Delaware Debt Relief Programs in 2025

How Does Delaware Debt Relief Work?

Delaware is best known as the first state to ratify the U.S. Constitution. It’s also known as the credit card capital of the U.S., as most of the 25 largest credit card companies are located in the state.

The state is also a business-friendly state because of its favorable tax policies. However, citizens of the second-smallest state in America have their fair share of debts that require solutions.

Delaware debt relief offers residents several key options to help alleviate the burden of debt and let them work towards living a debt-free life.

Debt relief programs in Delaware are here to support you by lowering your loan interest rates and making your monthly payments more manageable. They can also help waive late payment fees or, in some cases, forgive part of your debt, giving you a fresh start and peace of mind.

By enrolling in a personalized debt relief program, Delaware residents can tackle debt without forgoing their financial needs, as flexible debt repayment terms align with each unique debt-to-income ratio (DTI).

Delaware's Economic Picture

 “Small businesses in Delaware contribute significantly to the state’s economy, and they represent a significant share of the state’s job statistics,” explains Brad Reichert, debt expert and founder and managing director of Reichert Asset Management LLC.

“For many Delaware citizens, owning a small business is an exciting and dependable way to provide for their families, acquire entrepreneurial skills, and increase their socio-economic status,” Reichert adds.

The First State has experienced unemployment levels similar to those of the rest of the nation, with an average of 3.9% in November 2024.

Delaware Debt and Finance Statistics

The following significant debt and finance statistics are specific to the state of Delaware:

Average Consumer Debt

According to Federal Reserve data, Delaware residents owe an average of $62,870 in consumer debt. This includes both secured and unsecured debts from mortgages, auto loans, student loans, and credit card balances.

Credit Card Debt

Residents of Delaware owe an average credit card debt of $7,598.

Mortgage Debt

The average value for a home in Delaware was $382,867 as of December 2024, up 2.3% from the previous year. Increasing home prices have driven mortgage debt higher in Delaware and across the nation.

Student Loan Debt

Delaware residents owe an average of $38,404 in student loans, with the majority of borrowers under the age of 35.

Household Debt

In 2024, Delaware residents experienced a moderately high household debt-to-income ratio of 1.583. This means residents owe about $1.58 for every dollar they make.

Bankruptcy

In 2024, a total of 2,752 First State residents filed for bankruptcy (PDF). This represented a 29% increase from the previous year.

Credit Scores

In 2024, the average credit score in Delaware was 705. A credit score of 705 is considered a “good” credit score and is typically effective for accessing lower-interest loans from most large lenders.

Top Types of Debt to Get Relief from in Delaware

Debt relief programs offer relief from several types of debt that burden Delaware residents. With customized options, Delawareans can continue their journey to pay off unsecured debts.

In general, debt relief options cover the following top types of debt:

Credit Card Debt

Although Delaware is the capital of credit cards and incentives, its residents still suffer from credit card debt. Interest rates on cards are still sky-high, like in other parts of the country, and late payment fees that apply to past-due accounts are also on the rise.

Clearing credit card debt can become a challenge if you don't break the cycle of making the minimum payments, or worse, making a late payment.

Divorce Debt

Debt is regarded as matrimonial property in Delaware. This means that a Delaware judge will determine how property will be divided equitably among spouses when they divorce, in what is believed to be a fair distribution, based on earnings ability and needs, regardless of who owns it.

This may result in you accumulating divorce debt if your ex-spouse had personal loans in both your names or if your names were both on a mortgage loan.

Divorce is hard enough without the threat of dealing with debt collection agencies and possible foreclosures.

Business Debt

Many businesses are incorporated in Delaware due to its low tax burden and stringent privacy laws. However, not all businesses stand to benefit from the liberal tax and legal provisions in Delaware.

Medical Debt

Delaware residents owe an average of $2,426 in medical bills, with 17.37% in collections. Many within the state are also uninsured. This exposes residents to the risk of accumulating medical debt whenever they face medical complications or are in need of urgent medical care.

Homeowner Debt

High unemployment rates during the COVID-19 pandemic have led to an increase in mortgage delinquency rates as residents had no means of income to pay for increased mortgage costs.

The rapidly rising interest rates on loans and mortgages have made this financial situation worse, resulting in delinquent homeowner debt and possible foreclosures.

Although debt relief doesn't apply to secured debts like mortgages, owning a property can also land you in unsecured debt from substantial repairs and maintenance.

Retirement Debt

Retirement life in Delaware is bound to be easy since you won’t be paying for a state and local sales tax on items you purchase or any income tax on Social Security benefits at the state level.

However, residents are expected to need over $700,000 to comfortably retire in the First State.

Delaware Debt Relief Options

The following debt relief options are available to Delaware borrowers depending on their creditworthiness, credit score, debt-to-income ratio, and type of debt:

Credit Counseling

Credit counseling agencies connect borrowers with qualified credit counselors. Programs from non-profit organizations and some private firms teach participants about money and debt management, budgeting for their income, and choosing a debt management plan based on their DTI ratio.

You’re also eligible to receive help in accessing a free copy of each of your three credit reports by picking this debt relief option.

Debt Management

Debt management programs (DMPs) help eliminate unsecured debt like credit card balances by reducing interest rates. Some debt relief organizations offer this option, and borrowers are expected to make consistent monthly payments for  3 to 5 years, on average.

