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DebtHammer's free guide to debt relief details several options for Massachusetts residents, including hardship programs, consolidation and other financial resources.

Debt Relief in Massachusetts

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An estimated 7,174,604 people live in Massachusetts, making it the 15th most populous state in the country. The average annual mean wage is $72,940, but many residents face major financial problems.

Approximately 9.4% of Massachusetts residents live in poverty (the eighth highest in the country). Along with this, the average debt per capita is a rather hefty $69,930.

For those who need debt relief in Massachusetts, there are many resources and programs available to help.

Are you eligible for debt relief?

If you’re a Massachusetts resident, DebtHammer may be able to help.

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Massachusetts debt statistics

Check out these recent Massachusetts debt statistics to get an idea of what people in the state are facing:

  • Average household debt: $69,930
  • Average student loan debt: $34,146
  • Average credit score: 732
  • Median mortgage payment: $2,165
  • Bankruptcies: 776
  • Personal income/Annual mean wage: $72,940
  • Child poverty: 11.3%
  • Unemployment: 3.4%

Debt relief options for Massachusetts residents

Here are some of the most common ways of finding debt relief in Massachusetts:

  • Debt consolidation loans: A debt consolidation loan is a loan that combines several high-interest debts into one loan with a single monthly payment. If you have good or excellent credit, you could get a lower overall interest rate and save money on interest charges.
  • Debt management plan (DMP): A DMP is offered through credit counseling companies to people with high amounts of unsecured debt. The agency works with your creditors to help lower monthly payments and interest rates, as well as potentially waive certain fees.
  • Debt settlement: A debt settlement agency can negotiate with your creditors to try to reduce how much you owe on an account.
  • DIY plans: For those dealing with debt collectors, a DIY debt settlement plan could help. With one, you could cut down on how much you owe or set up a better repayment plan.
  • File for bankruptcy: Bankruptcy may be a last resort, but it could help if your credit is already ruined and you’re drowning in debt. The most common types of personal bankruptcy are Chapter 7 and Chapter 13. You may not be eligible for both, so speak with an attorney about your options.

Debt settlement in Massachusetts

Debt settlement companies offer debt settlement, the process of reducing how much you owe on certain unsecured debts — sometimes by 50% or more.

When you go this route, you’ll need to start making payments into a secured account while a professional negotiates with your creditors to lower your debts. If a creditor agrees to settle your debt, the agency will pay them the new amount using the funds in the account, usually in a lump sum.

During the process, you may be unable to use any credit cards except one for emergencies. The debt settlement company may also request that you stop making payments on any enrolled accounts. This could boost your odds of success, but it could also cause a ding on your credit score and result in late fees.

Although debt settlement isn’t for everyone, it may be a good option for you if you’re:

  • Struggling with multiple monthly debt payments
  • Have fallen behind on bills and can’t catch up
  • Are using credit cards or expensive loans for everyday expenses

Most unsecured debts are eligible for debt settlement, including:

  • Department store cards
  • Credit cards
  • Personal loans or lines of credit
  • Old judgments
  • Student loans in default

Massachusetts debt relief companies

Looking for a Massachusetts debt relief company? Here are some options:

Debt settlement attorneys

Here are a few highly-rated debt settlement attorneys in Massachusetts:

Debt resources for Massachusetts residents facing hardship

In Massachusetts, many resources and programs exist to help those struggling with debt or the cost of living. Depending on the program, these could help with things like:

  • Mortgage or rent
  • Utility bills 
  • Healthcare expenses
  • Childcare assistance

Massachusetts also has food banks and pantries to help those who need help finding free, nutritious food. This is good news for the roughly 497,250 residents facing hunger (around 7%).

