Debt Consolidation Options for Springfield Massachusetts Residents

BY Thilini WijesinheApril 23, 2023

If you’re a Springfield resident with increasing debt, you’re not alone, and you can get help. 

Springfield, Massachusetts, with a population of 155,929, has a median household income of $43,308, according to 2017–2021 data (in 2021 dollars). That's less than half of Massachusetts' $89,026 median household income and about 37% lower than the nationwide median of $69,021. The per capita income for the same period was $23,161 in Springfield (in 2021 dollars), well below the $48,617 in Massachusetts and the national average of $37,638. 

The cost of living in Springfield isn't similarly low, unfortunately. The median gross rent in Springfield during 2017–2021 was $964, only 17% below the national average of $1,163. An estimated 26.3% of Springfield residents live in poverty, compared to 11.9% in the U.S. 

Getting into debt is easy when your cost of living increases, you’re unemployed, or your income isn't enough to pay bills. And using credit cards is convenient for many people. The average credit card balance in Massachusetts increased 15.5% year-over-year to $6,046 in 2022, above the national average of $5,910, according to Experian. 

Springfield Residents and Debt

People considering debt relief in Massachusetts had an average credit card utilization rate of 75%, according to Freedom Debt Relief’s data from June 2022, significantly higher than the national average credit card utilization rate of 28% in 2022, as reported by Experian. 

Paying down credit cards can help your credit score. In contrast, a high credit utilization ratio could mean a higher risk of defaulting on debt and needing debt relief. 

You might be taking on too much debt if you: 

  • Use credit cards to cover shortfalls every month. 

  • Borrow to pay for unexpected expenses.

  • Make late debt repayments.

  • Only pay the minimum on credit cards.

  • Find your debt and interest costs increasing.

  • Need help paying down your debt. 

  • Get calls from lenders or collection agencies. 

If these sound familiar, remember you have options to manage your debt. First, get a full picture of your financial situation. Consider the number of loans and credit cards you have, their outstanding balances, interest rates, and your finances.

There’s no ideal solution that works for everyone. Select a method that works for you and stay the course. 

If you can manage to keep track of and repay multiple debts, two popular payoff strategies are the debt snowball and the debt avalanche

Debt snowball: Pay your debt from the smallest outstanding to the largest. 

Debt avalanche: repay your most expensive debt first and move towards the cheapest. 

Debt consolidation loans

If you qualify for a loan, you might be able to simplify your finances and possibly save on the cost of your debt by getting a debt consolidation loan. A debt consolidation loan is one loan that you use to pay off multiple smaller debts. This might work if you have a few high-cost debts with a total balance of over $10,000. Tracking and paying off one loan is easier than multiple loans and credit cards. You might save money if the interest rate on your new loan is cheaper.  

You could get a secured or unsecured loan to consolidate debt, depending on your situation.

Secured loan: the lender uses an asset as collateral against the loan. If you stop paying the loan, you could lose your asset. Since lenders take a lower risk, they may offer you a cheaper interest rate than unsecured debt. You might also qualify for a secured loan in Springfield with a lower credit score. 

Secured loans include car loans and home equity loans. A home equity loan is a loan against the difference between your home's value and any mortgage balance.  

Unsecured loan: loans not secured against an asset. These include unsecured personal loans and credit cards, and they generally have a higher interest rate than secured loans because lenders take a bigger risk. 

You’ll likely need a FICO score of around 600 or higher to get an unsecured loan. It might not be an option if you have financial difficulty and a lower credit score. 

Credit card balance transfer 

You can find a balance transfer offer with a 0% annual percentage rate for 12–18 months to consolidate your credit card debt. But balance transfer offers usually come with a fee. 

This might be a good option if you can pay down most or all of your debt during the interest-free period. If you don't make repayments on time, the credit card company might cancel the promotional offer.  

Statute of limitations

The statute of limitations limits how long you can be sued for unpaid debt. In Massachusetts, the statute of limitations for consumer debt is six years, which applies to written and verbal agreements. 

You might still be liable for the debt after the statute of limitations period. This is because rules differ between states and the type of debt and credit agreements. For instance, the start date of the statute of limitations might be the day you missed a payment or the day of your last repayment. And any repayments you make might reset your clock. Certain types of debt don’t have statutes of limitations. 

Another thing to remember is that defaulted debt can impact your credit history, even after the statute of limitations is over. Negative information generally shows up on your credit report for seven years. 

For many people, it may make sense to pay off the debt. If you’re facing severe financial problems, you can consider debt relief. 

Debt relief 

Debt relief or debt settlement is when you negotiate with your lenders to pay less than your outstanding balance. Lenders are more likely to negotiate if they believe you can't pay. This might be an option if you’ve missed several payments and can’t get caught up. 

It’s important to understand the costs and benefits of debt relief. To learn more about debt relief options for Springfield residents, call Freedom Debt Relief at 800-910-0065 for a free consultation. Our certified debt consultants can review your debt situation and circumstances and help you select a good option. 

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