Texas Resident Debt Relief Programs and Financial Assistance

InCharge assists Texans experiencing problems paying their bills or struggling financially with free, nonprofit debt management programs and credit counseling. If you need assistance in eliminating credit card bills, InCharge is here to help.

Choose Your Debt Amount

Everything is bigger in Texas, and that includes the amount of debt Texans rack up.

Texans owe the second-most in the nation on their auto loans and the eighth-most on their credit cards. Their average annual expenditures are more than 100% of their earnings.

In a nutshell, that means the average Texan spends every dime he or she makes, and debt is a big part of that spending. Total debt per capita in Texas: $49,720.

Better days could be coming, though, a product of the recovery from the pandemic, as shown in economic numbers.

According to the Federal Reserve of Dallas, the economy in Texas expanded in the first few months of 2022. Job gains grew at a pace slightly faster than the national average, payroll employment reached new highs in April ’22 and the unemployment rate fell to 4.3%.

The steady job numbers and improving economic indicators could lead to economic growth in Texas, which is very much needed to help Texans dig out of the sometimes staggering amounts of debt they piled up.

Debt Relief Options for Texas Residents

Several programs exist to help those burdened by debt, including those offered with help from a nonprofit credit counselor.

Debt Management Program

A debt management program from an entity like InCharge Debt Solutions can reduce the interest rate on credit card debt to around 8% and allow you to pay off all the debt in 3-5 years.

If you fall behind on payments for credit card debt, card companies typically jack up the interest rate to 25% or even higher.

If you owe $5,000 on credit cards and reduce the interest rate from 25% to 8%, the interest payment drops from $105 a month to $33. That $72 savings matters, and is the main reason for choosing debt management. The savings could even could be applied to your balance so you pay the debt faster.

With debt management, you must make payments in full and on time or you will be dropped from the program and lose the concessions on interest rate. The program is not a loan, but it is a sound way to eliminate debt.

Debt Consolidation Loan

A debt consolidation loan is another form of debt relief. In this approach, you combine all your credit cards into one debt, borrow enough money to pay off the combined debt, then repay the one loan, rather than making separate payments to each credit card.

For example, if you have four credit cards and owe a total of $7,000, you borrow that amount and pay off credit cards. You now owe one lender $7,000 and make one payment, presumably at a lower interest rate than what you paid on your credit cards.

Getting a low interest rate on a debt consolidation loan requires a good credit score. It’s also advisable to stop using credit cards. If you aren’t disciplined and you start charging things again, you’re adding to the debt you have to repay.

Debt Settlement

Debt settlement is third debt-relief option. It is a negotiated agreement with a creditor to pay less than you owe. The lender chooses whether to agree to this plan, even if it means accepting less than what is owed. However, the process Is long and arduous and the savings are seldom as high as promised. Debt settlement can negatively affect your credit score by 100-200 points.


Bankruptcy is a last resort, but for some a necessary choice. Bankruptcy means declaring in court that you cannot pay your debt. In Chapter 7 bankruptcy, you agree to pay what you can by selling assets considered non-exempt. In Chapter 13 bankruptcy, you work out a court-approved payment plan over a 3-5 year period. Bankruptcy will hurt your credit score, and will stay on your credit report for 7-10  years, which will affect your ability to buy a home or borrow money in that time.

Credit Card Debt Forgiveness

Another debt-relief option is a credit card debt forgiveness program. This is an agreement worked out with the help of a credit counselor from one of the few nonprofit credit counseling agencies that currently offer the plan. The program was developed by the National Foundation for Credit Counseling (NFCC). It is exactly what it implies: A portion of your credit card debt (usually 40%-50%) is forgiven in exchange for the consumer agreeing to three years of consistent payments on the remaining portion. Consider it a clever mix of debt management, debt settlement and debt consolidation. The good news is that there is no interest charged on the settled amount. However, every monthly payment must be made on time and there can be no extension beyond the 36 months.