Here’s a list of food pantries in Massachusetts. And here are some of the main food banks:

State hardship programs

Massachusetts offers a variety of state hardship programs to those who need financial assistance. Here are a few:

  • Massachusetts Housing Assistance: Offered through Housing and Community Development, this resource helps low-income residents find information about affordable housing.
  • Single Family Housing Repair and Grants Program: The Section 504 Home Repair program helps people who need help modernizing or repairing their homes. It’s geared toward low-income households and elderly individuals. If found eligible, you could receive a loan to help reduce potential safety hazards.
  • Low Income Home Energy Assistance Program: LIHEAP provides eligible individuals with a way to pay for heating bills and increase energy efficiency.
  • Children’s Health Insurance Program: The MassHealth program combines CHIP and Medicaid to help families with children under the age of 19 find affordable healthcare. It can cover things like doctor visits and prescription medication.
  • SNAP – Supplemental Nutrition Assistance Program: Formerly called “food stamps,” SNAP helps low-income residents through a small monthly food stipend.
  • Combined Application Project: Individuals who receive SSI benefits may also receive SNAP benefits easier with CAP. Find more information about CAP and how it connects to SNAP here.
  • WIC: The Women, Infants, & Children Nutrition Program assists families with children receive nutrition-related education and free nutritious food.
  • Organization for Refugees & Immigrants: This resource provides refugees and immigrants information about things like employment, healthcare, and financial services to help them settle in the state.
  • TAFDC: This program offers cash benefits to eligible households.

Debt collection laws in Massachusetts

Massachusetts complies with the FDCPA or Fair Debt Collection Practices Act. This is a federal law that regulates third-party debt collectors and prevents them from engaging in certain deceptive, manipulative, or threatening activities to collect money.

Massachusetts also has its own debt collection regulations to protect residents from harassment and unfair debt collection practices. In fact, the Office of the Attorney General has publicly established standards for debt collection in the state. These regulations extend to the original creditors and their attorneys, as well as third-party agencies.

Among other things, these regulations prohibit the following:

  • Communicating with the borrower directly if they have an attorney representing them.
  • Contacting the borrower outside of their waking hours. If unknown, the default acceptable hours are between 8:00 am and 9:00 pm.
  • Engaging in threats (ex. threats of arrest) if the debt is not paid.
  • Informing others about the debt without the original borrower’s consent.

Massachusetts’ debt collection regulations also help enforce those found in the FDCPA. For more information about debt collection in the state, head to: https://www.mass.gov/service-details/fair-debt-collection

Income and employment in Massachusetts

Currently, Massachusetts ranks 6th in the country in job creation with 146,300 new jobs. The unemployment rate is also low at 3.4%. This is 0.3% lower than the national unemployment rate. It’s also a major improvement over the state’s 17.1% unemployment rate in April 2020.

Massachusetts has laws similar to those found in right-to-work states. In particular, employees do not have to join a union as a condition of employment.

The state is also an employment-at-will state. This essentially means that an employer may terminate an employee at any time with or without cause (except for discriminatory or illegal reasons). It also means an employee may quit under the same conditions. The main downside is that some positions come with less job security.

How to apply for unemployment benefits in Massachusetts

To apply for unemployment benefits in Massachusetts, start by going to the Massachusetts government website and find the section for unemployment. Click on Apply for UI Benefits and you’ll be taken to a page that tells you what you’ll need to apply and the steps involved.

Information you’ll need includes:

  • Personal information (ex. Social Security number, date of birth, and home address)
  • Contact information (ex. phone number and email)
  • Employment history from the past 15 months

Once you have what you need, you can apply in one of two ways:

  • Log into the UI Online Portal and start the application process.
  • Call the TeleClaim Center at (877) 626-6800 during business hours (8:30 am – 4:30 pm EST Monday to Friday).

After applying, you’ll receive a Non-Monetary Determination indicating whether you’ve been approved. If approved, you’ll need to start looking for work. You’ll also need to request weekly unemployment benefits based on your information. Depending on what you choose, you’ll receive benefits either through direct deposit or a debit card.

