Debt Relief for Massachusetts Residents
4 MIN READ
Published April 03, 2023 | Updated October 07, 2024
Expert Verified
Written by Christie Hudon
Edited by Wes Silver
Reviewed by Brad Reichert
In a Nutshell
The Bay State continues to draw visitors and residents alike for its New England charm and economic and educational opportunities in areas like Boston and Cambridge. But, with rising unemployment and inflation throughout the state, many residents find it challenging to thrive financially.
In fact, 10% of the Massachusetts population lives at the federal poverty level. Surprisingly, The Bay State also has one of the highest median incomes and average credit card balances, making debt relief a need for both the affluent and lowest earners.
Keep reading to learn more about the ways debt relief can change your financial situation as a Massachusetts resident.
Your Options To Get Out of Debt in Massachusetts
Credit Counseling
Certified credit counselors provide Massachusetts residents with advice and direction to start the debt relief process.
| How It Works in Massachusetts |
| Consider working with either a nonprofit or a private credit counseling organization offering programs in your area or through online services. Once you enroll in a program, you’ll get connected with a certified credit counselor who can walk you through your next steps for financial education and debt relief. |
| Pros |
| Credit counseling offers cost-effective services to aid consumers in making better financial decisions and mapping out a plan to relieve debts. |
| Cons |
| Credit counselors only give advice. It’s a participant's job to act on their suggestions and start paying off debt. |
| Cost |
| Credit counseling offers low-cost or free services (to qualifying low-income residents). You’ll typically pay a small initial fee to join a program. |
| Stats |
| More residents have chosen the option of debt settlement than credit counseling in the past decade. This may be because many of these programs also offer advice about your financial situation coupled with a program to start making payments on your debt. However, a credit counselor is also an effective way to get expert advice about your credit history and score. |
| Resources |
| Find out how credit counseling provides helpful advice for consumers. |
Debt Management
Debt management programs (DMPs) offer a practical solution to debts, using a professional organization to facilitate payments to each of your creditors.
| How It Works in Massachusetts |
| Bay Staters can opt to work with a credit counseling agency or a private company offering debt management services. First, you’ll make a plan you and your creditors must agree to before setting up monthly payments through the organization. Finally, you’ll send funds to the agency that transfers each payment to your creditors. |
| Pros |
| DMPs help you avoid late fees and keep track of a single monthly payment that’s sent to the organization. |
| Cons |
| You’ll probably have to close out all but one of your credit cards while on the program to avoid spending money on anything except essentials. |
| Cost |
| A DMP typically charges a small enrollment fee of around $40. However, you’ll also pay a monthly fee for each account the organization administers. These fees usually range from $20-30 per month. |
| Stats |
| DMPs can cover a range of consumer debts, making this an attractive option for Bay State residents carrying multiple large balances. Massachusetts’ average total consumer debt is $127,277, proving that debt relief options are essential for residents. |
| Resources |
| Learn more about the ways debt management programs aid consumers in overcoming debts. |
Debt Consolidation
Massachusetts residents can also opt to pay down debt through a consolidation approach using a few different methods.
| How It Works in Massachusetts |
| Bay Staters may want to open a zero-interest balance transfer credit card to catch up on payments without added fees. Another option is to take out a debt consolidation loan big enough to pay off every current debt, leaving residents with a single monthly payment toward the new loan. |
| Pros |
| Zero-interest credit cards give you some breathing space to start paying off a big chunk of your credit card debt, especially if you’re paying interest on multiple cards. Opening a debt consolidation loan can simplify the payment process and may allow you to pay a lot less in interest. |
| Cons |
| Using a zero-balance transfer card can really backfire if you don’t pay off your debt before the introductory interest-free period ends. After the initial 12-18 months, you could be stuck paying up to 20% interest on the balance of your new card. To secure a lower interest rate on a loan, you’ll need a strong credit score in the fair to good range. With poor credit, you’re less likely to access the lower interest rates that make this option worth it. |
| Cost |
| You may pay a small balance transfer fee when you open up a new card. Be sure to read the contract carefully to determine how much you’ll pay in fees and the new interest rate after your interest-free period ends. Calculating the cost of a debt consolidation loan depends on the total amount of the loan plus your interest rate over the time it takes you to pay it off. It’s important to do these calculations before you sign the new loan to ensure you’re making the best choice for your finances. |
| Stats |
| Massachusetts residents have an average credit score of 732. This strong number indicates that plenty of Bay Staters are likely to qualify for better interest rates on a debt consolidation loan. |
| Resources |
| Read more about debt consolidation loans to discover if they’re the right choice for your financial situation. |
Debt Settlement
Settling debt is often an effective way to eliminate part of your outstanding debt and make paying it off more achievable.