DMPs work best by considering your debt-to-income (DTI) ratio when calculating the monthly payments. Both borrowers and creditors must agree to the DMP for it to work.

Debt Consolidation

Debt consolidation loans allow you to enroll your existing loans into one larger loan and pay it off, oftentimes at a lower interest rate. This debt relief option gives you the chance to reduce interest rates by effectively “refinancing” all of your smaller high-rate debts into one single lower-interest loan.

Once you’re approved, you use the proceeds from this new loan to pay off multiple high-interest accounts, thus reducing your various monthly payments to one. This avoids increasing interest rates and late payment fees due to missing a payment on one of these various accounts.

Delawareans with good credit scores stand to benefit the most from this debt relief option, but they should be aware of the extended monthly payments that come with the larger loan. The longer repayment period may result in a higher amount of interest paid over a longer period.

Debt Settlement

Debt settlement plans involve negotiating with creditors to reduce the total amount of what you owe, sometimes by up to 50%. You can complete negotiations on your own or work with an accredited debt settlement company that works with creditors on your behalf.

Once the negotiation is completed, you'll make affordable monthly payments into an account set up by the organization that handles your debt payoff.

When you’re pursuing a settlement plan, consider the credibility of the debt settlement company by checking reviews through Trustpilot, Google, and other verified sources. A reputable company won't ask for fees upfront to settle your debts and typically offers a free initial consultation to learn more about your financial situation.

Bankruptcy

Bankruptcy offers consumers a clean slate from debt, depending on the type of bankruptcy you file. Chapter 7 bankruptcy can be most effective for unsecured debts, which are settled by liquidating nonexempt properties, such as a second home or your automobile(s), to help clear your debt.

Chapter 11 bankruptcies are typically filed by businesses that are deeply in debt. They can often help companies reorganize their debt payment plan without affecting daily business operations.

Lastly, Chapter 13 bankruptcies are typically effective for businesses or residents with consistent monthly incomes that can sustain debt payments over a minimum amount of time. When you file for Chapter 13, you'll select and stick to a 3-5-year repayment plan to avoid liquidating nonexempt properties.

Consult a reputable law firm for legal advice on whether to consider bankruptcy as a solution, as the residual effects of bankruptcy will remain on your credit report for 7 to 10 years, lowering your creditworthiness during that entire time.

Debt Forgiveness

Debt forgiveness programs are typically funded by the state government or national government and are used to cancel most, if not all, of your debt balance. To qualify for debt forgiveness, you must satisfy the requirements of the available debt forgiveness program.

Existing debt forgiveness programs include the following;

• Student loan forgiveness for teachers who serve for a number of years in a high-demand area
• Federal student loan forgiveness for certain U.S. military service members
• Other public service-related loan forgiveness
• HUD mortgage assistance

Debt and Financial Hardship

Although there are no new stimulus checks for Delaware planned for the future, low-income families and individuals can access the following debt and financial assistance programs to meet their needs:

Temporary Assistance Programs

The General Assistance Program Fund is a state-run program for low-income residents who aren’t eligible for social security benefits and federally funded projects like the TANF.

The Refugee Cash Assistance program helps low-income, homeless, and asylum-seeking refugees with medical care, cash assistance, and social services.

Temporary Assistance for Needy Families (TANF) is Delaware’s main cash assistance fund for low-income, jobless residents seeking employment. The program lasts a maximum of 36 months, but you must complete 30 hours of work-related activity every week to qualify for the cash assistance.

State Health and Human Services

The state of Delaware offers the following medical assistance programs:

• Qualified Medicare Beneficiary Program: This pays for medical premiums and certain deductibles for families below the 100% poverty limit.
• Chronic Renal Disease Program: This program aids residents with end-stage renal disease living below the 300% federal poverty level.
• Delaware Healthy Children Program: This program provides affordable health insurance to uninsured kids.
• Delaware Prescription Assistance Program: This service is a health care program for the elderly and disabled that pays for their prescription medicines exceeding 40% of their income or if their income is 200% below the federal poverty level.
• Delaware Medicaid: This medical aid program is available to low-income families and qualifying residents who are aged or disabled.
• Long-Term Care Medicaid Programs: These programs offer long-term care services, including the cost of living in a nursing home.

Child Care

Child care services are offered for eligible kids under 13 years of age whose family income is below the federal poverty level. Kids with special needs above 13 years old can also qualify for the program.

Shelters for the Homeless

The state of Delaware operates several home shelters in a bid to eliminate homelessness and provide shelter to low-income families and residents without a place to live.

You’re advised to call the homeless shelter to confirm bed availability before visiting.

Free Transportation Services

Delaware's Medical Transportation Service provides eligible members with emergency and non-emergency medical transportation services. DART First State also runs free bus rides for blind residents and other people with disabilities.

Delaware Debt Relief Solutions with TurboDebt®

Debt relief programs are an effective way of achieving a debt-free life. Once you enroll in a program, you can relax knowing you have a plan for affordable monthly payments.

Regardless of the option you choose, be diligent when pursuing debt relief so you can choose a legitimate company and avoid any potential scams.

TurboDebt® is your reputable debt relief company with over 20,000 5-star reviews across Trustpilot and Google. Our plans are tailored to your unique financial needs and save our customers thousands of dollars before fees.

Explore TurboDebt's debt relief options with a free consultation—it's a perfect opportunity to learn more and see how we can assist you in achieving a debt-free life!