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Alaska Debt Relief Guide

Alaska is considered one of the most expensive states to live in. For one, Alaska is miles away from the “lower” 48 states, which makes it harder to bring in consumer goods. Thankfully, Alaskans have access to Permanent Fund Dividend checks to offset the higher cost of living, as well as having no state or income tax.

However, even with those added financial perks, Alaskans and the state have been heavily affected by the pandemic. This has led to an increase in credit card debt. In fact, Alaskans have more credit card debt than consumers in any other state, with an average balance of $6,617.

“Many credit users in Alaska are getting to a point where their debt levels are simply unsustainable,” says Gary Herman, President of Consolidated Credit. “At a certain point, you simply won’t be able to keep up with the bills and maintain a balanced budget. For Alaskans facing these types of debt levels, it’s critical that they develop the right plan to pay off their debt.”

Consolidated Credit Helps Alaska Residents Reduce Their Total Credit Card Payments by Up to 50%

Consumer Debt in Alaska

This chart shows a breakdown of average consumer debt in Alaska based on the latest Household Debt report from the Federal Reserve.

In 2020, 313 Alaskans filed for bankruptcy compared to the previous year’s filing total of 404.

Income and employment in Alaska

With a per capita (average per person) income of $64,780, Alaskans are fairing pretty well considering the national average is $59,729. They also have a median household income of $77,640. And they have a minimum wage of $10.34, which is fairly higher than the $7.25 federal minimum wage.

Since Alaska is not a right-to-work state, employees can choose whether they would like to join a union or not. Union members may also resign their union membership. Non-members are only required to proportionately pay for their part of a union’s proven bargaining costs.

Additionally, non-members may not be forced to pay any fees until the costs have been stated. And even then, the individual can challenge the costs provided by the union. 

Furthermore, Alaska is an employment-at-will state. This means that at any given moment and for any reason at all employment may be terminated. Therefore, neither the employer nor the employee guarantees they will uphold employment. Hence, they may also terminate their relationship in a similar fashion.

Those two facts together mean that Alaskans have some great job opportunities and career flexibility. However, at the same time, it means that residents can also get undercut on income and have less job security.

Throughout 2020, Alaska maintained high unemployment rates of around 6.6 percent. And by September 2021, the percentage dropped slightly to 6.3 percent, which was still 1.5 points above the national average. Alaska currently has some of the highest unemployment in the nation. In fact, only eight other states have higher rates.

Apply for unemployment benefits in Alaska »

Banking and taxes in Alaska

Alaska has no income tax rate and no state sales tax. The total state and local tax burden Alaskans face comes out to 5.16% of personal income, the lowest tax burden across all fifty states.

Additionally, all Alaskan residents receive annual payments from the Alaska Permanent Fund Corp. The annual payments are made up of revenue and investment earnings from mineral lease rentals and royalties. As of 2021, the per citizen dividend payment is $1,114.

Banking is also fairly common compared to most states. Residents without a checking or savings account represent only 3.4% of the population.

Alaska housing market

For many Alaskans, it has been frustrating buying a home in a seller’s market. The largest and most populous city in Alaska is Anchorage, accounting for 40% of Alaska’s population.

Unsurprisingly, that means Anchorage has a highly competitive housing market, with prices well above average Alaskan housing prices. Anchorage has a median home listing price of $375,000, with homes spending an average of 47 days on the market. By contrast, the second most populous city of Fairbanks has a median home listing price of $330,000 with homes averaging 58 days on the market.

Naturally, Anchorage remains a seller’s market. Why? Because more people are trying to purchase homes while the development of new homes lags behind. Therefore, there aren’t enough homes on the market, which leads to a competitive landscape for Alaskan homebuyers.

Alaska offers a homestead exemption of $72,900. The exemption applies to manufactured home if they are used as a primary residence.

