10 MIN READ
Published July 27, 2023 | Updated February 08, 2024
Expert Verified
Written by Christie Hudon
Edited by Wes Silver
Reviewed by Brad Reichert
Turbo Takeaways
Here are some quick stats about debt relief in Houston:
- Residents of Houston, Texas, carry anaverage consumer debt of $43,388 compared to the national average of $49,454.
- Houstonians can access debt relief through several options: debt settlement, credit counseling, debt consolidation, debt forgiveness, and bankruptcy.
- Choosing the right debt relief option in Houston depends on your monthly expenses, lifestyle, and debt-to-income ratio.
- We enrolled over $7 million in TurboDebt’s Houston debt relief programs in 2022.
Houston’s Debt Landscape
Houston is a vibrant city home to over 2 million people. With an economy centered around the energy industry, Houston produces more of the world’s petrochemicals than any other metropolitan area. It’s also a growing center for biomedical research and has long served as a hub for aerospace innovation.
While Houston, Texas, is an economic powerhouse in one of the U.S.’s most populated states, residents of The Space City still struggle to overcome debt. A total of37% of Harris County residents have at least one type of debt in collections,with 4.5% delinquent on credit card payments.
In fact, 19% of all Houstonianslive in poverty, a sign that financial hardship is a big concern for The Space City.
Houston’s housing market also contributes to residents’ debt concerns. High interest rates and increased prices make it harder for first-time and local buyers to afford properties. In May of 2023,a single-family home in Houston averaged $431,378, a slight drop of 1.6% from the previous year. However, home listings rose over 45%, showing a fluctuating market that’s still pretty volatile for both buyers and sellers.
Read on to get a snapshot of The Space City’s financial outlook, get info about Houston debt relief programs, and learn more about how TurboDebt helps Houston residents get back on track to living debt free.
Signs You Might Need Debt Relief
When you’re stuck in a cycle of compounding debt, you may find yourself saying, “Houston, we have a problem,” just like Apollo 13’s astronauts. For many Houston residents struggling with unpaid balances on credit cards, medical bills, or personal loans, it’s time to consider getting help through debt relief.
Judging your personal debt situation depends on several factors, including monthly spending habits, income and expenses, and your methods for saving and budgeting. If you’re spending much more than you bring in every month, you’re likely to pile up debt quickly. But even careful budgeters get into trouble when unexpected costs like medical emergencies or even home repairs arise, making debt relief a real need.
A good way to start deciding when you need to seek relief help is to look at yourdebt-to-income ratio (DTI). You can figure this out through a simple calculation by adding your monthly debts together and dividing that total by your monthly gross income. Finally, multiply this number by 100 to get a percent.
A DTI ratio of 35% or less is ideal for managing your monthly expenditures. If your DTI sits below 43%, that’s considered manageable. However, anything above 44% means your financial situation could make you unable to pay back the debt you owe.
More signs that indicate a need for debt relief include:
- You have no money put aside for emergency funds.
- You owe balances on multiple credit cards.
- You can’t afford to put any money into savings.
- You borrow more to make purchases.
At TurboDebt, we can look at your DTI and work together to tackle your outstanding debts. When you get started with a free consultation, our experts can help you navigate your unique financial situation. Together, you’ll make a plan to clear your debts and start saving toward future goals.
Best Ways to Get Debt Relief in Houston
Space City residents can access several effective means of debt relief depending on their income, needs, and lifestyle. Here are the top ways to get debt relief in Houston:
- Allows you to pay off your debt in as little as 24 months
- Reduces your debt by up to 50% in some cases (before fees)
- Reduces your debt by up to 50% in some cases (before fees)
- Allows you to pay off your debt in as little as 24 months
- Reduces your debt by up to 50% in some cases (before fees)
- Allows you to pay off your debt in as little as 24 months
Debt Settlement
| Summary | -Involves letting a third party negotiate with your creditors to reduce the total amount you owe |
| Pros | -Reduces your debt by up to 50% in some cases (before fees)-Allows you to pay off your debt in as little as 24 months |
| Cons | -Requires you to stop paying off your credit card, which can negatively impact your credit score |
| Helpful for | -Individuals carrying $10,000 or more in credit card debt-Those able to make consistent monthly payments-Poor credit scores |
If you’re carrying thousands of dollars in credit card or other unsecured debts, a settlement can effectively reduce what you owe. When you enroll with a debt settlement company, you’ll often structure an agreement to pay significantly less than your current outstanding balance.
