhelming to figure out how to do it. The best strategy for paying off debt depends on your financial situation. Review all your options before choosing one – you may find that a combination of methods works best for you.
Debt Consolidation
Debt consolidation can be a great way to manage your debt and make it more manageable. By consolidating all your debt into one loan, you can get a new, fixed interest rate and new repayment terms that can help you pay off your debt based on your income and what you can afford.
There are many methods of debt consolidation, but taking out a personal loan is one of the most popular. You don’t need perfect credit to qualify for a personal loan, but having a good credit score will get you better terms. It’s usually best to start with your local credit union when you’re considering taking out a loan.
Your credit score is one of the most important factors in qualifying for a loan. A cosigner can help you qualify for a loan or get a lower interest rate, but remember to use them cautiously. Falling behind on personal loan payments can damage both your credit scores.
Refinancing
Refinancing your home, auto or student loan can help you save money by getting a lower interest rate. This can reduce your monthly payments and help you pay off your debt faster.
There are many benefits to refinancing your student loans, including the ability to consolidate multiple loans into one easy-to-manage repayment system. When you refinance, you essentially restart your repayment term, which can often result in lower monthly payments. However, it is important to keep in mind that refinancing federal student loans will forfeit your eligibility for certain repayment or forgiveness programs.
When considering refinancing, it is important to remember that a lower interest rate is not guaranteed. You should also think about whether your payments would increase. Sometimes, you can get a longer term on your new loan but the interest rate stays the same. This could result in lower monthly payments. However, because the life of the loan is longer, you will ultimately pay more over time.
Balance Transfer Cards
Instead of using a traditional credit card, consider getting a balance transfer card. With a balance transfer, your outstanding credit card balance is transferred to another card that offers a 0% introductory APR. This can last for around 12 to 21 months and can help save on interest and reduce your overall debt.
High credit card interest rates can make it difficult to pay off your balance in full. A balance transfer can remove the interest charges for a short period, but some transfers may not be able to cover your entire balance. This means you will still be responsible for credit card payments with interest as well as your new credit card balance.
When considering a credit card balance transfer, be aware that there may be a balance transfer fee of around 3% of the total amount transferred. This is something to keep in mind as it can add to the overall debt owed if the full balance is not repaid before the end of any promotional period.
Bankruptcy
Bankruptcy is often seen as a last resort, but it may be the best option for you. Consulting with a bankruptcy attorney can help you understand your options and whether or not you qualify for bankruptcy.
Keep in mind that bankruptcy doesn’t erase all your debts. Depending on the type of bankruptcy you choose, you may still have to make payments on some of your debts.
Bankruptcy can be a complex and difficult process to navigate, especially when you’re not sure what type of bankruptcy you should file for. Chapter 7 and Chapter 13 are the two most common types of bankruptcy, but they work in very different ways. Chapter 7 bankruptcy involves liquidating your assets to repay your outstanding debt after whatever is discharged. This process is relatively quick, taking only a few months to complete, but not everyone qualifies.
If your debt will be consolidated in Chapter 13, some of it may be discharged, but the rest will be reorganized into a manageable monthly payment determined by the court. You will have to pay this off within three to five years, or your assets could be seized.
The cost of filing a Chapter 7 bankruptcy petition is $335, while the cost of filing a Chapter 13 bankruptcy petition is $310. Depending on the ruling, you may be able to get the fee waived or rolled into your repayment plan. You may also be able to pay the fee in installments. However, having a bankruptcy lawyer may end up costing more due to attorney fees.
Final Thoughts
It’s tough carrying around the burden of debt, but luckily there are plenty of options for debt relief in New Jersey. These choices range from low-cost to no-cost options and can help you get on the path to financial freedom.
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As you review your different possibilities, it’s okay to choose more than one or explore them further at a later time. Getting out of debt is unique for everyone, so the best option for you may be different than what works for someone else. Don’t worry about finding the perfect solution – simply taking the initiative to get out of debt and work towards a debt-free life is a big accomplishment.
