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In terms of geographical size, New Jersey is the 4th smallest state in the United States. The state has a population of 8.8 million (11th most populous state in the US), a little too high given its small geographical size. That makes it the most densely populated state in the United States. New Jersey is a fairly affluent state with a lot of natural wealth and a resourceful population. New Jersey’s median income average as of 2015 was $72,093, significantly higher than the nation’s average. This figure suggests that New Jersey residents are relatively affluent, make timely payments on their credit card debt, and have well-established credit card accounts. But that’s not entirely true.

Poverty, Unemployment, and Socioeconomics in Newark and the New Jersey Region

The average credit card debt in the state of New Jersey is $7,608, a figure considerably larger than United States’ average credit card debt, which is at around $5,235. When it comes to credit rating, the residents of New Jersey are not badly off either, with an average of 676. This puts them on the better than average side of the equation. The New Jersey’s poverty rate is 10.8 percent, and the unemployment rate is 7.3 percent. These statistics are far worse in major New Jersey cities with Newark — the largest city in New Jersey — leading the pack.

Newark has a population of 281,944. Nearly 30 percent of this population lives below the poverty line. The median household income in Newark is $33,139, less than half of the state’s average income. At about 14 percent, the city’s unemployment rate is much higher than the state’s. Income disparities in the city, as well as the state, worsen the situation. Reports from the Garden State indicate a widening gap between the rich and the poor to mirror the global situation.

Debt Settlement

The high number of people living below the poverty line are higher in Newark as compared to other cities in the state. A significant portion of this population is struggling to make ends meet, and many are relying on their credit cards. As a result, many of these people find themselves overwhelmed with massive unsustainable levels of credit card debts, medical bills, rent and personal loans. Consequently, there has been an increase of debt settlement firms in Newark to serve residents who opt to pursue this debt relief option.

So, what does debt settlement entail? Debt settlement as a debt relief option allows the debtor to pay back only a fraction of the amount they owe their creditors. In return, the debtor is supposed to make a one-time payment of the agreed amount, and the creditor forgives the remainder. But why would a creditor agree to such an arrangement? In most cases, people seeking debt settlement programs are going through a serious financial crisis and are on the verge of filing Chapter 13 bankruptcy. If a creditor declines your debt settlement request, they risk losing the entire amount should the debtor file for bankruptcy. Other forms of debt relief options in Newark, NJ include credit counselling, debt consolidation, and debt management.

How Newark Debt Settlement Programs Work

When you approach a debt settlement company, a company representative will be assigned to your case. The first step is for the company to inform your creditors to cease all communications with you and deal with them directly. The company representative will negotiate on your behalf with the goal of scoring the best possible deal. Once a figure has been arrived at, you will pay the amount to the debt settlement company which will deduct its commission and pay your creditors. If you don’t have the lump sum, you will pay instalments which will be held by the debt settlement company in a checking account until it’s sufficient to pay off your creditors. Check the company’s accreditation and rating with the Better Business Bureau before you agree to work with them.

Benefits of Using a Newark Debt Settlement Program

Besides eliminating your debts in a short period, you can save a significant amount of money you could have used to pay off your debt, but this will depend on the amount you owe and how desperate your creditors are. However, debt settlement programs could have detrimental effects on your FICO scores and impact your borrowing capability for the next few years. The effects of a debt settlement program on your credit score are not long lasting and can be easily reversed.

Debt Relief Laws in New Jersey

Judges determine the New Jersey Wage Protection depending on your earning. However, wage protection is 90 percent for people who make less than $7,500. Collection agencies are prohibited from charging more than 6 percent interest rate. New Jersey debt collection agencies are regulated by a federal set of laws referred to as the Fair Debt Collection Practices Act (FDCPA). The New Jersey statute of limitations is 6 years.