Once you start the process of debt settlement in Houston, the settlement company negotiates with creditors on your behalf while you pay into a savings account. After all parties reach an agreement and you’ve saved enough funds, your money goes toward a lump sum payment to pay off the debt you owe entirely.
Credit Counseling and Debt Management Programs
| Summary | -Involves working with a certified credit counselor to learn financial strategies and structure debt payments |
| Pros | -Reduces high interest rates and eliminates fees in many cases-Helps you make a plan to pay off debts |
| Cons | -May require a commitment to take classes in financial management |
| Helpful for | -Individuals who are struggling to pay off debt and need help budgeting or making monthly payments-Good to fair credit scores |
Credit counseling agencies offer multiple ways to help debtors. The first is by connecting you with a certified credit counselor to complete financial education courses. Through these classes, you’ll learn budgeting techniques, money management solutions, and tips to help you avoid future debt.
Another service some credit counseling agencies offer is a debt management plan. This plan helps you consolidate and restructure monthly payments and may even reduce your interest rates. Once you set up a debt management plan, you’ll make monthly payments to the credit counseling organization, which then pays your creditors.
Debt Consolidation
| Summary | -Involves securing a loan at a lower interest rate to pay off all your existing debts |
| Pros | -Eliminates multiple high interest debts-Creates a single monthly payment |
| Cons | -May not reduce your total debt amount if you can’t secure a low interest rate |
| Helpful for | -Individuals looking to simplify monthly payments and lower interest rates-Fair to good credit scores |
With debt consolidation in Houston, you exchange multiple payments for a single monthly sum toward a new loan. If you’re struggling to pay off many existing credit card balances or other unsecured accounts, this option can be an effective choice. However, a debt consolidation loan works best if you have a good credit score to secure a low interest rate.
First, contact multiple lenders to discover the best interest rate. Once you secure the funds, you’ll pay off your other debts, leaving you with a single loan payment each month.
Debt Forgiveness
| Summary | -Involves qualifying for a program to eliminate all or some of your debt |
| Pros | -Clears most, if not all, of your debt |
| Cons | -Uncommon debt relief solution with many requirements-Forgiven debts can be taxable as ordinary income |
| Helpful for | -Individuals facing extreme financial hardship who have difficulty making any monthly payment toward their debts-Poor credit scores |
Debt forgiveness is an uncommon form of debt relief that’s offered through government agencies at the federal and state level. If you qualify based on factors like your income and profession, you may receive forgiveness for a portion or all of your debt.
Look for student loan forgiveness through programs for teachers and public servants from the Department of Education. Low-income residents can also find mortgage help through the Department of Housing and Urban Development.
Bankruptcy
| Summary | -Involves pleading with the court system to discharge some or all of your debts |
| Pros | -Can legally alleviate your debt burden through the help of legal professionals |
| Cons | -Involves a lot of time, fees, documentation, and legal proceedings-Negatively impacts your credit for 10 years or more |
| Helpful for | -Individuals at risk for legal action against debts with no means to repay creditors and lenders-Poor credit scores |
Bankruptcy is considered a last resort for relieving debt. This process requires legal assistance as you petition the court to forgive or reduce your debts. First, you’ll need to decide whether to pursue Chapter 7 or Chapter 13 bankruptcy, the most common type filed by individuals with heavy debt burdens.
Chapter 7 bankruptcy involves liquidating your assets to pay creditors and clear your debts permanently in the process. Chapter 13 reorganizes your outstanding balances, creating a court-ordered payment structure using your assets. Either way, your credit score drops and can take 10 years or more to restore, making it hard to secure loans or open new lines of credit during that time period.
Brad Reichert, debt expert and Founder and Managing Director of Reichert Asset Management LLC, advises individuals to find a reputable law firm before pursuing bankruptcy or taking other legal action related to debt.
“If your personal debt situation requires legal advice or representation,” Reichert explains, “seek out organizations with licensed attorneys on staff or those working in collaboration with reputable law firms experienced in debt relief and consumer protection laws.”
TurboDebt Helps Houston Residents Get Out of Debt
In 2022, TurboDebt enrolled over $7 million in debt from hundreds of Houston residents. Clients enrolled an average debt of $22,670, working with us to alleviate their financial burdens.
If you’re carrying over $10,000 in unpaid debts, TurboDebt can help you too. It starts with a free consultation so we can get to know your unique financial needs. Together, we’ll make a plan to get you debt-free.
