North Carolina Resident Debt Relief

Being the 20th most visited state in the U.S, North Carolina knows how to keep people coming. The birthplace of Pepsi, home to the Outer Banks, and the Wright brothers first flight, are just a few of the Tar Heels state’s claim to fame.

However, just like the state’s differing topography, their response to rising debt has varied greatly.

Just like most places in the U.S, North Carolina’s unemployment rate saw an all-time peak during April of 2020, reaching nearly 15%. Although as of June 2022 the state was able to bring that number down to a mere 3.4%, the people of North Carolina are still struggling to climb out of the debt the unemployment left them in.

Our nation as a whole is seeing inflation like we haven’t in years. Consumer prices are up 9.1% as of June 2022, causing the biggest surge in over 40 years.

Rent is increasing, groceries are skyrocketing, and gas is becoming an investment. Just like the rest of the nation, residents of North Carolina are struggling to make ends meet, causing their financial stability to plummet while their debt rises.

According to a U.S. News report covering a variety of financial factors, North Carolina ranked 13th in the nation in overall health and well-being. However, things were much bleaker in the state in terms of job opportunity (No. 28), health care (No. 30) and infrastructure (No. 22).

Those dealing with financial problems feel as though it is a never-ending tunnel from Covid in 2020 to the inflation surge in 2022. Fortunately, there are private and governmental agencies that can help those people in financial need.

Debt Relief Options for North Carolina Residents

The good news for residents of North Carolina is the statute of limitations for debt is three years from the last activity on your account, making it one of the shortest limits in the country.

The best option for those struggling financially is InCharge Debt Solution and its debt management program. The trained and certified credit counselors at InCharge work closely with creditors to consolidate credit card debt, lower interest rates, and create an affordable monthly payment plan that works best for you.

In 2022, the average interest rate for new cardholders is 19.13%. The good news is InCharge works with creditors where they are able to reduce  to around 8% (sometimes lower) for those seeking debt relief.

InCharge is also able to create an affordable plan to pay off credit in  3-5 years with the help of a personalized spending budget. Credit scores are not a factor in enrolling in the program- simply call or apply online to get started.

Here are some of the other assistance programs that are available to people in North Carolina  facing difficult financial crises:

• Debt Consolidation Loan: The goal of debt consolidation loans is to reduce the interest paid on your debt and pay off all credit cards with a single loan. You would pay off the loan in monthly installments, usually stretched out over 3-5 years. However, you will need a good credit score (680 or above) to get a low enough interest rate to make this work. Debt consolidation loans don’t eliminate debt. They simply transfer it from one source to another.
• Debt Settlement: Debt Settlement  means negotiating with a creditor to accept less than what is owed. The process usually takes 2-3 years, during which time late fees and interest make the balance on your debt grow. Ideally, you would want to settle for half of what is owed, but that seldom happens. Lenders are not obligated to accept any settlement offers. This option will be on your credit report for seven years and could lower your credit score by 100-200 points..
• Credit Card Forgiveness Program: This is similar to for profit debt settlement in that the goal is paying less than what you owe. However, there is a huge difference: there is no negotiating in this program. Lenders agree up front to accept 50%-60% of what is owed. You make fixed monthly payments for 36 months and the debt is settled. There is no interest charged during those 36 months. If you miss a payment, the program is canceled.
• Bankruptcy: This is the court of last resort for people in debt, but it might be the best solution available. If other options won’t work and you don’t see a way to pay off debts in five years, bankruptcy can be a solution. However, this is a very negative mark on your credit report for 7-10 years. You credit score will drop 100-200 points and make it difficult to get a home or car loan during that time.

North Carolina Debt Resources

For those residents struggling to get out from under heavy debt loads, there are plenty of resources to utilize in North Carolina.

