Delaware Debt Relief
18 MIN READ
Published April 07, 2023 | Updated November 10, 2023
In a Nutshell
When you’re searching for debt relief in Delaware, it’s important to know your options. Whether you’re looking to tackle credit card debt, medical debt, payday loans, or more, TurboDebt can help you identify the best course of action.
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. It's 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 requiring solutions.
Delaware debt relief is a means of attaining a debt-free life through consolidation, settlement, or a combination of lower interest rates, affordable monthly payments, and a waiver of late payment fees. Take advantage of our free consultation, and read below to get the full picture of debt relief options and financial hardship assistance in Delaware.
Delaware's Economic Picture
The First State has had a 5-year economic growth rate of 1.5%, pushing the state’s GDP up to $65.6 billion in 2022. The housing sector plays a key role in offering employment opportunities due to increased home values and the need for new housing across the state.
Not surprisingly, the largest contributor to employment in the state is banking and finance, which experienced a growth rate of 2.2% in September of 2023.
“Small businesses in Delaware contribute significantly to the state’s economy, and they represent a significant share of the state’s jobs 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.
How Does Delaware Debt Relief Work?
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. Programs help you achieve this by reducing loan interest rates, lowering monthly debt payments, waiving late payment fees, or in certain qualifying circumstances, forgiving debt.
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 Debt and Finance Statistics
The following significant debt and finance statistics are specific to the state of Delaware:
- The average consumer debt in the state of Delaware grew by 1.8% to $102,063
- Residents of Delaware owe an average credit card debt of $5,762
- The average auto loan debt is $5,440
- The median mortgage cost is $1,644, while the median gross rent is $1,199
- The median home value is $269,700
- The median household income in the state of Delaware is $68,687, down from $73,292 in 2020. The per capita income is $38,917
- The average credit score in Delaware is 714
Average Consumer Debt
In 2022, average consumer debt in the state of Delaware grew by 1.8% to $102,063 from $100,282 the previous year. This growth is in line with the increased cost of living that has resulted in many consumers spending more than they earn, causing residents to accumulate more consumer debt over time.
Credit Card Debt
Residents of Delaware owe an average credit card debt of $5,762. This is an increase from $5,357 in 2021, where credit card debt dropped by -1.5% from the previous year. Such an increase in credit card debt can be attributed to the overall increase in Inflation across America.
Auto Loan Debt
In 2022, Americans owed a collective auto loan debt of $1.41 trillion, a 6% year-to-year increase from 2021. This is largely due to supply chain disruptions and the temporary closing of car manufacturing facilities at the height of the pandemic, resulting in high demand for used cars and skyrocketing prices for vehicles of all kinds, new or used.
As a result, Delawareans have felt the direct impact of rising car prices resulting in an average auto loan debt of $20,374 in 2022.
The average value for a home in Delaware was $375,412 as of May 2023, up 6.2% from the previous year.
Delaware's homeowner rate sits at 71.5%, with a median mortgage principal and interest payment of $1,644 per month and a median gross rent of $1,199 per month.
Metropolitan areas like Millsboro, New Castle, and Wilmington have median home values of $370,773, $258,327, and $302,174, respectively. Like much of the country, the state's housing market was impacted by increased interest rates that drove home prices up as investors shied away.
Student Loan Debt
In Delaware, 33.6% of residents have attained a bachelor’s degree or higher. Out of this, 123,000 of them are student loan borrowers owing a total of $4.7 billion in federal student loans.
The average student loan in the First State is $38,088. Universities like Delaware State offer financial assistance programs and scholarships that try to alleviate the financial burden of education and offer some student debt relief, particularly for low-income students.
In 2022, residents of Delaware experienced a moderately high household debt-to-income ratio of 1.60. This means residents owe significantly more (1.60 dollars) than every dollar they make.
In 2020, during the peak of the pandemic, bankruptcy trends in Delaware were at their highest since 2013, at 3,249 cases. This figure has declined to 1,430 bankruptcy cases filed in 2022, with Chapter 7 cases leading at 625, then Chapter 13 cases at 404, followed by Chapter 11 cases at 384, and other bankruptcies accounting for just 17 cases.
Average Income and Employment
The median household income in the state of Delaware is $72,724, with a per capita income of $38,917.
As of May 2023, the unemployment rate sat at a high of 4.2%, well above the national average of 3.7%. Leading employment sectors in Delaware include healthcare, education, transport, and utilities.