Houston Residents Need Relief from These Top Types of Debt
If you’re looking for debt relief near Houston, it’s a good idea to determine what’s causing you to struggle financially. Residents of Houston struggle most with these debts:
- Credit Card Debt: Credit cards carry some of the highest interest rates for borrowers, making it easy to get caught in a cycle of debt if you miss a payment or can only pay the minimum amount. With credit card debt rising steadily for the entire U.S. population in the past few years, Houston residents are no exception, owing about $6,000 on average.
- Divorce Debt: Divorces are costly, with legal fees and debts inherited from a spouse once the court divides payments, leaving many H-Town residents in financial trouble. Harris County’sDispute Resolution Center offers mediation assistance for divorcing couples with a combined income of $100,000 or less with no substantial financial holdings for those struggling with dividing assets or other legal rights.
- Medical Debt: An unexpected stay at Houston Healthcare or Memorial Hermann can leave you with high medical bills that strain the budget. In an inflationary economy, choosing between paying off a medical procedure or your monthly credit card bills can easily become a struggle.
- Business Debt: Houston is home to growing corporations but also supports plenty of small businesses, offering incentives through theirtax abatement programs. As Space City business owners try to bounce back after the pandemic, many use their own funds to keep their companies thriving, leading to huge debts from personal loans or even credit card purchases.
- Homeowner Debt: Mortgage debt accounts for the largest chunk of consumer debt in America, and it’s no different for Houston residents who carry an average mortgage payment of around $1,800 a month. HELOC balances also strain Houstonians trying to take out loans based on their home’s equity.
- Retirement Debt: Those who choose to retire in The Space City should carefully consider their savings. Living on a fixed income in a metropolis like Houston can impact how much you pay for rent, health care costs, and other living expenses, leading you to debt.
If you’re struggling with any of these financial burdens, TurboDebt offers services to help restore your finances and eliminate outstanding balances. Our debt relief solutions have helped hundreds of Houston residents become debt free. Get started today with a free consultation.
Houston Debt and Finance Statistics
Taking a look at the overall consumer debt and income of Houston residents gives a clearer measure of the city’s financial health, along with that of its citizens. Read on to learn more about Houston’s most relevant fiscal stats:
Consumer Debt
Consumer debt combines the average amount of individual debt for auto and student loans, mortgages, and credit cards. Houston residents carry anaverage consumer debt of $43,388. For those that own a home and are paying a mortgage, that number skyrockets. Here’s how the rest of it breaks down for Houstonians:
- Credit card debt: $6,577
- Auto loan debt: $26,042
- Mortgage debt: $221,575
- Student loan debt: $30,920
Bankruptcy
Texas’s Southern District, which includes Houston, reported6,198 bankruptcies in March of 2023. This is an increase of 22.2% from the previous year, indicating that bankruptcies are again on the rise due to economic challenges across the U.S.
Average Income and Employment
Houston residents brought in amedian household income of $56,019 in 2021, according to the U.S. Census. While Houston’s big industries with high-paying jobs include aerospace and biomedical sciences, nearly 20% of the population still lives in poverty.
Additionally, Houston’s unemployment rate sat relatively high at4.4% in May of 2023. Compared to the national average of 3.7%, this indicates that a growing number of Houston residents out of work may find it difficult to pay for essential items and fall into debt.
Credit Scores
Houston residents carry anaverage credit score of 663, falling in the “fair” category of FICO scores. This score actually puts Houstonians at risk for securing loans at a higher interest rate. Credit scores below “good” can also make it harder to secure any type of loan, especially if you’re shopping for a car or a new home.
TurboDebt Offers Debt Relief for Houston Residents
If you’re struggling to pay off thousands of dollars in debt, you’re not alone. With an inflationary economy and rising unemployment in The Space City, many who live in the area are finding it harder to handle their monthly expenses, let alone debts from medical bills, loans, or unexpected costs.
The good news is you have options for debt relief. Last year, TurboDebt helped 323 Houston residents pay off over $7 million in outstanding debts through our strategic planning, advising, and Houston debt relief programs. In fact, out of all the areas we serve,we helped more clients in Houston with debt relief than any other city in the U.S.! Contact us today for a free consultation to get started on your own journey toward debt-free living. It’s time for you to thrive in H-town!
Disclaimer: TurboDebt is not affiliated with the city of Houston, Texas, and does not offer any official debt relief programs sanctioned by the city.
