One of the most basic tenets of good financial sense is figuring out how to establish a budget and exhibiting the necessary discipline to stick to it.

You don’t want to find yourself spending more than you are earning.

Sadly, that is a tenet that seems to be lost on some citizens in West Virginia. Based on their spending habits, many residents could soon be facing mountains of debts in the very near future.

There are 12 U.S. states where their residents are annually spending more than they are making. Of those 12, West Virginia leads the way in terms of its negative spending-to-earning ratio.

West Virginians are annually spending, $55,295 on average, but they have a median income of just $43,385 a year. Excluding their mortgage debt, West Virginians have 127% of debt compared to their household income levels.

That 127% debt-to-income figure is just ahead of Missouri (126%), New Mexico (119%), Alabama (118%), Arkansas (117%), Maryland (116%), Louisiana (116%), Oklahoma (112%), South Carolina (108%), Tennessee (108%), Maine (107%) and Georgia (107%) among the states where residents are spending more than they are making.

Fortunately for those West Virginians, there are several private and governmental agencies that can help.

Debt Relief Options for West Virginia Residents

A good option for consumers struggling financially is InCharge Debt Solutionsdebt management program. InCharge’s certified credit counselors will consolidate credit card debt, lower interest rates and create an affordable monthly payment plan.

Credit card companies charge consumers an average of 16.3% interest rates in 2021. Consumers struggling to pay those monthly bills can see their interest rates soar to 25% or more by the credit card companies. InCharge works with credit card companies to get those interest rates down around 8%.

InCharge’s goal is to help customers rid themselves of their credit card debt in 3-5 years. However, clients must understand that success often depends on having a budget and strictly following it in order for their credit card debts to be wiped out within the 3-to-5-year timeframe.

InCharge will take your monthly payments and distribute them to credit card companies in amounts that were previously agreed upon. InCharge consumers are able to apply for this hassle-free plan over the phone or online.

Also, there’s this regarding your debt-consolidation plan: Credit score is not a factor in enrolling. Even potential clients with low credit scores can still qualify for debt management plans.

Here are some of the other assistance programs that are available to West Virginians facing financial problems:

  • Debt Settlement This plan can be used for relief from credit card, personal loan and/or medical bill debt. It can be extremely helpful because it allows you to pay less than the amount owed. Creditors will have to agree to a payment amount that settles the amount owed. While this debt-relief option will help solve some of your pressing financial issues in the short term, it will have negative long-term effects on you going forward. The debt settlement will go on your credit report for the next seven years and likely have a negative impact on your ability to get credit.
  • Debt Consolidation Loan If your credit score is solid, you could qualify for a low-interest debt consolidation loan. You will still have to pay off the consolidation loan, but at least you won’t be hit so hard by the credit card companies’ high interest rates.
  • Bankruptcy  This option allows you to rid yourself of your credit card debt, but it should only be used when the other options have been exhausted. Filing for bankruptcy will hurt your credit score for the next 7-10 years. That ding on your credit score likely will hurt your chances of getting a loan to buy a home or vehicle. Before choosing to file for bankruptcy make sure you understand the impact that this option will have on your credit score in the coming years.

West Virginia Debt Resources

West Virginia residents struggling to find work, housing or paying their monthly bills could be eligible for assistance financially through a variety of federal and state programs. Here are some of the services offered to West Virginians in need of shelter, food, child care, bill payment assistance, legal aid and other basic necessities:

