Debt Consolidation: Miami Residents Have Options Available
The Sunshine State is typically—and broadly—characterized as the land of retirement communities and slow-moving vehicles, but in the far southern city of Miami, life moves with the pace of the best American cities.
‘Magic City’ continues to gain steam as a popular destination for sensational cuisine, killer shopping, all things fun in the sun and vibrant culture. In fact, international travelers visit the ‘Capital of Latin America’ more than every U.S. city except for NYC. Miami is the sixth-most densely populated city in the U.S. and the seventh-largest metro region. It also has the third-tallest skyline behind New York City and Chicago with over 300 high rises.
Despite Miami’s 115.3 cost of living index (U.S. average is 100), transplants are still flocking. As of 2017, the city had a population of 463,347 — a 16% increase from 2010.
What’s more, Miami’s median household income was just $34,901 in 2016, nearly $15,000 lower than the state median. Add crippling credit card debt with a high cost of living and things can spiral out of control quickly.
Debt-Assistance Strategies to Consider
There is a variety of debt solutions available to those burdened by massive debt. There’s no one-size-fits-all solution, but there are options that might fit your debt situation better than others. Here’s an overview of what may be available to you in Miami.
Miamians trying to solve their debt should take solace in the fact that proven strategies exist. Let’s discuss some common Miami debt consolidation and relief tactics below.
If your credit score is still in decent standing, a personal loan can inject fresh life into your financial situation. Explore personal loan options from institutions you’re not currently engaged in business with as other new lenders may give you better terms on a loan offer. A good credit score might net you interest rates under six percent, but even interest rates as high as 10-13 percent are likely lower than the rates you’re currently paying.
Another Miami debt consolidation strategy is to transfer your balances to a new credit card. Balance transfer cards offer an introductory (zero- or low-interest) period typically lasting anywhere from six-to-18 months. Transferring several debts into one balance simplifies your monthly payment and lets you chip away at your principal balance during the introductory period. Keep in mind that balance transfer cost a three-to-five percent fee, so make sure transferring balances makes financial sense for your situation.
Cash-Out Refi or Home Equity Loan
Miami’s median home value as of 2016 was $277,700, up from $116,400 in 2000, and roughly $80,000 higher than Florida’s current median home value of $197,700. This is good news for Miamians who have a fair amount of equity in their home.
Cash-out refinance plans allow debtors to free up enough cash to pay off their high-interest credit balances in exchange for a larger mortgage with a new interest rates, loan length and repayment schedule.
Debtors can also leverage a home equity loan, meaning they’ll take out a second mortgage on their home at a fixed rate for as long as 30 years. The biggest difference between the plans is that a cash-out refi carries closing costs and fees.
When debt consolidation strategies can’t save a debtor’s situation, debt forgiveness becomes a viable alternative. Debtors can pursue debt forgiveness plans by declaring chapter 7 or chapter 13 bankruptcy — or by seeking debt settlement via providers like Freedom Debt Relief.
These options all carry the potential to reduce a debtor’s balance, but they’re not without caveats. For example, chapter 7 bankruptcy can completely absolve debt, and in as little as three months. However, it’ll also result in the liquidation of personal assets to pay back the debt.
Chapter 13 bankruptcy protects your personal assets but requires court-ordered payments to be made for three-to-five years. Of the two, chapter 7 will stay on a credit report longer (10 versus 7 years). Either route will incur attorney costs, court fees, and mandatory financial management courses.
Debt settlement, which involves a company working with your creditors to lower the balance owed, also negatively affects credit scores. While the process takes anywhere from two-to-four years, it benefits many debtors in the emotional release of allowing a third-party to take the reins of a tumultuous situation. If a debt settlement service is successful, you’ll be charged a percentage fee based on the amount resolved if you agree to pay it. Like chapter 13, debt settlement doesn’t jeopardize your assets. More importantly for some people, debt settlement doesn’t require going to court and could significantly reduce what they owe.
Consolidating Debt in Miami
Miami isn’t going anywhere as a worldwide hub of tourism, culture, cuisine and nightlife. All four major professional U.S. sports, the number-one cruise passenger port in the world and one of the most unique national parks in the country in the Everglades are all in Miami’s grasp.
Even an ordinary day spent getting a Cubano sandwich in Little Havana, eating a fresh catch of grouper or sipping on a perfectly blended cortado makes it clear that Miami is plenty attractive for both tourists and locals alike.
But dealing with high-interest debt can put a dark filter on even the sunniest places. Freedom Debt Relief has helped thousands of debtors leave their mistakes behind and get on a track toward financial wellness.