• Temporary Assistance for Needy Families (TANF)/ Work First: This program provides parents with training and other services to help them gain employment in order to provide for their families.
• Mortgage Help and Foreclosure Assistance: The North Carolina Housing Finance Agency provides financing through the sale of tax-exempt bonds and management of federal tax credit programs, the federal HOME Program, the state and national Housing Trust Funds and other programs to offer low-cost mortgages and down payment assistance for qualified home buyers.
• Free Prescription Draft: Nonprofit organizations such as NC MedAssist can provide prescription and over-the-counter medications to those in need at significantly reduced cost.
• North Carolina Seniors Assistance: The Aging and Adult Services branch of the NCDHHS works to provide essential services to improve the health, safety and well-being of all North Carolinians.
• Food and Nutrition Services: The state’s food stamps program is put in place to benefit low-income families and provide them with the food they need for a nutritional diet.
• North Carolina Short-Term and Low-Income Housing: The NCDHHS offers several programs to help struggling citizens find and maintain housing. These programs are designed to help people with extremely low income, those struggling with disabilities or ones who have become homeless.
• Job Search and Training Assistance: The Workforce Investment Act is a federal law that uses a one-stop delivery plan for job seekers and employers in North Carolina. Each Workforce Center in North Carolina provides all the employment and training services that a job seeker would need to make the process go smoother.

North Carolina Debt Statistics

According to the Federal Reserve, North Carolina is tied for the 15th highest median household debt-to-income ratio in the nation. This means that residents in North Carolina have some of the most debt in the nation.

Here is a list of some of that debt that the Tar Heel state residents are carrying

• Mortgage debt: The average debt per North Carolina household with mortgages being $188,520.
• Auto loan debt: North Carolinians have an average auto loan debt of $19,944, according to Experian. That is the 20th highest amount of vehicle debt in the country.
• Credit card debt: On average, North Carolinians have $2,155 in credit card debt. That figure puts the state 29th in the nation in terms of the most amount of debt on their credit cards.
• Student loan debt: North Carolinians owed approximately $36,293 in student debt on average in 2022. Some 1.3 million people in North Carolina are still trying to pay off their student loan debts.
• Credit scores: Even with the average score in North Carolina being higher than the nation’s average, North Carolina still has the 13th lowest credit score average with a score of 704.
• Identity theft: The North Carolina Division of Employment Security reported that they are ranked 25th in the nation in identity theft. This means that they are still experiencing over 3,000 data breaches which affect over 1.5 million residents.
• Bankruptcy and foreclosures: According to the American Bankruptcy Institute, North Carolina had 6,577 bankruptcy filings in in 2021. That was a 35% drop from 2020.

Avoiding Debt Relief Scams

Just like the debt itself, getting relief can come in many different forms, including scams. There is a wide array of relief scams in North Carolina, but the biggest giveaway that a company is taking advantage of residents is when they require any kind of upfront fee or fee for debt settlement. Watch out for debt negotiation or debt settlement scams: Under North Carolina law it is illegal to collect any upfront fee for debt settlement services. It also is illegal to go to jail for debt in the North Carolina. Never go to a company or lawyer who offers to eliminate your debt by negotiating with creditors. You should always question companies that charge a high fee or any kind of upfront fee to settle your debt.

Avoid offers that could lead to foreclosure: Creditors may offer to consolidate your debt through a second mortgage or a home equity line of credit. Remember that these loans require you to put up your home as collateral. If you can’t make the payments or if your payments are late, you could lose your home.

Stick to reputable sources to settle your debt: Watch out for unsolicited offers, and always get a second opinion before you sign a loan to refinance your debt. Contact your creditors directly to discuss options for repayment. For additional help, you can find an accredited, nonprofit credit counselor. InCharge Solutions offers options that can fit your personal finance needs, with a 97% customer satisfaction rate. InCharge is also a member of the National Foundation for Credit Counseling (NFCC) and is accredited by the prestigious Council on Accreditation (COA).

Debt Relief and Credit Counseling Options

Now that you know what to avoid you can know what to steer towards.

Credit counseling is a free service that helps you evaluate your finances and identify debt relief programs. InCharge’s certified credit counselors may help you enroll in a debt management program, lowering your interest rates and monthly payment.

InCharge solutions offer a variety of different credit counseling.