  • AccessWV: This state and federal government insurance plan is for West Virginians suffering from pre-existing conditions that result in severe or chronic illnesses or conditions. AccessWV is committed to providing comprehensive and affordable care through several offices and pharmacies in West Virginia.
  • Children With Special Health Care Needs: The CSHCV provides specialized medical care for children who have certain chronic and/or disabling medical conditions. Any child in West Virginia who is under the age of 21 may be eligible for the program if they have medical problems that require specialized care and certain income guidelines are met.
  • West Virginia Golden Mountaineer Discount Card: The Golden Mountaineer Card is for West Virginians who are at least 60 years old. Nearly 400,000 West Virginians are eligible for the program. Cardholders can save hundreds of dollars annually on products and services offered throughout the state.
  • Supplemental Nutrition Assistance Program: SNAP used to be known as the food stamp program and can be used to purchase food items and grocery store items throughout the Mountaineer State. Eligibility is based on household size, income, assets and household expenses.
  • Child Care Resource and Referral Agencies: West Virginia’s Child Care Program is dedicated to improving the affordability, accessibility and the quality of child care services. Financial assistance covers the majority of the child care while the parents work, attend training or otherwise are unable to care for their children. The agency also educates clients on selecting the appropriate child care and refers parents to providers in their particular area.
  • Assistance for Senior Citizens in West Virginia: The West Virginia Bureau of Senior Services has a theme of “Communities of Strength” in 2021 following a very trying 2020 for seniors in the state. Some of the services offered by the WVBSS are: transportation to meals, exercise classes and in-home services. In West Virginia about 27,000 Baby Boomers turn 60 every year. The WVBSS strives to be the premier advocate of in-home and community-based services for the state’s seniors.
  • Foreclosure Counseling and Mortgage Assistance: Sadly, many families are struggling to maintain their mortgage payments in West Virginia. Help is available through the West Virginia Foreclosure Counseling. They can offer risk assessment and solutions to avoid your home being foreclosed.
  • West Virginia Rent and Housing Assistance Vouchers: The Mountaineer Rental Assistance Program is open for West Virginian renters who are struggling to pay their rent or for basic necessities because of hardships brought on by the COVID-19 pandemic. For the most part, the program is for West Virginian citizens who are making 80% of the Area Median Income (AMI). You qualify if one or more of the household members are at risk for homelessness or housing instability because of past-due rent, utility notices or pending evictions.

West Virginia Debt Statistics

Here is a look at some of the debt loads that West Virginians are carrying into 2021 following an extremely difficult 2020.

  • Mortgage Debt: West Virginians had an average of $112,912 in mortgage debt in 2020, up 2.2% from the $110,464 that they owed in 2019, according to Experian. Fortunately for West Virginians, the $112,912 owed in 2020 is the lowest in the nation.
  • Auto loan debt: The news isn’t quite so good as it relates to auto loan debt in The Mountaineer State. The average amount of auto loan debt jumped from $20,332 in 2019 to $21,164 in 2020 among West Virginians. That 4% hike is surprisingly the largest year-over-year jump in the nation. The $21,164 owed in 2020 among West Virginians is now the 10th highest total in the nation.
  • Credit card debt: On average, West Virginians owed roughly $4,686 on their credit cards in 2020. That amount ranks in the bottom third in the nation.
  • Household debt: As stated earlier in this article, the overall numbers are pretty dire in West Virginia in terms of household debt compared to income levels per resident. Citizens in West Virginia owe, on average, $55,300. While that number is relatively low compared to the debt numbers in states not too far away along the East Coast, West Virginians are spending much more on a yearly basis than they are bringing in.
  • Student Loan debt: The average amount owed per student borrower in West Virginia is $31,317. That’s the 13th-highest amount of student debt per borrower in the nation.
  • Credit scores: On average, West Virginians had a credit score of 695 in 2020 — up from the 687 that they averaged in 2019. That 8-point jump tied for the third biggest year-over-year improvement in the nation. Unfortunately, West Virginia will still need a couple more years of significant improvement to reach the nation’s average credit score of 710.
  • Identity theft: Some 1,061 West Virginians were victims of identity theft, or about 59 of every 100,000 residents. That is the fourth-lowest per capita rate in the nation.
  • Bankruptcy and foreclosures: There were 2,224 total bankruptcy filings in West Virginia in 2020 — down 20% from a year prior. That bankruptcy plunge, which was brought on largely by protections put in place by the federal government It ranked as the eighth-largest year-over-year improvement in the nation. As for foreclosures, West Virginia was in line with the national trends and saw significant drop offs from 2019 to 2020. Only 1 in every 88,928 properties were foreclosed upon in 2020.

Sources

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Lembo Stolba, S. (2019, August 12). Top 10 States with the Highest Average Auto Loan Debt. Retrieved from https://www.experian.com/blogs/ask-experian/research/states-with-the-highest-average-auto-loan-debt/#s2

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