US residents have a total of almost $12 billion of outstanding debt. Of that $12 billion, almost $9 billion is housing-related debt. Just over $1 trillion is student loan debt, and just under $1 trillion is auto loan debt, followed by credit card debt at $660 billion. That makes for a total debt per capita in the country of just under $50,000. So, how does New Jersey stack up against this great big debt load?
New Jersey Consumers
The median household income in New Jersey in 2013 was $71,637. That’s one of the highest in the country, second only to Maryland. Contrast that with the US median income of $53,046. Your average New Jersey household earns over 1/3 more than your average household in the rest of the country. The unemployment rate in New Jersey is around 6.5%, slightly over the national rate of 6.3%. While New Jersey residents earn more than your average American, they also spend more. New Jersey has one of the highest costs of living of any state. New Jersey housing expensive are 2/3 more expensive than the US average and utilities expenses are 1/3 more expensive than average. New Jersey residents have slightly better financial health than the average US citizen – New Jersey has an average credit score of 708 while the average US score is 696.
Consumer Debt in New Jersey
The US has $11.4 trillion dollars of consumer debt outstanding. With a population of about 315 million, that makes for an average debt of $36,000. That’s almost half the average debt load in New Jersey. Between mortgage, student loans, credit cards, auto loans, and other consumer debts, New Jersey residents over 18 carry an average debt of about $63,000. That puts the Garden State at number 2 for debt per capita, behind only California.
Mortgage debt makes up the lion’s share of consumer debt in the US. It accounts for about 3/4 of the debt outstanding, dwarfing any other categories. New Jersey is no exception. On the contrary, New Jersey’s sky-high housing prices (even post-recession) puts it near the top of the list for mortgage indebtedness. About 2/3 of New Jersey residents own rather than rent, which is close to the national average. In 2013, the average property tax bill in New Jersey was about $8,000. The average outstanding balance on a mortgage in New Jersey is $236,000, with a monthly payment of more than $1200. Your average New Jersey homeowner will spend more than 1/5 of her annual income on her mortgage payments each year. Property taxes tack on another 10%.
With a bill like that, it’s easy to see how the financial crisis could drive New Jersey homeowners straight into delinquency. New Jersey has consistently been near the top of the list for states with the most delinquencies and foreclosures – the only state with more delinquent mortgages is Mississippi. As of this year, 12.6% of New Jersey borrowers are behind on their mortgage payments. About half of those are still considered delinquent and the other half is in foreclosure. The average delinquency length for a mortgage in New Jersey is 1276 days, compared to a national average of about 950 days. Part of the reason for the extra delay is that New Jersey is a judicial foreclosure state. All foreclosures must go through the court system, which slows the whole process down. New Jersey also has a high volume of foreclosures, backing up the courts and slowing things down further. Newark is the epicenter of New Jersey foreclosures; more than 11% of mortgages are in foreclosure in Essex County.
After mortgages, student loans are the largest debt category. In New Jersey, 65% of students have debt. The average outstanding balance is $29,287. That’s the 8th highest amount in the country. avg is $29,287; ranked 8 in the country for amount of debt. Student loans are a particularly troublesome type of debt. Student loans are generally not dischargeable in bankruptcy, so paying them is often the only way to get rid of them. Of course, recent graduates often struggle to find jobs with salaries that can cover their payments. The federal government does offer a variety of programs to help with repayment, but most of those programs extend the repayment period to 25 or 30 years. In other words, many students face laboring under the cloud of their student loans for decades.
Credit card debt is the third most common type of debt in New Jersey. About 70% of New Jersey residents over the age of 18 have at least one credit card. New Jersey credit card users have an average of $5,484 in credit card debt – that’s the sixth highest amount in the country. It’s also more than $500 over the US average of $4965. Unlike mortgage debt, credit card debt is unsecured. Unlike student loans, credit card debt is dischargeable in bankruptcy.
Debt in New Jersey
While your average New Jersey resident makes more money than the national average, she also has significantly more debt. With an extremely high cost of living, it’s all too easy to fall behind on those payments. If you’re struggling with debt, remember that you have options. You may be able to negotiate with your lender, work with a debt settlement company, or consolidate your debt. You may also consider filing for bankruptcy – 30,000 other New Jersey residents did so last year. Bankruptcy can stop creditors from calling and knocking at your door and stop the foreclosure process. Bankruptcy can help you avoid a lawsuit and even keep your home. If you’re struggling with debt in New Jersey, reach out to one of our experienced attorneys. In a free consultation, we’ll discuss your circumstances and help you find the solution that best fits your goals.