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Texas Debt Relief Guide

The second most populous state in the country, the “Lone Star State” continues to draw people in with its low cost of living and lack of income tax. But even with those benefits, Texans and the state itself were heavily affected by the pandemic. They’ve also been hit by major extreme weather events, from Hurricane Harvey that devastated Houston and the Gulf Coast, to the severe winter storm in early 2021 that knocked power out statewide for weeks.

All these challenges could be contributing to the fact that Texas comes ranks sixth for consumer credit card debt in the U.S. Texans carry an average credit card balance of $5,848.

“Texans enjoy a lot of freedoms that typically help them keep costs low, such as wide-ranging freedom of choice for utilities,” explains Gary Herman, President of Consolidated Credit. “But those same freedoms have resulted in sky-rocketing costs this year. It’s made it difficult for Texans to budget, and many were forced to rely on credit to get by, as a result.”

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

Consumer debt in Texas

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

In 2020, 26,141 Texans filed for bankruptcy compared to the previous year’s filing total of 35,069.

Income and employment in Texas

Texas has a per capita, or average per person, income of $54,841, which falls just a little short of the national average of $59,729. They have a median household income of $61,874. And their minimum wage is equal to the federal minimum wage of $7.25 per hour.

Since Texas is a right-to-work state, employees cannot be denied employment because of union membership or lack thereof. Additionally, employees cannot be forced to join or leave a union against their will. Employees are also not obligated to pay union dues. However, they are still allowed to enjoy the union benefits.

Furthermore, Texas is an employment-at-will state. This means that at any given moment and for any reason employment may be terminated. Consequently, neither the employer nor the employee guarantees they will uphold employment. Hence, they may also similarly terminate their relationship.

Throughout 2020, Texas maintained below average unemployment rates of around 6.5%. And by September 2021, that percentage dropped to 5.6%, which was 2.2 points below the national average.

Unemployment Benefits: 

  • Minimum per Week: $69
  • Maximum per Week: $521
  • Maximum availability of Benefits: 26 weeks

General Information about the Unemployment Insurance Program:
https://www.twc.texas.gov/jobseekers/eligibility-benefit-amounts  https://www.twc.texas.gov/jobseekers/unemployment-benefits-services

To file a UI claim online:
https://login.apps.twc.state.tx.us/UBS/changeLocale.do

To file a claim by telephone number:

Telephone Support for Unemployment Insurance: 

1-800-558-8321

1-800-939-6631

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

https://twc.texas.gov/news/unemployment-news

Job Centers:

https://www.careeronestop.org/LocalHelp/AmericanJobCenters/find-american-job-centers.aspx

Cost of living crisis in 2021

The winter storm plunged large swaths of Texas into subfreezing temperatures, overwhelming the state’s electricity infrastructure and causing major power outages. At the height of the crisis, about 4.5 million Texan homes and businesses were left without power. Even though Texas uses natural gases (50%), coal (20%), renewable resources (20%) and nuclear power (10%) sources, they still suffered. Since nearly half the total power generation capacity for the state’s main electric grid was offline, millions of Texans endured days without electricity.

Additionally, houses in Texas are generally built with insulation to combat heat rather than freezing cold. In other words, the homes and business buildings in Texas are not “winterized.” However, once investigations were launched against the Electric Reliability Council of Texas (ERCOT), the ERCOT CEO was fired because he neglected warnings about the damage a storm of that magnitude could do.

During the crisis, prices of gas soared to historic heights as utilities struggled to get gas to residential customers and electric companies struggled to secure fuel for their power plants. There were even points during the blackout when gas was traded for 150 times higher than it had been traded prior to the crisis.

In many cases, those costs were passed on to consumers, resulting in electric bills that were thousands of dollars in some cases. The main company responsible for those bills Griddy Energy was forced to declare bankruptcy. Part of their bankruptcy plan from the Texas Attorney General requires the company to forgive $29 million in unpaid electric bills.

Banking and taxes in Texas

Texas has no income tax rate. Texas imposes a state sales and use tax of 6.25%. Local jurisdictions (cities, counties, special purpose districts, and transit authorities) may impose up to 2% sales and use tax for a maximum combined tax rate of 8.25%. 

Banking is also fairly uncommon compared to most states. Residents without a checking or savings account represent 7.7% of the population.

Texas housing market

For many Texans, it has been frustrating trying to buy a home in a seller’s market. Dallas, for example, has seen the median home price jump by nearly 12.7% year-over-year to $445,998 as of November 2021.

Unsurprisingly, that means Dallas has a highly competitive housing market, with prices well above average state housing prices. Meanwhile, Austin has a median home listing price of $595,000, with homes spending an average of 34 days on the market.  Houston has a median home listing price of $379,900, with homes spending an average of 50 days.

Texas offers an unlimited homestead exemption. This allows a homeowner to protect 100% of the value of their primary residence.

  • 62% of Texans are homeowners
  • Median mortgage payment: $1,549
  • Median rent payment: $1,045

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

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

Retirement in Texas

Currently, the average Texan has $415,277 saved for retirement, which is about $349,000 less than what you would need to retire comfortably in the state. The average retiree would need to have about $765,000 saved to live comfortably in retirement. 

Though Texas’s warm climate generally draws people to the state, its 0% income tax rate ensures people think twice before considering retirement elsewhere. Still, one in four retirees rely on Social Security for at least 90% of their income. So, the fact that Social Security income is not taxed remains a huge draw to retiring in the state.

