Iowa Resident Debt Relief

Iowa Credit & Debt Consolidation Information

Iowans have the reputation for being the tough and hard-working types able to weather any sort of storm that hits them.

However, few Iowans likely could have ever envisioned the crippling wallop that would hit the state in the spring of 2020 when the COVID-19 pandemic nearly brought the country to a standstill.

The state’s near-record unemployment numbers of early 2020 were flipped upside down and approximately 188,000 Iowans were without work in April. Iowa counties, such Winnebago (17.2% unemployment), Des Moines (14.8%), Scott (13.5%), Lee (13.2%) and Dubuque (12%), were hit especially hard by the fallout of a pandemic.

Now, Iowa and much of the nation will be spending much of the next year trying to dig out from unemployment levels not seen since the Great Depression and historic losses in state and local tax revenues.

COVID-19’s impact on Iowa’s expansive agriculture industry is expected to be approximately $6 billion.

Undoubtedly, tens of thousands of Iowans are still dealing with the aftereffects of a horrid year. The shutdown of jobs and the economy has left them reeling financially and in search of answers. The debts and bills racked up during the past year are coming due and citizens across the state are in need of solutions to their financial dilemmas.

Fortunately, there are private and governmental agencies that can help Iowa residents still in financial peril from an otherwise awful and forgettable 2020.

Debt Relief Options for Iowa Residents

One option for consumers struggling financially is InCharge Debt Solutions and its debt management program. InCharge’s certified credit counselors work with creditors to consolidate the amount of debt from credit cards, lower your interest rates and come up with affordable payments that work best for your individual financial situation.

On average in 2020, the credit card companies billed customers interest rates of 16%. Those having trouble paying off their cards, often see interest rates raised to 25% or more.

InCharge has working agreements with credit card companies to get those interest rates down to approximately 8%.

The goal for InCharge is to help customers eliminate their credit card debts in 3-5 years. However, know this going in: It is suggested that customers use a detailed spending budget — and strictly follow that budget — so that their credit card debts can be eliminated in the 3-5 year timeframe.

InCharge manages the plan by taking your monthly payment and distributing it to creditors in amounts previously agreed upon.

You can apply for a debt management plan over the phone or online.

Want more good news about the consolidation plan? Your credit score is not a factor in enrolling. Even consumers with a low credit score could still qualify for a debt management plan.

Here are some of the other assistance programs that are available to people in Iowa facing stressful financial crises:

• Debt Consolidation Loan – If you have a solid credit score, you could be eligible to receive a low-interest debt consolidation loan. You still must pay off the consolidation loan, but at least you won’t be hit so harshly with the high interest rates that the credit card companies charge.
• Debt Settlement – This debt-relief plan is one that you pay less than the amount owed to settle the outstanding debt. Creditors have to agree to a lump-sum payment that settles the debt. While this is sometimes the best option to help consumers rid themselves of the crippling debt, it also can be potentially troublesome. The debt-settlement plan goes on your credit report for the next seven years and will have a negative effect on your ability to use credit for major purchases.
• Bankruptcy – This option could allow you to wipe out the debt you have built up on your credit cards, but it should only be used when all other options have been exhausted. Bankruptcy might benefit you in the short term, but the long-term effect is the negative impact that it will have on your credit score for the next 7-10 years. The hit to your credit score likely will hamper your chances of getting a loan for a home or a new vehicle. Before choosing the bankruptcy option, be sure to examine its impact on future credit.
• Do-It-Yourself Plans – If you are the adventurous type and prefer a do-it-yourself option, you should consider a DIY-style debt management program that most closely matches up to your personal finance needs.

Iowa Debt Resources

Iowa residents who are struggling to pay their monthly bills can get help through a variety of state and federal assistance programs. Here are some of the services that are offered to Iowans in need of food, shelter, legal aid, child care and other necessities:

• Mortgages Assistance Programs: The Making Home Affordable Program can help homeowners lower their monthly mortgage payments and acquire more affordable loans with low interest rates. The plan also helps struggling homeowners avoid foreclosure.
• Healthy and Well Kids in Iowa (Hawk-i): This plan, which is federally known as the Children’s Health Insurance Program (CHIP), provides medical coverage to children and families who have incomes too high for Medicaid, but are unable to pay for private coverage. Some of the services covered by CHIP are routine checkups, immunizations, doctor visits, prescriptions and dental and vision care.
• Food assistance (SNAP): The Supplemental Nutrition Assistance Program, which was formerly known as the Food Stamp Program, works to try and improve the nutrition among low-income families and individuals. SNAP works to try and fight the hunger problems throughout Iowa and it is a resource for individuals making the transition from welfare to work.
• Child Care Assistance (CCA): Iowa’s Child Care Assistance program is available to children who have income-eligible parents working throughout the day or participating in academic or vocational training. Also, child care can be provided on a temporary basis as parents go out in the community in search of work. Parents can apply for these services online at the CCA family portal.
• Free Legal Advice: The Basic Needs and Support program, a service for Iowans with low income, provides free legal aid and representation on civil matters. Because the state’s legal aid offices are still working remotely, Iowans interested in this program must apply online or over the phone.
• Homeless Prevention and Emergency Shelter: Shelter House is an overnight emergency facility that operates a 70-bed shelter and it is open to men, women and families with children in homeless situations. Shelter House also offers breakfast and dinner meals during their stay and packed lunches will be available to those residents who are employed. Shelter House also has a low-barrier Winter Emergency Shelter, which is open from December through March. Barriers such as sobriety, participation in various programs and other usually required conditions are removed in an attempt to shelter homeless Iowans from the winter weather.
• Iowa Medication Voucher Program: The Iowa Department of Health’s SafeNetRx Program was started in 2007 and has emerged as the largest prescription and over-the-counter drug program in the nation. With this plan, needy and low-income Iowans receive medicines and medical supplies for free or reduce costs. The medicines are prescribed by a pharmacist and distributed to impoverished Iowans who meet certain income requirements.
• Dental Services, Check Ups and Care: The Dental Lifeline Network of Iowa runs the Donated Dental Services program, which provides free dental treatment to eligible Iowans who are elderly or mentally fragile. The program is also for those Iowa citizens who can’t get necessary treatment and aren’t eligible for public aid.
• Weatherization Assistance Program: This program, known in Iowa as WAP, is in place to help to improve the energy efficiency of homes belonging to low-income individuals or families. Preference in Iowa may be given to people older than 60 years old, families caring for one or more individuals with a disability or families with children. You are automatically eligible to receive weatherization assistance if you receive Supplemental Security Income or are already a part of the Temporary Assistance to Needy Families plan.