Banking and taxes in Massachusetts

The individual personal income tax in Massachusetts is 5% for the 2022 tax year. The state’s sales tax is 6.25%.

In the USA, around 4.5% of households are unbanked. This means nobody in the household has a checking or savings account. In Massachusetts, 3.6% of residents are unbanked. People who are unbanked are more likely to use expensive financial services like payday loans or cash advance apps.

Massachusetts housing market

The owner-occupied housing rate in Massachusetts is 62.4%. The average home value in the state is $580,086. For comparison, the typical home value in the country is $357,544.

Massachusetts residents have a median mortgage payment of $2,276. The median rent payment in the state is currently $3,100, a $400 increase from January 2022.

Massachusetts’ Homeowners Assistance Fund (HAF) is geared toward homeowners who were impacted by the pandemic and have missed three or more mortgage payments. It provides up to $50,000 to residents who are behind on their mortgage payments. The program’s funds are sent directly to the mortgage servicing company.

For eligibility requirements or to start the process, fill out an application on the HAF website.

Retirement in Massachusetts

The average Massachusetts resident needs about $1,120,304 to be able to retire and live comfortably. However, the average resident has closer to $478,947 in retirement savings.

Average Massachusetts insurance premiums

The average car insurance premium policy is $1,296 a year for full coverage. This is about average in the country.

Meanwhile, the average homeowner insurance policy is $1,274 annually for a $25,000 property. This is also standard in the USA.

Payday lending status in Massachusetts: Prohibited

Payday loans are illegal in Massachusetts.

  • Maximum loan amount: N/A
  • Maximum Interest Rate (APR): N/A
  • Minimum loan term: N/A
  • Maximum loan term: N/A

Statute of limitations on debt in Massachusetts

The statute of limitations on most consumer debts is six years. However, it can reach up to 20 years if the debt collector or creditor has a judgment against the debtor (the person who owes the debt).

  • Medical debt: 6 years 
  • Credit card: 6 years
  • Auto loan debt: 6 years
  • State tax debt: 10 years

Help for Veterans

As of 2020, Massachusetts was home to 309,447 Veterans. The Massachusetts Department of Veteran Affairs offers various resources to Veterans and their spouses who are facing hardships like homelessness or unemployment.

Facilities in Massachusetts

Need a VA facility in Massachusetts? Here are some of the main ones:

Employment resources for Veterans

The MassHire Department of Career Services has many career opportunities and programs to help Veterans seeking employment. Other resources that may help include:

  • CareerOneStop for Veterans seeking civilian jobs
  • MilitaryHire.com for Veterans who need a place to post their resume or apply for work
  • VeteranRecruiting.com for Veterans and eligible spouses seeking employment opportunities or interested in virtual career fairs
  • Helmets to Hardhats for active duty military members and Veterans seeking work in the construction industry
  • Hiring Our Heroes for those seeking job training or networking opportunities
  • My Next Move for Veterans looking for a civilian job that uses their military-earned skills
  • Warriors to Work for those who need help with things like career counseling or updating their resumes

The bottom line

Massachusetts residents can find debt relief in many forms, ranging from credit counseling agencies to debt settlement plans. The state also offers specific hardship programs for low-income households or those struggling with finances. Whatever the case may be, if you’re in the midst of extreme financial hardship, it may be time to speak with an agency for help.

FAQs

How long can a debt be collected in Massachusetts?

Creditors can collect most consumer debts for up to six years. If a debt collector has obtained a judgment, however, they can collect on the debt for up to 20 years.

When does the statute of limitations begin in Massachusetts?

Typically, the statute of limitations begins when the borrower first breaches the contract (if written) or on the last date of payment.

Am I responsible for my spouse’s debt if I get divorced in Massachusetts?

If your spouse incurred the debt before the marriage, it will typically be their responsibility to repay it. Debts incurred during the marriage may be considered marital debt and be both of your responsibility.

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