Massachusetts Debt Relief

Massachusetts Credit & Debt Consolidation Information

Massachusetts is one of America’s wealthiest states, but living well comes with a price. The high cost of living makes it easier for people to accumulate debt.

InCharge provides free credit counseling nationwide, and it has years of experience helping Massachusetts residents navigate their state’s turbulent financial waters.

Massachusetts is generally in better shape than most states when it comes to debt, but many of its 6.9 million residents still struggle to make ends meet.

Debt Relief Options for Massachusetts Residents

InCharge is one of the nonprofit debt counseling services in the state. People seeking help can apply online, and their credit scores are not a factor in qualifying for a debt management program. Even if they have bad credit, InCharge and other services can offer a debt-relief option.

InCharge has a debt management program that works with creditors to consolidate your debt, reduce credit card interest rates and create a monthly payment plan that you can afford.

You can apply online or over the phone. If you qualify, InCharge administers the program, taking your payment each month and distributing shares to creditors.

It worked for people like Caroline Colasurdo, who was 33, had two bachelor’s degrees, a steady job and $35k in credit card debt when she found InCharge. Ten years of flying coast-to-coast visiting friends and family, a new wardrobe for a job and a few too many nights out, added up.

She joined the InCharge Debt Management Program and four years later, wiped out the last of that credit card debt. “When I saw the list of interest rates I was paying on my credit cards and what InCharge was able to do as far as reducing them, my jaw hit the floor,” Colasurdo said. “Instead of worrying about debt, I can put my money toward things that increase the quality of my life.”

Massachusetts Debt Resources

While debt consolidation offers a way to ease money issues and avoid bankruptcy, it is just one of the assistance programs available in Massachusetts. State, local and federal governments offer financial aid for crisis situations, help with medical expenses, legal aid and help dealing with debt collectors.  

Health Safety Net Fund — This program provides help for people who are not eligible for health insurance or cannot afford their medical bills and insurance. Residents who qualify get medically necessary health services at hospitals as well as community health centers.

MassHealth — A public health insurance program for Massachusetts residents.

Commonwealth Care — A state-funded health insurance program that covers uninsured low and moderate-income people as well as uninsured residents who don’t qualify for MassHealth.

CenterCare — Provides free healthcare and it will pay medical bills for lower-income residents with chronic illnesses or medical conditions.

Help with mortgage and foreclosure prevention — A mortgage assistance program that help residents refinance a mortgage and prevent mortgage foreclosures. Numerous HUD certified non-profit agencies also provide homeowners with free or low-cost solutions to paying their mortgage or avoiding a foreclosure.

Prescription Advantage — A state-sponsored prescription drug insurance plan for both Massachusetts disabled residents and seniors.

Massachusetts rental voucher program — A rental assistance program that offers tenant-based vouchers to help pay rent for any housing unit that meets the standards of the state sanitary code.

Medical Security Program — A program that helps middle-and lower-income unemployed state residents pay health insurance premiums, medical costs and bills. It will pay up to 80% of a laid-off worker’s monthly health insurance premium for about a year.

Emergency aid to elders, disabled and children — Provides cash grants and other benefits to low-income elders, children, and disabled in Massachusetts. EAEDC aid is for individuals and families who do not qualify for other government cash assistance programs.

Transitional Aid to Families with Dependent Children — A government assistance program that gives benefits and cash assistance to low-income families with dependent children.

The Supplemental Nutrition Assistance Program — SNAP, also known as food stamps, helps low-income households pay for food so that they can have a healthy diet and still have money left over to pay other bills.

DTA Child Care Services — A child care program for families who are looking for a job, working in an approved education or job training program, or disabled.

Income-eligible child care — Subsidized child care for low-income families, disabled, or those in an education or job training programs. The amount a family needs to pay for child care depends on family size and income.

Community Partnerships for Children — The program refers families to childcare programs that may have either scholarship money or offer a sliding scale of assistance. It also places families on the Department of Early Education and Care Wait List for vouchers.

Residential Assistance for Families in Transition — The RAFT program helps families who are behind on their rent, mortgage payments, heating, or utility bills. It also assists families who have to move but do not have enough money to pay some of the costs involved, such as utility startup costs, a security deposit, or first/last month’s rent. Families can get up to $3,000 in financial aid to apply towards rent or expenses.