Iowa Debt Statistics

According to the Federal Reserve’s state statistics, Iowa has had a decade-long run as one of the nation’s top 15 states in terms of debt-to-income ratio. That impressive run means that the best-prepared Iowans were able to weather the tough economic times brought on by the 2009 recession and 2020’s COVID-19 pandemic. However, there are still plenty of everyday, hard-working Iowans who are finding it difficult to stay afloat financially in these difficult times.

Here is a look at some of the large amounts of debt that Iowans are carrying into 2021 following an extremely difficult year when so many lost their jobs and their livelihoods because of the pandemic.

• Mortgage Debt: According to data compiled by The New York Fed, Iowa’s average debt per household with a mortgage was $122,599 in 2020. The Hawkeye State has the eighth lowest amount of mortgage debt in the U.S. Meanwhile, Experian says that mortgage debt did increase some 2.8% from 2019 to 2020. In terms of the median household income among families with a mortgage, Iowa is 30th at $88,085, according to The Fed’s data. Those income levels were undoubtedly affected by Iowa’s 11% and 10.2% unemployment rates in April and May when the negative effects of the pandemic were at their zenith.
• Auto loan debt: Iowans clearly love their expensive pickup trucks and luxury SUVs, but for the most part have shown great restraint when it comes to piling up auto loan debt. Experian’s data shows that Iowa ranked 30th in the nation in the average amount of auto loan debt ($18,868). However, that figure did climb 2% over the previous year.
• Credit card debt: Iowa continues to lead the nation when it comes to avoiding credit card debt and being stuck paying those high interest rates that the companies typically charge. Iowa was first in the country in the smallest amount of average credit card debt in 2020 at $4,289. And because families tended to travel and shop less during the pandemic, credit card debt rates actually dropped nationally over the past year. Iowa’s nation-leading credit card debt amount was $5,155 in 2019 and fell even lower in 2020.
• Household debt: Iowans have, on average, $43,300 in debt, excluding their home mortgages. That’s the lowest amount of household debt in the nation, according to data compiled by PeerFinance101.com. In another statistic that indicates just how willing Americans are to go deep into debt, Iowans have a 77% debt-over-household-income ratio. That percentage ranks tied for ninth in terms of the lowest amount of debt compared to the income individuals bring in on a yearly basis. Michigan citizens lead the way with a debt-to-income ratio of 65%. With some states, such as West Virginia (127%), Missouri (126%) and New Mexico (119%), sadly their residents have more debt than they do income on an annual basis.
• Student Loan debt: Approximately 427,900 Iowa borrowers owe a collective $13 billion in student-loan debt. That amount averages out to $30,381 of student loan debts for the borrowers in Iowa. The Hawkeye State has the 16th highest amount of student debt in the nation.
• Credit scores: The average credit score among Iowans rose from 720 to 726 from 2019 to 2020, putting the state in a tie for the 12th highest credit score in the nation with Montana, according to CNBC. More good news: Iowa’s average credit score is much higher than the national average of 710.
• Identity theft: Population sizes naturally play a major role in identity theft statistics for states. In 2019, 1,910 Iowans were victims of identity theft, according to the most recent data compiled. When broken down on a per capita basis to account for population sizes, Iowa ranked sixth in the nation in terms of the fewest instances of identity theft. Roughly 44 people in every 100,000 Iowa citizens were victims of identity theft in 2019. To put that into perspective, 427 out of every 100,000 people in Georgia were victims of identity theft — the highest number in the nation per capita.
• Bankruptcy and foreclosures: Bankruptcy filings in Iowa were at 3,712 in 2020 — down 23% from the 4,802 filings in 2019. That much-needed plunge, one that was brought on by government protections to try and stabilize the housing market in tough times, represented the 15th-largest reduction in the nation for bankruptcies in 2020. Similarly, the rate of foreclosures in Iowa declined even though the government’s protection orders expired in May of 2020. With those protections having disappeared, Iowa’s foreclosure rate for January of 2021 was a troubling 1 in every 12,178 properties — a higher rate than the national ratio (1 in every 13,955 properties) in January of 2021.