Seeking Debt Relief in Virginia?
The Commonwealth of Virginia is known for its diverse landscape, varying from the Blue Ridge Mountains in the western part of the state to the lovely beaches in the southeast. The northern part of the state borders Washington, D.C., the country’s capital and seat of the national government.
While Virginia residents can generally find a place to live that fits their tastes — be it a small college town in the mountains, a city along the beach, or a metropolitan area such as Arlington or Alexandria, VA— the cost of living can vary significantly.
A few of the higher-priced locations include the cities just outside of Washington, D.C., along with the Hampton Roads area, which encompasses a region that includes Virginia Beach, Norfolk, and Chesapeake. These locations, while offering higher salaries, also come with a higher housing price tag.
The state has a median income of $72,600 — the 11th highest in the nation — and a poverty rate of 10.7%. However, while salaries may be competitive, the state is showing signs of an increasing cost of living, leading to the need for Virginia debt relief programs.
For example, home prices in Virginia have increased by 9% in the past year. In fact, just about everything is more expensive. Leasing a car has increased by 24%, while food is up 5.3% and the cost of clothing by 6%. It is no surprise that Virginians facing financial hardship are incurring more debt to cover these steep rises in costs.
How Much Debt Do Virginians Have?
A recent survey found that the average individual in Virginia holds $9,545 in credit card debt — ranking in the top 10 of all states. On average, residents also owe $39,472 in student loan debt. When you only get paid minimum wage, student loan debt can prevent you from moving out of your family home.
Such unsecured debt can add up quickly, resulting in more money spent on paying minimum monthly payments than on other, more productive means — such as saving for retirement. In some cases, a Virginia debt relief program can help.
To see the length of time that it will take to pay off your debt using only monthly minimum payments, as well as how much interest you will pay, use the handy calculator found here.
Credit card delinquency in Virginia
The credit card delinquency rate, defined as when a credit card holder fails to pay the minimum payments for two consecutive months, is 8.66% in Virginia.
When this happens, your creditors can increase the interest rate because the credit card holder is considered high-risk. If more minimum payments are missed, the debt can go to collection and your credit score takes a hit.
Monthly minimum payments can become a debt trap
You might think that by making minimum monthly payments you are keeping up with your credit card debt, but sadly this is not the case.
Banks make money by charging interest rates. Car loans, personal loans, mortgages, and credit cards are charged interest. Credit card interest rates are typically the highest of them all.
When a bank sets a minimum monthly payment, this is basically the interest the bank charges you to lend you money through the credit card. So, when you pay the minimum monthly payment, you are basically financing the bank — not lowering your overall debt. This is why minimum payments can become debt traps.
The minimum monthly payment is set according to the credit card balance. Higher balances come with higher minimum payments.
It can take years for you to repay your consumer debt in full if you only pay the minimum payment. Ultimately, you will have paid immense amounts of money to the bank without ever becoming free of debt.
What Causes Credit Card Debt in Virginia?
While some people use their credit cards for frivolous expenses such as designer clothes they can’t afford, most people in Virginia turn to their credit cards as a source of financing when they are unable to cover their everyday living expenses.
Low income coupled with high inflation
It is common for a household’s income to fail to cover everyday expenses. Rent payments have increased, as have food and petrol. High inflation means that everything is more expensive. If incomes no longer match the increased cost of living, people often use their credit cards to make ends meet.
It is easy to charge your credit card for everyday necessities but when this happens consistently and you only make minimum payments, your unsecured debt balloons. You pay increasing interest rates while your debt level does not decrease a bit and you find yourself trapped in a debt spiral.
Lack of an emergency fund
Emergency funds can help cushion unexpected expenses such as a leaky roof or a car breakdown. People with low incomes or high monthly expenses usually can’t afford an emergency fund because there is not enough money left at the end of the month for such savings.
When an unexpected expense hits your household, it is only normal to turn to your credit card to cover the cost if there is no emergency fund.
At the end of the month, however, you still have to pay back the credit card. If you only pay the minimum payment, the debt may soon spiral out of control and increase every month because of the high-interest rate the bank charges you.
Health expenses
Even the best health insurance has a deductible that you must pay before the insurance kicks in and covers the rest of the cost. Many people charge such deductibles to their credit cards.