Prescription Advantage — A program that helps pay for prescription drugs for the disabled and the elderly. There are low-cost premiums, deductibles and co-payments based on household income.

Energy and gas company programs — Most Massachusetts utility companies offer low-income assistance programs, in particular for paying heating bills.

Eviction prevention and homeless programs — Emergency rental assistance as well as rehousing is offered from government programs such as ESG or Continuum of Care. Resources include transitional housing, funds to pay security deposits, and free legal aid to those facing eviction.

Massachusetts senior programs — Elderly and residents over 55 years of age can receive help and advice from the Agency on Aging. Resources available include information on health insurance, free food, home delivered meals and job training.

Emergency Aid to Elders, Disabled and Children — Provides cash grants and other benefits to low-income elders, children, and disabled in Massachusetts. EAEDC aid is for individuals and families who do not qualify for other government run cash assistance programs.

Transitional Aid to Families with Dependent Children — A government assistance program that gives benefits and cash assistance to low-income families with dependent children.

Massachusetts Debt Statistics

Basically, it’s good to live in Massachusetts. And it’s bad to live in Massachusetts.

The good is that that the median household income is $77,385, according the U.S. Census Bureau. That ranks No. 4 in America, trailing only Hawaii, New Jersey and Maryland.

The bad is that Massachusetts residents need every penny they can get. Various studies rank it among the most expensive states to live in. It was No. 3 in a CNBC analysis of prices for housing, food, energy bills and health costs, trailing only California and Hawaii. A report by the Bureau of Economic Analysis ranked Massachusetts No. 7 on the list of most expensive states.

For proof, look no further than the Greater Boston area, which two-thirds of the state’s residents call home. The average home price in Boston is $604,205, which is 70% higher than the national average. The median house price statewide is $439,000, the fourth-highest in the U.S., and the median rent is $2,600 a month.

On the bright side, the least expensive ticket to most Boston Red Sox games is $21. That is still $9 less than what their hated rivals, the New York Yankees, charge for their cheapest ticket. Just be sure to eat at home before you head to Fenway Park.

A 12-inch thin crust pizza costs about $11 in Boston, which is about double what it costs in Hanover, Pa. Of course, Hanover is in rural Pennsylvania and has no post-high school educational institutions, unless you count the Empire Beauty School.

Massachusetts has Harvard, MIT and is the best-educated state in America. Almost 44% of residents have at least a bachelor’s degree. The problem is that diplomas aren’t cheap. The average student loan debt for graduates of Massachusetts’ public four-year colleges rose 77% between 2004-2016, according to the Massachusetts Budget and Policy Center. That was the highest of every state except Delaware.

Economic Signs in Massachusetts

A college degree usually translates into better-paying careers, and Massachusetts’ poverty rate of 10.5% is the 10^th-lowest among the 50 states. The unemployment rate was 3.8% in February 2019, the 34^th straight month below 4.0%. The rate of job growth is slowing, however.

Massachusetts added 53,200 jobs from February 2017 to February 2018, but that dropped to 20,300 from February 2018 to February 2019. And the state’s economy grew at an annualized rate of only 2.1% in the last three months of 2018.

Economists predict it might drop to 0.5% as the labor market tightens and the population ages. A study by Kiplinger ranked Massachusetts the second-worst state to retire in due to its high cost of living and high taxes. It estimated healthcare alone would cost the average couple $450,000 in retirement.

Many state residents are more concerned about day-to-day expenses than what they’ll be paying in retirement. The average household that doesn’t pay off its credit cards monthly carried a balance of $6,277 in 2018, according to the Survey of Consumer Finances by the U.S. Federal Reserve. With the average interest rate on credit cards hovering around 17%, that much debt can take a chunk out a household’s monthly budget and lead to spiraling debt.

So unless your last name is Kennedy, you’d better have a budget and stick to it if you live in Massachusetts.

The Bottom Line

Massachusetts has a wide social safety net for people in financial distress. The academic and business community will keep the state ahead of most others when it comes to wages, poverty and unemployment.

But high taxes and exorbitant housing, food, utility, healthcare expenses make it easier to accumulate debt, even for Massachusetts residents who earn a decent paycheck.

When they need help, services like InCharge can be much more valuable than even front-row seats at a Red Sox game.