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New York Debt Relief Guide

In 2021 New York was at the forefront of COVID-19, and lockdowns continue to hurt the local economy. Retail and restaurant sectors were hit the worst but are slowly recovering. One out of ten payroll jobs were in retail before the pandemic, and about 40% of restaurant jobs were lost during the height of the pandemic.

New Yorkers have challenges as they return to work, especially in the hard-hit retail and restaurant industries. But if COVID can be kept at bay, higher employment numbers are sure to follow. The average debt-to-income stands at 93 percent, according to the latest Federal Reserve Data. That means that the average New York resident owes $0.93 in debt for every dollar they earn.

“Conditions in New York, especially New York City, are getting better. But working from home has really hurt small businesses, and despite higher unemployment numbers, there is also a shortage of qualified employees,” says Gary Herman, President of Consolidated Credit. He continues, “Housing and rent increases statewide have put residents in difficult situations, and new home buyers are getting priced out; additionally, due to reduced hours and layoffs, many have increased their debt level during the pandemic.”

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

Consumer debt in New York

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

In 2020, 20,566 New Yorkers filed for bankruptcy.

Income and employment in New York

New York is not a right-to-work state, which means union dues are mandatory as a condition of employment. That’s even the case if the worker is not a part of the union. The state job market, especially New York City, is very competitive, but year-over-year job openings have declined by almost 18% in NYC. Unemployment in New York is 7.70%.

Pay rates are much higher in New York, with an average median household income of $68,486, and a per capita income of $75,548

In New York, if you’re unemployed, you can receive unemployment from the state of New York.  The Pandemic Unemployment Assistance program (PUA) and other federal unemployment programs ended as of Sept 4, 2021.

New York recently passed a bill that helps underemployed individuals who previously worked full-time but lost their jobs during the pandemic and are now only back to part-time work. In the past, unemployment was severely cut for those who went back to work part-time, but rules have since been revised, so workers do not experience a deep income cut when they return to work. Minimum wages in New York are high, with a $15 minimum wage in New York City.

With a relatively high unemployment rate and expensive living costs, making it in New York isn’t easy. If you’re in this situation, take steps to prioritize your bills and keep debt minimized.

Apply for unemployment benefits in New York »

Banking and taxes in New York

New Yorkers have a state income tax that ranges from 4-8.2% and state sales tax of 4%. New York City sales taxes are also 4% for a minimum combined sales tax rate of 8%. There are also local income taxes, such as the one in New York City, starting at 3.078%. The average sales tax rate in New York (including local taxes) runs about 8.229%. Unlike many other states, New York does not have any tax-free holidays or periods.

New York residents are slightly more likely to bank than the average American. The percentage of unbanked residents—those without a checking or savings account stands at just 5.6%.

New York housing market

The housing market in New York City has always been competitive, but outside the metro area, housing is typically more affordable and plentiful. Due to home pricing going up dramatically due to the pandemic, New York properties, both in and outside of the New York City metropolitan area, are commanding premiums well above market value. Affordability, which has always been a problem in New York City, has plummeted.

Just outside of Albany, New York, Bethlehem is one of the best places for first-time homebuyers.

New York does have a homestead exemption which can range from $75,000 to $150,000 per person. The amount is doubled for couples who are married.

  • 53.9% of NY residents are homeowners
  • Median mortgage payment: $2,114
  • Median rent payment: $1,280

New York does have an emergency rental assistance program if you are facing difficulties making rental payments. Additionally, New York has assistance for those having problems with their mortgage.

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

Retirement in New York

New York has the reputation of “If you can make it here, you can make it anywhere.” But that doesn’t apply to staying there. Retirees are moving out in record numbers, as are many other citizens. The reasons for the move include taxes, crime rates, and weather. New York ranks seventh for states with the highest income tax rate and sixth for highest crime rate.

Retiring in New York is expensive. You’ll need an average of $1,400,000 to retire comfortably, but the average retirement savings is only $362,468. Other states offer a much lower tax structure, less expensive housing, and a better climate. The average New Yorker retires at age 64, leaving plenty of time to enjoy life. About 21% of retirees rely upon Social Security for at least 90% of their income.

Average New York insurance premiums

New Yorkers have reasonable rates when they need to protect their homes and vehicles but more expensive health insurance. New York is a no-fault state for auto insurance. The average driver has an auto insurance premium of $1,163 per year.

Homeowner’s insurance rates are reasonable as well; the average New Yorker’s homeowner’s insurance premium is $1,262 per year.

Health insurance premiums are high compared to national averages. The annual health insurance premium in New York is $8,413.