Worse, some people are uninsured, which means that all health expenses have to be covered by out-of-pocket money. Serious health issues and medication can cost a lot of money. In the absence of an emergency fund, medical bills are often put on credit cards.
Health costs are a very common cause of credit card debt and typically vary between $1,000 and $10,000.
Debt Relief Solutions in Virginia
Although credit card debt can be stressful, there are several debt relief solutions available to you. Americor debt specialists can discuss your debt relief options in Virginia, help you reduce your debt, and start your life again on better financial terms.
Credit Counseling
For people in Virginia, credit counseling can be the first step toward debt relief.
In many cases, credit counseling services can help you understand your financial situation and assess how you can rearrange your monthly budget to include higher credit card payments. An experienced financial counselor can assess your expenses and income, and then find ways to lower your expenses to leave room for credit card payments.
Moreover, seeking nonprofit credit counseling can help you identify the best debt relief option for your situation.
Debt consolidation loans
A common debt relief solution is a debt consolidation loan. A debt consolidation loan gathers all your credit card debts under one umbrella loan with a lower interest rate.
When you consolidate your debt, it is easier to manage your credit because there is just one monthly loan payment you have to make. Debt consolidation loans also reduce your interest rate, which means you don’t get penalized with the high-interest rates associated with credit cards. Debt consolidation loans can help Virginia residents extend their repayment period to make monthly payments more manageable.
Debt consolidation loans come with terms and conditions and you need a good credit score to qualify for them. You must also make sure that you don’t miss any monthly payments.
Debt settlement
Debt settlement is much easier to arrange with the help of a reputable and trustworthy debt settlement company like Americor. When Americor negotiates a debt settlement with you, it aims at reducing the amount of debt you owe to the bank.
Americor debt specialists will negotiate with your creditors to reduce your overall credit card debt by 25 to 50%.
Keep in mind that debt settlement figures on your credit report and has a negative impact on your credit score. You may have to wait for 12 to 18 months for your credit score to recover.
Contact us if you need assistance with debt settlement and to find out more about how Americor can help you pay off credit card debt.
Debt management
A debt relief specialist can set up a debt management program in negotiation with your bank. They will help you create a Debt Management Plan (DPM) to pay off your credit card debt gradually.
The specialist will work with your bank to reduce interest rates and make your debt more manageable. If you have been missing minimum monthly payments, you were probably charged late fees. A debt management plan waives these and restructures your payments to make them more feasible on your income. The loan repayment period can also be extended. Coupled with lower interest rates, this can make monthly payments even more convenient.
The aim of debt management is to help you become debt-free in a reasonable amount of time—typically 3 to 5 years—without affecting your standard of living or impacting your lifestyle too much.
Bankruptcy
Bankruptcy is a last-resort solution to get free of debt because it involves a lengthy legal process and the help of an attorney. The attorney presents your case to the court, which decides whether your credit card debt can be discharged or reduced to a significant degree. This depends on your level of income, the expenses that were charged to your credit card, and your credit score.
There are downsides you need to consider if you opt for bankruptcy to find debt relief. Most importantly, you may be required to sell part of your assets during the bankruptcy settlement.
Moreover, bankruptcy negatively impacts your credit report, which means it may be harder to obtain loans in the future. Your credit score can start to bounce back within 12 to 18 months but it may take years for it to reach creditworthy levels.
Americor Offers Virginia Debt Help
At Americor, we understand how frustrating debt can be. Most people do not set out to owe creditors lots of money. However, life happens, and sometimes individuals have to take on debt to meet unexpected expenses.
If you find it hard to manage your credit card debt, we have several Virginia debt relief programs that can assist you with getting out of debt quickly. Get started with debt relief with the information provided below:
Our Clients Say...
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Lannie D.
“In 2020, I was drowning in debt. I enrolled in Americor for my 10 creditors for $110,000… and today (three years later) I have cleared my entire balance. It was not an easy process, but Americor guided me through and I am debt free!”
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Matthew E.
“I was down $80k in business debt, and I remember hearing Americor radio advertising. My credit score was down to 570 from 810. I’ve been in the program for over 3 years. It works, just be patient. And my credit score is currently back up to 710!”
