With a population of 8.9 million, New Jersey is the 11th most populous state in the US. Geographically, it is the 4th smallest state in the country (8721 square miles). New Jersey has a population density of 1,030 people per square mile, making it the most densely populated state in the United States by far. Economically speaking, New Jersey is a fairly affluent state. The state has an annual median income of $68,342, a figure that is considerably higher than the national average. As of 2015, the state’s unemployment was at 5.6 percent, slightly improving from the dismal figures reported in previous years.
Like many other American states, some of the aforementioned figures don’t accurately represent the standards of living in New Jersey. Much of this inaccuracy can be attributed to the income disparities between the state’s top and bottom income households. Therefore, a large part of New Jersey’s low-income populace is struggling. About 10 percent of the population live below the poverty line, and though the state has an average credit score of 676, many low-income New Jerseyites are struggling with credit card debt, medical bills and other types of unsecured debts.
If you are a New Jersey resident with loads of unsustainable debt, you have a couple of options that can help you out. You have probably come across one of these get-out-of-debt-now services, debt reduction and debt relief advertisements on TV telling you how they can get you out of debt in less than a year. Don’t fall for any of that; there’s a decent chance of getting scammed. Instead, approach your creditors personally or through a reputable debt settlement company for help if you are having legitimate debt payment issues. There’s a very little likelihood that your offer will be turned down.
What Is Debt Settlement?
Debt settlement programs allow debtors to pay back only a fraction of the monies owed if they can foot the remainder in a single payment. Simply put, you only get to make a one-time payment of a given percentage (say 60%) of the amount you owe and the creditor agrees to forgive the rest. For instance, if you owe a particular lender $10,000, they can arrange for a debt settlement program where you get to make a lump sum payment of $6,000, and the company will forego the rest. It’s a win-win situation for both the debtor and the creditor. It will ease the debtor’s debt burden and help lender get some of its monies back as opposed to what would happen if the debtor became delinquent or filed for bankruptcy.
How New Jersey Debt Settlement Programs Work
As stated earlier, you can choose to undertake the process of debt settlement by yourself or get professional help from a legitimate debt settlement company. A debt settlement firm assigns a specialist to handle your case and negotiate on your behalf. The goal is to get your lenders to accept the lowest payment possible and forego a huge part of the amount owed. Therefore, it’s just a matter of convincing the creditor that your situation is bad enough to warrant the deal. The lender may agree to forgive up to 50% of the total amount. Conduct a detailed background check on the debt settlement company to establish its legitimacy before you make any dealings.
New Jersey Debt Settlement Laws
The state of New Jersey abides by the federal Fair Debt Collection Practices Act (FDCPA). Under the FDCPA:
- The original creditor is only allowed to make a maximum of four personal contacts with the debtor after receiving the notice to cease communication.
- The original creditor cannot communicate with any person who does not reside in the debtor’s home, except other creditors and credit bureaus.
- A collection agency cannot exceed the specified interest rate of 6%.
- After the debtor has informed the creditor to cease communication, the creditor is only allowed to send one notice per.
- The cease contact rule will be voided if the original creditor sues and wins the case.
Benefits of Using Debt Settlement Programs in New Jersey
Besides helping you relieve your debt burden, debt settlement programs help consumers pay up their debts in a shorter period. Debts that would have taken about 10 or more years to settle can be paid in a period of 2-4 years or even shorter. However, debts settled via these programs will still appear on your credit report and stay there for a while and possibly lower your credit score.