Average Texas insurance premiums

Texas, much like most states across the U.S., operates under a fault-based system when it comes to car accidents. For this reason, along with the average $1,710 yearly for auto insurance premiums, it is essential for injury and property damage that victims have proof of liability so they may be compensated for their losses.

On the other hand, average annual home insurance premiums are fairly high at $3,087. This places Texas in fourth place for highest home insurance premiums across the U.S. And when it comes to average health insurance premiums, expect to fork out no less than $5,900 annually.

Helpful resources for Texans facing hardship

Food Insecurity

City/RegionFood BankPhone NumberAddress
AbileneFood Bank of West Central Texas325-695-63115505 N 1st St, Abilene, TX 79603
AmarilloHigh Plains Food Bank806-374-8562815 S. Ross, Amarillo, TX 79120
[PO Box 31803]
AustinCentral Texas Food Bank512-282-21116500 Metropolis Drive, Austin, TX 78744
BastropBastrop County Emergency Food Pantry512-303-0033806 Fayette St, Bastrop, TX 78602
BeaumontSoutheast Texas Food Bank409-839-87773845 SML King Jr Pkwy, Beaumont, TX 77705
Corpus ChristiCoastal Bend Food Bank361-887-6291826 Krill Street, Corpus Christi, TX 78408
DallasNorth Texas Food Bank972-780-25314204 Dan Morton Dr. Dallas, TX 75236
DeSotoDeSoto Food Pantry, Inc.972-223-4050400 N. Hampton Rd, DeSoto, TX 75115
El PasoEl Pasoans Fighting Hunger915-298-03539541 Plaza Circle, El Paso, TX 79927
Fort WorthTarrant Area Food Bank817-857-71002600 Cullen, Ft. Worth, TX 76107
HoustonHouston Food Bank713-223-3700535 Portwall Street, Houston, TX 77029
LaredoSouth Texas Food Bank956-726-31202121 Jefferson St, Laredo, TX 78040
LubbockSouth Plains Food Bank806-763-30035605 MLK Blvd
Lubbock, Texas 79404
OdessaWest Texas Food Bank432-580-6333411 South Pagewood Avenue, Odessa, TX 79761
San AntonioSan Antonio Food Bank210-337-36635200 Enrique M Barrera Pkwy, San Antonio, TX 78227
TylerEast Texas Food Bank903-597-36633201 Robertson Road Tyler, TX 75701
WacoCaritas of Waco254-753-4593300 S.15th St.
Waco, TX 76701
Wichita FallsWichita Falls Area Food Bank940-766-23221230 Midwestern Pkwy, Wichita Falls, TX 76302

 

Veterans

As of 2019, Texas was home to 1,453,450 Veterans. These resources are available to help Veterans that are facing unemployment, homelessness, and other hardships.

https://www.tvc.texas.gov/

https://veterans.portal.texas.gov/

https://www.va.gov/directory/guide/state.asp

Helpful employment resources for Veterans:

How Consolidated Credit helps Texas residents find debt relief

In 2021, Consolidated Credit provided free credit counseling to 15,043 Texas residents. Of those, 697 went on to consolidate their debt with our help through a debt management program (the average amount of debt enrolled was $11,032). 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 642 Texas residents that got debt-free last year with the help of Consolidated Credit!

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

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 can refinance your debt at a low-interest rate and enjoy 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 Texas residents with high debt and a good credit score.

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

Another option for Texas 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 Texan 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 Texas. 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.

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

Jessica from Dallas, TX

“Everyone has been very helpful and informative. Thanks, Consolidated Credit! ”

Where she started:
  • Total unsecured debt: $8,251.00
  • Estimated interest charges: $4,455.58
  • Time to payoff: 10 years, 5 months
  • Total monthly payments: $334.12
After DMP enrollment:
  • Average negotiated interest rate: 2.22%
  • Total interest charges: $741.27
  • Time to payoff: 3 years, 10 months
  • Total monthly payment: $196.00
Time Saved

6 years, 7 months

Monthly Savings

$138.12

Interest Saved

$3,714.31

Case Study

Karee from El Paso, TX

“Paying off my debt has been simple and stress-free from the beginning. Everyone has been very helpful and supportive. I never thought I’d ever be out of debt but in less than a year I will achieve my goal! ”

Where she started:
  • Total unsecured debt: $15,698.00
  • Estimated interest charges: $8,912.28
  • Time to payoff: 11 years, 1 month
  • Total monthly payments: $627.92
After DMP enrollment:
  • Average negotiated interest rate: 5.73%
  • Total interest charges: $2,459.65
  • Time to payoff: 4 years, 10 months
  • Total monthly payment: $303.00
Time Saved

6 years, 3 months

Monthly Savings

$324.92

Interest Saved

$6,453.33

Case Study

Roxann from Wichita Falls, TX

“Consolidated Credit was the best thing I could have ever done. They were honest, caring and understanding with me. I have recommended them over and over to others. ”

Where she started:
  • Total unsecured debt: $28,957.00
  • Estimated interest charges: $16,445.78
  • Time to payoff: 15 years, 4 months
  • Total monthly payments: $1,176.32
After DMP enrollment:
  • Average negotiated interest rate: 10.35%
  • Total interest charges: $3,594.00
  • Time to payoff: 4 years 3 months
  • Total monthly payment: $627.00
Time Saved

11 years, 1 month

Monthly Savings

$549.32

Interest Saved

$12,851.78

Get the debt relief you need! Talk with one of our certified credit counselors today to get a free debt and budget evaluation and find out if you qualify for a debt relief program.