In 2022, the average credit score in Delaware was 714, which is unchanged from the previous year. The lack of growth in credit scores can be linked to increased credit card utilization rates due to high consumer demand and increased inflation, thus limiting the ability of consumers to increase their savings.
Regardless of the lack of growth, a FICO score of 714 is considered a "good" credit score and is typically effective for accessing lower-interest loans from most large lenders.
Delaware ranks 7th in identity theft with 2,188 filed identity theft reports. The top types of identity thefts include the following;
- Credit card fraud at 38%
- Other identity theft at 27%
- Phone or utility fraud at 21%
- Loan or lease fraud at 16%
- Bank fraud at 14%
Banking and Tax Info
It’s no secret that Delaware is home to most credit card companies thanks to The Financial Center Development Act that incentivized major banks to set up shop in Delaware.
Currently, the state has 20 banking institutions holding a total deposit of $1.277 trillion, up from $1.259 trillion in Q2 of 2022. The leading financial markets in the state are Camden and Wilmington, with 101 banking institutions and total deposits of $598.89 billion.
Delaware is considered a tax-friendly state because of its favorable tax policy. Its residents pay the following taxes:
- Top individual income tax rate of 6.60%
- State and local tax burden of 10.3%
- Top corporate income tax rate of 8.7%
- Gasoline tax of 23 cents per gallon
- Tobacco tax of $2.10 per 20-pack of cigarettes.
- Property tax rate of 0.61% of a property’s assessed value
Delaware also has several income tax incentive programs, such as a zero tax policy on social security benefits at the state level and a $12,500 initial income exclusion for pension funds and 401k incomes.
How TurboDebt Helped Delaware Residents with Debt in 2022
TurboDebt worked with 438 clients from the First State in 2022. Of these, 167 enrolled in our debt relief program, with an average enrolled debt of $22,606. This led to a total enrolled debt of $3,775,285 in the state.
Top Types of Debt to Get Relief from in Delaware
TurboDebt’s programs offer relief from several top types of debt that burden Delaware residents. With customized debt relief options, Delawareans can benefit from working with us as they continue their journey to pay off unsecured debts. Our debt relief program covers 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.
At TurboDebt, we're passionate about helping you pay down your credit card debts, payday loans, and other unsecured credit lines. We can go over all of the best options available to you, which may include debt management plans that will help you clear credit card debt with consistent monthly payments to a savings account, which will be used to pay creditors.
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. TurboDebt can help you deal with indebtedness after a divorce by matching you with the right financial solution. We can also get you started with the best debt relief program based on your unique financial situation.
Many businesses are incorporated in Delaware because of its low tax burden and its strict privacy laws. However, not all businesses stand to benefit from the liberal tax and legal provisions in Delaware.
At TurboDebt, we help you tackle your business debt through a debt settlement plan. This debt relief option allows for a lump sum payment of your business debt and forgiveness of up to 50% of the total debt balance. This can be a great option to avoid liquidation to pay off 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.
Medical debt is one of the most common forms of debt we enroll in our program, and we're equipped to offer a unique debt relief option for each individual. Get in touch to see how much we can save you today.
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.
Owning a property can also land you in debt from substantial repairs and maintenance. Don't let your outstanding balances make homeownership a burden. Contact our experts at TurboDebt to take advantage of our advising, strategic planning, and debt relief opportunities.
Retirement life in Delaware is bound to be easy since you won’t be paying for a state and local sales tax for 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.
At TurboDebt, we can help you make a plan to pay off your retirement debt, even while living on a fixed income.
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:
Debt Management Programs
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 Loans
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 and avoiding 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, as the longer repayment period may lead to a higher amount of interest paid over a longer repayment period.
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.
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 your income, and choosing a debt management plan based on your 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.
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 your nonexempt properties, like a second home, or your automobile(s), to help clear your debt.
Chapter 11 bankruptcies are for businesses that are deep into 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 with 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 programs are typically funded by the state government or national government and are used to cancel most, if not your entire 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 US Military service members
- Other public service related loan forgiveness
- HUD mortgage assistance
Debt and Financial Hardship
Low-income families or individuals, homeless residents, the elderly, and disabled individuals can access the following debt and financial hardship resources 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 looking for work. 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 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 home shelter to confirm the availability of beds 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 thousands of 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. Learn more about TurboDebt's options today with a free consultation.