Home Equity Loan

A home equity loan, which used to be called a second mortgage, means borrowing on the equity in your home, then using the borrowed money to pay your debts. The home equity loan usually is at a substantially less interest rate than what is paid for your credit cards.  The catch: You could lose your home if you can’t make the monthly payments.

Balance Transfer Credit Card

You can also eliminate debt by taking advantage of balance transfer credit cards. In this approach, you transfer your credit card debt to a new card that offer 0% interest, usually for 12-18 months. Pay attention to the fine print. There is a “transfer fee” of 3%-5% of the balance. Some cards say if you miss one payment, all the interest will accelerate back and you’ll see no savings. Also, be disciplined and use the offer to eliminate debt before the introductory period expires.

Texas Debt and Financial Hardship Resources

Texans with financial challenges might qualify for financial assistance through a variety of federal and/or state programs. Here are a few place Texans may seek help:

  • Temporary Assistance for Needy Families: The TANF program provides cash payments to help families buy clothing, food, shelter and other essential items. The program is designed for families with children 18 or younger.
  • Supplemental Nutrition Assistance Program: The SNAP program, formerly known as the Food Stamp Program, provides financial assistance to eligible Texans with low or no income to purchase food. In Texas, funds are put onto the Lone Star Card and can be used just like a credit card at any store that accepts SNAP. This program cannot be used to purchase tobacco products, alcoholic beverages, items that can’t be eaten or drank, or to pay bills.
  • Women, Infants and Children Program: The WIC program is a nutrition and health plan designed to improve the diets of infants and children as well as pregnant, postpartum and breastfeeding women.
  • Texas Health and Human Services: Following a disaster, the HHS Commission will organize efforts to get information and relief to Texans in need of assistance. You should always call 9-1-1 for life-threatening, emergency situations that come as a result of disasters. However, you can call 2-1-1 to get answers to questions about assistance from SNAP, TANF and Medicare.
  • Former Foster Care Children: Children in Texas’ foster care programs are eligible for Medicaid through the STAR Health program. Some of the services that are provided are regular doctor visits for checkups, dental visits, and prescriptions for medicine and vaccines. Adoption Assistance and Permanency Care Assistance helps families with children transitioning from foster care with expenses related to adoption and health-care coverage.
  • Medicare Savings Programs: If you’re eligible for Medicare, the Texas’ Health Information, Counseling and Advocacy Program can help you enroll, find information and provide counseling about your options.
  • Shelters and Services for Homeless Texans: All throughout Texas, there are a variety of shelters for residents who have found themselves without a safe place to stay. Day shelters supplement homeless and low-income when the shelter they are staying in is only available on an overnight basis. Emergency Homeless Shelters provide short-term relief for the homeless — usually with a maximum stay of three months of less. Halfway Housing helps transition individuals and families from shelters to permanent housing. Permanent affordable housing allows impoverished citizens to pay no more than 30% of their income toward rent. Other options include shared housing, boarding housing, supportive housing and transitional housing.
  • Transportation for the Elderly: If you don’t have a vehicle or you no longer drive, you can get rides to and from your doctor visits through Texas’ transportation services. If you are older than 60, call your local agency on aging to secure transportation to and from your appointments. Those services can also be secured through the Medical Transportation Program.
  • Mortgage and Foreclosure Aid. Texas has several programs that can help you avoid foreclosure. One is the National Foreclosure Mitigation Counseling (NFMC) Program, which partners with local Texas organizations to provide counseling and to work out payment plans.
  • One-Time TANF. A $1,000 payment can help families in a short-term crisis due to a lost job or medical situation. The emphasis here is on one-time.
  • The Comprehensive Energy Assistance Program (CEAP) helps low income households meet their utility bills. It also helps in times of severe weather or supply shortages.
  • Texas Health is a faith-based, nonprofit and private health care system that maintains care for those in difficult financial straits. Generally, you qualify if your income is less than or equal to 200% of the poverty line.
  • Local rental assistance programs. Just about every county in Texas has a local program to help those who need help paying the rent or avoiding eviction. The link to your county can be found here.
  • The Community Action Agency (CAA) Network. This federally funded program mandates that 90% of the funds go to community groups. The goal is to ensure money goes to localities, which then ensure those in need received the funds.