Helpful resources for New Yorkers facing hardship

Food insecurity

City/RegionFood BankPhone NumberAddress
Capital RegionRegional Food Bank of Northeastern New York(518) 786-3691965 Albany Shaker Rd., Latham, NY 12110
Finger Lakes RegionFood Bank of Central New York(315) 437-18997066 Interstate Island Road, Syracuse, NY 13209
Long IslandLong Island Cares, Inc.(631) 582-366310 Davids Drive, Hauppauge, NY 11788
Long IslandIsland Harvest(516) 294-8528126 Spagnoli Road, Melville, NY 11747
New Jersey MetroCommunity FoodBank of New Jersey(908) 355-366331 Evans Terminal, Hillside, NJ 07205
New Jersey MetroMercer Street Friends Food Bank(609) 406-0503824 Silvia Street, Ewing, NJ 08628
New Jersey MetroNORWESCAP Food Bank(908) 454-4322201 N. Broad Street, Phillipsburg, NJ 08865
New York CityCity Harvest(646) 412-06006 East 32nd Street, 5th Fl., New York, NY 10016
New York CityFood Bank For New York City(718) 991-4300355 Food Center Dr., New York, NY 10474
New York MetroFeeding Westchester(914) 923-1100200 Clearbrook Road, Elmsford, NY 10523
Southern New YorkFood Bank of the Southern Tier(716) 852-1305388 Upper Oakwood Avenue, Elmira, NY 14903
Western New YorkFeedMore Western New York, Inc.(716) 852-130591 Holt Street, Buffalo, NY 14206
Western New YorkFoodlink, Inc.(585) 328 33801999 Mt. Read Boulevard, Rochester, NY 14615

Veterans

As of 2019, New York was home to 705,924 Veterans. These resources are available to help Veterans that are facing unemployment, homelessness, and other hardships.

New York Department of Veterans’ Affairs
National crisis hotline: (800) 273-8255

Find Veterans’ services in your area »

Helpful employment resources for Veterans:

How Consolidated Credit helps New Yorkers find debt relief

In 2021, Consolidated Credit provided free credit counseling to 13,495 New York residents. Of those, 816 went on to consolidate their debt with our help through a debt management program (the average amount of debt enrolled was $11,134). 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 778 New York residents that got debt-free last year with the help of Consolidated Credit!

Relief options to consider if you’re in debt in New York

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 New York State residents with high debt and a good credit score.

New York 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 New York residents with counseling programs that identify the best way to get out of debt after considering their situations. New York 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 New York, 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 New Yorkers can get out of debt in 36-60 payments, on average.

Another option for New York 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 New York 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 New York. If you’re facing challenges with debt, call us at (844) 276-1544 to receive a free debt and budget evaluation from a certified credit counselor.

New Yorkers trust us with their debt. Contact us today and we can help you find the right solution for your debt!

Case Study

Carole from Esperance, NY

“A close family member highly recommended your services, and now so would I. You helped to make going through an unpleasant financial situation less embarrassing. ”

Where she started:
  • Total unsecured debt: $16,500.00
  • Estimated interest charges: $9,141.04
  • Time to payoff: 11 years, 11 months
  • Total monthly payments: $660.00
After DMP enrollment:
  • Average negotiated interest rate: 9.33%
  • Total interest charges: $2,818.04
  • Time to payoff: 4 years, 3 months
  • Total monthly payment: $375.00
Time Saved

7 years, 8 months

Monthly Savings

$285.00

Interest Saved

$6,323.00

Case Study

Christopher from New York , NY

“Consolidated Credit helped me get out of debt fast. Their customer service reps are very friendly and understanding. Their debt management program is the best. ”

Where he started:
  • Total unsecured debt: $26,505.00
  • Estimated interest charges: $15,396.98
  • Time to payoff: 13 years, 10 months
  • Total monthly payments: $1,060.20
After DMP enrollment:
  • Average negotiated interest rate: 7.50%
  • Total interest charges: $4,592.62
  • Time to payoff: 4 years, 2 months
  • Total monthly payment: $607.00
Time Saved

9 years, 6 months

Monthly Savings

$677.48

Interest Saved

$16,901.60

Case Study

Kevin from Montgomery, NY

“I’ve been very satisfied with Consolidated Credit. The representatives are very professional every time I call. I would strongly recommend them to anyone with substantial debt. ”

Where he started:
  • Total unsecured debt: $12,385.00
  • Estimated interest charges: $6,798.39
  • Time to payoff: 11 years
  • Total monthly payments: $495.40
After DMP enrollment:
  • Average negotiated interest rate: 4.20%
  • Total interest charges: $667.44
  • Time to payoff: 2 years 6 months
  • Total monthly payment: $440.00
Time Saved

8 years, 6 months

Monthly Savings

$55.40

Interest Saved

$6,130.95

Ready to solve your problems with debt? Talk to a certified credit counselor for free to find the best way to get out of debt for you.