You can file for bankruptcy in Alaska after living there for over 180 days. However, in order to make use of the exemptions, you would must live in the state at least 730 days in Alaska before filing. Otherwise, you would use your previous state’s exemptions.

  • 64.3% of Alaskans are homeowners
  • Median mortgage payment: $1,907
  • Median rent payment: $1,244

If and when you are finding it challenging making rental payments, you can seek assistance through Alaska’s rental programs. For those seeking mortgage relief, Alaska offers a lending hand through the Alaska Housing Relief.

Talk to a HUD-certified housing counselor to get help with the housing challenges you’re facing

Retirement in Alaska

Currently, the average Alaskan has $489,070 saved for retirement, which is less than half what you would need to retire comfortably in the state. The average retiree will need about $1,340,000 in savings to live comfortably in retirement.  

Though Alaska’s climate and its cost of living – mostly due to Alaska’s remote location – may turn people away from retiring in the state, its tax rates continue to turn people’s heads. And for the 13% of retirees relying on their Social Security for at least 90% of their income, the fact that Social Security income is not taxed remains a huge draw to retiring in the state.

Average Alaska insurance premiums

As is the case with most states across the U.S., Alaska operates under a fault-based system when it comes to car accidents. For this reason, along with an average of $1,175 yearly for auto insurance premiums, it is essential for injury and property damage that victims to have proof of liability so they may be compensated for their losses.

On the other hand, average annual home insurance premiums are fairly low at $1,103. But when it comes to average health insurance premiums, expect to fork out no less than $6,869 annually.

Helpful resources for Alaskans facing hardship

Food Insecurity

City/RegionFood BankPhone NumberAddress
AnchorageFood Bank of Alaska, Inc.907-272-36632121 Spar Avenue, Anchorage, AK 99501
FairbanksFairbanks Community Food Bank907-457-4273725 26th Ave., Fairbanks, AK 99701
SoldotnaKenai Peninsula Food Bank907-262-311133955 Community College Dr, Soldotna, AK 99669
JuneauSoutheast Alaska Food Bank907-789-618410020 Crazy Horse Drive, Juneau, AK 99803

Veterans

As of 2019, Alaska was home to 65,186 Veterans. These resources are available to help Veterans that are facing unemployment, homelessness, and other hardships.

Unemployment Benefits: 

  • Minimum per week: $56-$128
  • Maximum per week: $370-$442
  • Maximum availability of benefits: 26 weeks

General Information about the Unemployment Insurance Program:

https://labor.alaska.gov/unemployment/

To file a UI claim online:

https://my.alaska.gov/

To file a claim by telephone number:

https://labor.alaska.gov/unemployment/call-centers.htm

Coronavirus update: Alaska is providing updates on Unemployment Insurance changes related to COVID-19 here:

https://labor.alaska.gov/COVID-19-programs.htm

Veteran Resources:

https://www.dmva.alaska.gov/

https://veterans.alaska.gov/

https://www.va.gov/directory/guide/fac_list_by_state.cfm?State=AK&dnum=All

Helpful employment resources for Veterans:

How Consolidated Credit helps Alaska residents find debt relief

In 2021, Consolidated Credit provided free credit counseling to 310 Alaska residents. Of those, 12 went on to consolidate their debt with our help through a debt management program (the average amount of debt enrolled was $7,674). The others received a free debt analysis and complementary budget evaluation, and they were directed to the right solution for their situation to get out of debt as quickly as possible.

We’d also like to congratulate the 8 Alaska residents that got debt-free last year with the help of Consolidated Credit!

Relief options to consider if you’re in debt in Alaska

If you have good credit and need to pay off credit card debt and other non-secured debts, a debt consolidation loan is an excellent option for you. By having good credit, you’ll get a low-interest rate for a loan that refinances all of your debt with one monthly payment. This will help you get out of debt faster, and you may wind up paying less each month. This is an excellent solution for Alaska residents with high debt and a good credit score.