Texas Debt Statistics

Here is a glimpse at some of the debt issues that Texans have on their books in 2022.

  • Auto loan debt: Texans enjoy borrowing money to drive. The state leads the nation in auto loan debt per capita with an average of $7,270 per person. With 28.64 million people in Texas, that means auto loan debt totals $208 billion.
  • Credit card debt: Texans are not afraid to pull the plastic card out of their wallet. They have, on average, $6,999 in credit card debt — the eighth highest amount in the country. That total is well above the national average of $6,569.
  • Mortgage Debt: The average mortgage balance among Texans was $186,696 in 2020. That number will increase, because Texas’ average cost of a home rose from just over $200,000 in 2020 to $349,000 in April of 2022. The average payment in the spring of ‘22 is $1,675, which is $66 higher than the national average.
  • Student Loan debt: Collectively, Texas ranks second in the nation with $120 billion in student loan debt. On average, Texans owe $32,920. Some 3.645 million people in Texas are saddled with student loan debt.
  • Household debt: Texans have a 1.45-to-1 debt-to-income ratio, meaning Texans on average owe $1.45 for every dollar of income.
  • Bankruptcy: The American Bankruptcy Institute reports 19,308 personal bankruptcy filings in Texas in 2021, with 63% of those Chapter 7 filings. That is the seventh highest number in the country.
  • Credit scores: Texas has the fourth lowest average credit score — 692. Texas ranks ahead of only Mississippi, Louisiana and Alabama in average credit score.
  • Identity theft: Of every 100,000 people in Texas, some 504 of them fell victim to identity theft, the 11th highest mark in the country. Since the start of the COVID-19 pandemic, Texas saw a 63% increase in identity theft reports.

Avoid Debt Relief Scams

Texans should be prudent and smart when pondering debt relief, and keep in mind that there are those who will prey on you when you are in a difficult position.

The Texas Attorney General’s office points out the two most obvious signs of a debt relief scam:

  • Someone contacts you with offers to settle your debt. Any unsolicited call offering help with debt has a good chance of being a scam.
  • They ask for fees up front. Anyone who makes you pay first, before helping with your debt, likely is a scammer.

The Texas AG recommends filing a complaint if either of the above happen.

The Attorney General also recommends credit counseling to help with debt issues. InCharge Debt Services has licensed credit counselors who are obligated by law to act in a client’s best interests.

InCharge’s counselors are certified every two years by the (NFCC). This counseling provides an unbiased look at a person’s finances, and helps them determine solutions.

Seek Professional Debt Relief Help in Texas

A discussion with a credit counselor at InCharge Debt Solutions can lead to a plan that will help you pay off your debt. Credit counseling can be a first step toward financial stability.

Credit counseling is a free service that provides help with budgeting and solutions for eliminating debt. The InCharge counselor will assess income and debts, and find the best path forward.

InCharge has to give the best financial advice. It is required by law, and in the interests of InCharge and its counselors to do the best it can for anyone seeking help.

A study by researchers at The Ohio State University reported that those who receive credit counseling reduced credit card debt by an average of nearly $6,000 in the first 18 months.

About The Author

Pat McManamon

Pat McManamon has been a journalist for more than 25 years. His experience has mainly been in sports, but the world of athletics requires knowledge of business and economics. He also can balance a checkbook and keep track of investments with Quicken quite adeptly. McManamon’s experience includes covering the NFL for ESPN, LeBron James for the Akron Beacon Journal and AOL Fanhouse, and the Florida Gators and Miami Hurricanes for the Palm Beach Post.


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