| How It Works in Massachusetts |
| The goal of a settlement is to reduce what you owe by paying creditors a lump sum towards your debt instead of the full amount. Residents of the Bay State can contact creditors on their own or leverage the expertise of a debt settlement company, such as TurboDebt, to negotiate a settlement. |
| Pros |
| Debt settlement can save you up to 50% of what you owe and help you pay off your debts faster. |
| Cons |
| While you stop making payments to save for the lump-sum payoff, your credit score drops significantly. |
| Cost |
| Debt settlement companies charge fees ranging from 15-25% of your total enrolled debt once you finalize your settlement. |
| Stats |
| High credit card debt is a leading way Bay Staters fall into a cycle of debt payments. Massachusetts residents carry an average credit card debt of $8,447, one of the biggest in the nation, making debt settlement a viable option for many. |
| Resources |
| Discover how debt settlement works and how it can reduce your total debt payment. |
Bankruptcy
When all other debt relief options fail, bankruptcy is a last resort for Massachusetts residents.
| How It Works in Massachusetts |
| Individual consumers typically file for either Chapter 7 or Chapter 13 bankruptcy through the Massachusetts Bankruptcy Court system. |
| Pros |
| Bankruptcy can effectively discharge most of your debts, and you’ll get to hit the reset button on your finances. |
| Cons |
| Declaring bankruptcy comes with long-term consequences to your credit history and score, making it harder to secure loans or open new credit accounts in the near future. |
| Cost |
| Attorney fees can range up to nearly $5,000, depending on the services you require. You’ll also pay court fees to file documents throughout the bankruptcy process. |
| Stats |
| In 2023, a total of 3,869 Massachusetts residents filed for some type of bankruptcy. |
| Resources |
| Learn more about life after bankruptcy and what this process involves. |
What You Need To Know About Debt in the State of Massachusetts
Statute of Limitations on Debt Collections in Massachusetts
Massachusetts’ Statute of Limitations on Debt Collections limits how long a creditor can take legal action against a consumer for not paying a debt. Although this doesn’t absolve debtors, it allows consumers to work toward paying off debts without the concern of a lawsuit after the time limit expires.
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 6 years |
| Promissory Notes | 6 years |
| Open-Ended Accounts | 6 years |
| Oral Agreements | 6 years |
| Medical Debt | 6 years |
Student Loan Forgiveness in Massachusetts
The State of Massachusetts offers several loan repayment programs to assist professionals in paying off educational debts, including the following:
- Massachusetts Loan Repayment Program for Health Professionals (MLRP): The MLRP program offers loan repayment assistance for qualifying primary healthcare professionals.
- Educator Loan Repayment Program: The Bay State offers up to $7,500 for qualifying teachers to cover college expenses. Massachusetts educators can apply annually for up to four years.
- John R. Justice Student Loan Repayment Program: This program provides loan repayment assistance to prosecutors and public defenders.
Resources for Financial Assistance in Massachusetts
Massachusetts residents facing financial difficulties can access assistance through a variety of state and federal programs administered locally. Here’s a list of some of the top financial assistance programs available in the Bay State:
- Cash Assistance: Eligible Massachusetts residents can receive help to cover basic living expenses through an Electronic Benefits Transfer (EBT) card that’s issued once they join the program.
- Transitional Aid to Families with Dependent Children (TAFDC): The TAFDC program provides families with economic assistance to cover essentials such as housing and utilities. The program may also cover education and health insurance and provide employment opportunities.
- Emergency Aid to the Elderly, Disabled, and Children (EAEDC): Massachusetts’ EAEDC program offers financial support for individuals, including those who are unable to work due to a disability, adults caring for children who aren’t closely related, and seniors waiting for Supplemental Security Income (SSI) payments.
- Supplemental Nutrition Assistance Program (SNAP): The SNAP program (formerly known as Food Stamps) helps low-income families purchase nutritious food items.
Although Massachusetts stimulus checks have ended, you may also qualify for tax benefits through certain deductions. It’s a good idea to consult with a local tax professional to find out if you can save money through any of these options.
Get Professional Help Paying Off Your Debt
Residents of the Bay State are feeling the burden of debt as they struggle to pay high credit card bills and cover living expenses in the midst of record inflation. Many need options to overcome the cycle of late payments and compounding interest fees.
Sometimes, the best solution to relieving debt starts with getting professional help. TurboDebt offers support through customized debt relief programs. When you contact us, we’ll set you up with a free consultation to help you determine your options and better understand your unique financial situation.
Our clients from Massachusetts have already saved an average of 54% of their total debt before fees. In fact, you can read over 15,000 5-star TurboDebt reviews across Trustpilot and Google to get the scoop from thousands of satisfied customers.
Reclaim your financial freedom and break free from debt. It only takes a few minutes to get started today!
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