Alaskan homeowners may qualify for a home equity loan or a home equity loan of credit, sometimes called a (HELOC). These types of loans use the equity in your home. Due to rapid home value increases, many residents have equity in their homes. The loan allows you to borrow against the equity in your home and pay off credit cards and other debt. This is not a step to take lightly because you could lose your home in foreclosure if you can’t make the payments. If you are considering borrowing against your home, call 1-800-435-2261 to speak with a HUD-certified housing counselor to make sure this is a safe option for you.

Consolidated Credit helps Alaska residents with counseling programs that identify the best way to get out of debt after considering their situations. Alaska residents can get a confidential debt and budget evaluation from a certified credit counselor. Afterward, the counselor will go over the available options and which course of action best meets a person’s needs and goals.

In Alaska, as in other states, it’s best to avoid bankruptcy. If you can afford to repay all that you owe to avoid credit damage but can’t do it on your own, a debt management program can help. You enroll through a credit counseling agency. The agency will work with your creditors to reduce or eliminate interest and work out a payment schedule. Qualifying Alaskans can get out of debt in 36-60 payments, on average.

Another option for Alaska residents is debt settlement. With debt settlement, you settle your debt independently or with the help of a debt settlement company. In this program, you agree to pay your creditors a portion of what is owed. This will damage your credit rating because you are not paying on the terms you first agreed to. Late payments, which are often part of this program, will hurt your credit rating for seven years. Even with those negatives, this can be an excellent program for Alaskan residents with overwhelming debt. It can help you avoid bankruptcy.

If you’re curious how we can help you, below, you will find a few case studies from clients that we’ve helped in Alaska. If you’re facing challenges with debt, call us at (844) 276-1544to receive a free debt and budget evaluation from a certified credit counselor.

If you’re tired of making payments and getting nowhere, talk to a certified credit counselor to review your options for debt relief.

Case Study

Bobby from Pangburn, AK

“This has been a very good, professional solution to our problem. Everything was handled in a timely fashion and the results have been outstanding. I sincerely believe you cannot find any service that can compare with them. ”

Where he started:
  • Total unsecured debt: $28,814.34
  • Estimated interest charges: $16,023.73
  • Time to payoff: 14 years, 1 month
  • Total monthly payments: $1,152.57
After DMP enrollment:
  • Average negotiated interest rate: 11.28%
  • Total interest charges: $3,745.65
  • Time to payoff: 2 years, 9 months
  • Total monthly payment: $992.00
Time Saved

11 years, 4 months

Monthly Savings

$106.57

Interest Saved

$12,278.08

Case Study

Christopher from Palmer, AK

“The service has been great so far. Thanks! ”

Where he started:
  • Total unsecured debt: $24,111.00
  • Estimated interest charges: $13,201.86
  • Time to payoff: 12 years, 6 months
  • Total monthly payments: $964.44
After DMP enrollment:
  • Average negotiated interest rate: 7.93%
  • Total interest charges: $4,675.67
  • Time to payoff: 4 years, 6 months
  • Total monthly payment: $540.00
Time Saved

8 years

Monthly Savings

$424.44

Interest Saved

$8,526.19

Case Study

Lacey from North Pole, AK

“My husband and I only have 2 more payments and we’ll be debt free! Best decision ever! Thank you! ”

Where she started:
  • Total unsecured debt: $12,787.00
  • Estimated interest charges: $6,786.92
  • Time to payoff: 10 years, 9 months
  • Total monthly payments: $511.48
After DMP enrollment:
  • Average negotiated interest rate: 9.83%
  • Total interest charges: $3,128.92
  • Time to payoff: 3 years, 6 months
  • Total monthly payment: $367.00
Time Saved

7 years, 3 months

Monthly Savings

$144.48

Interest Saved

$3,658.00

Ready to see if Consolidated Credit can help you find debt relief, too? Get a free debt evaluation to find the best option to eliminate debt in your situation.