Colorado Debt Relief Programs in 2025

Your Options To Get Out of Debt in Colorado

For many Colorado residents, unpaid debts are a big hurdle to living financially free. The inflated costs of goods and services make it harder for Coloradans to save any portion of their income, leading them to charge more on credit cards to meet monthly expenses.

Colorado ranks 11th in the nation for the average amount of credit card debt individuals carry, making debt relief options essential for many citizens of the Centennial State.

“Even with the favorable tax structure in the state, the cost of living in Colorado is what often causes people to fall into debt,” says Brad Reichert, a debt expert and the founder and managing director of Reichert Asset Management LLC.

“It’s critical to establish a budget that’s appropriate for your income so you keep from overspending on things that are unnecessary or outside of your budget,” Reichert adds.

Situations like this suggest that debt relief is a powerful tool for Coloradans to overcome large balances.

Here’s a breakdown of the top ways Centennial State residents can get out of debt:

Credit Counseling

How It Works

Coloradans have access to free or low-cost credit counseling services offered by both nonprofit and for-profit organizations, providing valuable guidance on managing significant debt challenges.

Colorado’s Office of Financial Empowerment aims to expand access to free financial counseling for residents experiencing financial hardship.

• Cost
  Credit counseling services cost a nominal fee or are even free for some residents.
• Stats
  While credit counseling is a viable option for planning to relieve debts, more U.S. citizens opted to settle debt in the past decade.
• Resources
  The Financial Counseling Association of America offers services to help you find a counselor, plus resources for financial education and consumer awareness.

Debt Management

How It Works

Many credit counseling agencies that work with Colorado residents offer debt management plans (DMPs) that help clients pay off several outstanding balances quickly and easily.

Debt management services fall under regulations from the Colorado Uniform Debt Management Services Act (DMSA), ensuring fair business practices for indebted consumers.

• Cost
  In Colorado, credit counseling organizations overseeing a debt management plan may charge an enrollment fee of $50.00 plus a monthly fee of $10.00 times the number of debts on the plan, but not exceeding $50.00.
• Stats
  Colorado residents hold more consumer debt than most other states, with an average of $90,760.
• Resources
  Colorado’s Office of the Attorney General provides general guidelines for consumers pursuing debt management and other services.

Debt Consolidation

How It Works

Colorado residents with multiple debts sometimes opt for a new consolidation loan large enough to pay off credit card balances at once, leaving them with a single monthly payment.

Because Colorado’s average credit score is a healthy 720, many borrowers may qualify for better interest rates on a debt consolidation loan or balance transfer card, which can make this strategy more effective for paying off debt.

• Cost
  Depending on your credit score and loan length, you could pay an interest rate of up to 21% on the total amount of your new consolidation loan. It’s always best to secure the lowest interest rate possible to make this method worthwhile for paying off your existing debts.
• Stats
  The state’s average credit utilization ratio is about 35%, slightly above the ideal 30% or less, which is a sign that it may be time to start paying down revolving balances more aggressively.
• Resources
  Learn more about debt consolidation from the TurboDebt® resource library.

Debt Settlement

How It Works

Debt settlement is an effective solution for residents with tens of thousands of dollars in credit card debt or other balances from unsecured debts like medical bills and personal loans.

Coloradans can settle debt by contacting creditors on their own or using a debt settlement company to negotiate the best offer to close out their account and mark it paid (or “settled”) in full.

• Cost
  Legitimate debt settlement organizations only charge fees for negotiating your debt and administering a savings account after you’ve charged off what you owe to creditors. At that point, you’ll typically pay a 15-25% fee based on the total amount of debt you enrolled.
• Stats
  In Colorado, consumers carried an average credit card balance of $7,267 in 2024. For borrowers who are already behind on payments, debt settlement may help reduce these high-interest balances and create a clearer path out of debt.
• Resources
  The American Association for Debt Resolution offers resources for Colorado residents to learn more about the settlement process.

Bankruptcy

How It Works

For some Coloradans, bankruptcy can be a last resort for eliminating debts after other debt relief strategies have failed.

Bankruptcy proceedings for Colorado residents must be completed through the U.S. Bankruptcy Court’s District of Colorado, located in Denver. You may have the opportunity to e-file documents through the court’s website.

• Cost
  Colorado’s bankruptcy court charges various fees based on how you file and the types of documents and court proceedings required by your financial situation.
• Stats
  In 2024, a total of 7,496 Colorado residents filed for bankruptcy (PDF).
• Resources
  The U.S. Bankruptcy Court offers consumers information about the process of bankruptcy.

What You Need To Know About Debt in Colorado

Coloradans are no strangers to debt and often need assistance to get out of it. Through various consumer protection initiatives, the state helps residents stay on top of scams and fraud.

Colorado’s Consumer Protection Act empowers the Attorney General’s office to use the tools they need to crack down on unfair business practices.

Many other programs provide resources and monetary help for Colorado residents in need, including those below:

Statute of Limitations on Debt in Colorado

A statute of limitations on debt sets boundaries on how long a creditor has to collect on debts or pursue legal action to collect an unpaid balance. Each state sets its own unique limits based on legislation for consumer protection and the type of debt in question.

Here’s a look at Colorado’s statutes:

Statute of Limitations on Medical Debt in Colorado

With 12% of Coloradans in collections for medical debt, the statute of limitations becomes important. Current medical debt collections have a six-year statute of limitations.

Credit Card Forgiveness in Colorado

Credit card debt forgiveness is rare and happens for a select few reasons, including bankruptcy.

However, Coloradans who’ve worked in public service roles may qualify for Public Service Loan Forgiveness through the federal government.

Student Loan Forgiveness in Colorado

Colorado’s legislature recently created the position of Student Loan Ombudsperson to advocate for student loan borrowers.

Through the support of the Attorney General’s Office, Colorado canceled or refunded student loans for 31,553 borrowers said to be defrauded by certain higher learning institutions.

Resources for Financial Assistance in Colorado

Colorado’s PEAK portal gives residents access to apply for or manage cash, medical, SNAP, and other benefits from the state. PEAK also connects residents to the following financial assistance programs in Colorado:

• RTD LiVE: This transit assistance program offers discounted rides for the rail, RTD bus, or Access-a-Ride service.
• LEAP: The Low-Income Energy Assistance Program provides cash assistance to heat low-income households from November through April.
• Early Childhood Assistance Programs: PEAK connects residents with young children to benefits from WIC, the Colorado Child Care Assistance Program, and the Nurse-Family Partnership program.

For help after a job loss, file a claim for unemployment benefits through Colorado’s Department of Labor and Employment.

Government Debt Relief Programs in Colorado

While the government doesn’t offer any specific programs for debt relief, it may provide financial assistance in other ways, such as a Colorado stimulus check or tax relief for qualifying citizens at certain times.

Get Professional Help Paying Off Your Debt

While Colorado provides multiple benefits, debt relief programs, and resources for residents facing difficulties, eliminating large unsecured debt balances can prove challenging.

Debt relief organizations like TurboDebt® offer Coloradans professional help to end debts and get a fresh financial start.

At TurboDebt, we prioritize listening to our clients to better understand their financial situation and create a customized and affordable plan to escape debt for good.

Here are a few more reasons why Coloradans can benefit from services offered by TurboDebt:

• Thousands of positive TurboDebt reviews on Trustpilot and Google
• Faster process to end debt
• Savings of up to 54% off your total debt
• Over $34 million in total debt already enrolled throughout the state
• Educational resources to help you become a savvy consumer

Contact TurboDebt today for a free consultation. It only takes a few minutes to begin your journey to financial freedom.