Delaware Debt Relief
16 MIN READ
Published April 07, 2023 | Updated May 04, 2023
Written by Christie Hudon
Edited by Wes Silver
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 US Constitution. It’s also known as the credit card capital as most of the credit card companies are located in the state and a business-friendly state because of its favorable tax policies. However, this second smallest state of America has its fair share of debts requiring debt relief solutions.
Delaware debt relief is a means of attaining a debt-free life through debt 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 information in Delaware.
Delaware: Economic Picture
The economy of the first state has a 5-year growth rate of 1.5% to $65.6 billion of GDP. The housing sector plays a key role in offering employment opportunities, though the 5-year growth rate showed a decline of 0.5% due to increased home values. The most valued employment industry in the state is finance, with a growth rate of 0.9%.
Delaware State may have a positive growth rate, but it’s still underperforming, with an average national 5-year growth rate of 3.7%, meaning that a lot of residents are struggling to maintain their daily routines resulting in debt accumulation.
How does Delaware debt relief work?
Delaware debt relief works by offering residents several key options to help alleviate the burden of debt and work towards living a debt-free life. There are several different ways that each available program can achieve this, such as by reducing loan interest rates, lowering monthly debt payments, wavering late payment fees, or forgiving debt.
By enrolling in a state-specific debt relief program, Delaware residents can tackle debt without forgoing their daily requirements, as flexible debt repayment terms align with each unique debt-to-income ratio.
Debt and finance statistics specific to the state
The following important 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
The average consumer debt in the state of Delaware grew by 1.8% to $102,063 from $100,282 in 2021. This growth is in line with the increased cost of living that has resulted in many consumers spending more than they earn, thus accumulating consumer debt.
Credit card debt
Residents of Delaware owe an average credit card debt of $5,762. This is an increase in credit card debt 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 jump in credit card debt across America.
Auto loan debt
In 2022, Americans owed a national auto loan debt of $1.41 trillion, a 6% year-to-year change from 2021. This is largely due to supply chain disruptions and the closing of car manufacturing companies at the height of the pandemic, resulting in high demand for cars and their skyrocketing prices.
Delawareans have also felt the impact of rising car prices resulting in an average auto loan debt of $20,374.
Mortgage debt
The homeownership rate in Delaware is 71.5%, and the median home value is $269,700. The median mortgage cost is $1,644, while the median gross rent is $1,199.
The average value for a home in Delaware was $350,102 as of February 2023, up 6.2% from the previous year.
Metropolitan areas like Millsboro, New Castle, Wilmington, and Dover have median home values of $346,174, $242,119, $283,910, and $289,960, respectively.
The state housing market was impacted by increased interest rates that drove home prices up as investors shied away.
Student loan debt
33.6% of people in Delaware have attained a bachelor’s degree or higher. Out of this, 123,000 0f them are student loan borrowers owing a total of $4.7 billion in federal student loans.
The average student debt loan in the state is $38,088. Universities like Delaware state university have come up with financial assistance programs and scholarships that try to control the burden of student debt loans on low-income students.
Household debt
In 2022, residents of Delaware experienced a moderately high household debt-to-income ratio of 1.601.
A household debt of 1.601 means that with a per capita income of $38,917, your household debt will be 1.601 multiplied by $38,917 to get a per capita household debt of $62,306.
Bankruptcy
In 2020, during the peak of the pandemic, bankruptcy trends in Delaware were at their highest at 3,249 cases since 2013. 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 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 February of 2023, the unemployment rate sat at a high 4.6%, well above the national average of 3.6%. Leading employment sectors include healthcare, education, transport, and utilities.
Credit scores
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 saving culture.
Regardless of the lack of growth in the credit score, a FICO score of 714 is considered to be a good credit score for accessing lower-interest loans.
Identity theft
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%
The state also ranks 3rd in fraud and other reports, with a total of 7,982 fraud cases. The median fraud loss is $338, while the total is $5.7 million.
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 shop in Delaware.
Currently, the state has 20 banking institutions holding a total deposit of $1,277,541 million, up from $1,259,216 million in Q2 of 2022. The leading financial markets in the state are Philadelphia, Camden, and Wilmington, with 101 banking institutions and total deposits of $598,897 million.
Delaware is considered a tax-friendly state because of its favorable tax policy. Its residents pay the following taxes;
- A top individual tax rate of 6.60%
- A state and local tax burden of 10.3%
- A top corporate income tax rate of 8.7%
- A 0% state and local sales tax rate, 23 cents gasoline tax rate per gallon of gasoline, and a $2.10 cigarette tax rate per 20-pack of cigarettes.
- The property tax rate is 0.61% of the owner’s home value
The state also has several tax incentive programs, a zero tax policy on social security benefits, and a $12,500 exclusion for pension funds and 401k incomes.
How TurboDebt Helped Delaware Residents with Debt in 2022:
TurboDebt is a debt relief company that has managed to work with 438 Delaware clients in 2022. 167 of these customers 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 debt relief program offers residents relief from several top types of debt that we see Delaware struggle with. 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 and more;
Credit Card Debt
Although Delaware is the capital of credit cards and incentives, its residents don’t enjoy this with credit card debt. The interest rates are still high as in other parts of the country, and there’s a late payment fee on credit card debt that is past due on the payment. As such, this may result in accumulating credit card debt that will take time to clear.
At TurboDebt, we are 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 off creditors.
Divorce Debt
Debt in Delaware is regarded as matrimonial property, meaning that it will be divided equitably among spouses when they divorce, regardless of who owns it. This results in you accumulating divorce debt if your ex-spouse had personal loans, thus putting you at the risk of dealing with debt collection agencies and possibly foreclosures.
Through our own program or other local credit counselors, we can help you deal with divorce debt by taking you through the right tailored program. We can also provide resources on the fair debt collection practices act that lenders must comply with and get you started with the best debt relief program based on your DTI.
Business Debt
Many business also enjoy doing business and incorporating in Delaware because of its low tax burden and privacy.
Not all businesses stand to benefit from the tax loopholes in Delaware; small businesses may end up accumulating business debt due to an out-of-state business tax.
Another shortcoming for small businesses incorporated in Delaware but doing business elsewhere is the cost of navigating the tax loopholes in the state. They require you to hire a local team, especially for legal disputes resulting in additional costs of doing business.
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.
Medical Debt
6.5% of the residents in Delaware are uninsured. This exposes residents to the risk of accumulating medical debt whenever they face medical complications or are in need of urgent medical care.
With medical debt being one of the most common forms of debt we enroll in our program, we are well versed on how to help with a unique debt relief option for each individual. Get in touch to see how much we can save you today.
Homeowner Debt
The recent high unemployment rates have led to an increase in mortgage delinquency rates as residents had no means of income to pay for their mortgages. The appreciating interest rates on loans and mortgages have made this financial situation worse, resulting in homeowner debt and possible foreclosures.
Retirement Debt
Retirement life in Delaware is bound to be easy since you won’t be paying for a state and local sales tax rate and social security benefits tax. However, with a monthly average assisted living cost of $5,745, you might accumulate retirement debt to make ends meet.
Delaware debt relief options
The following debt relief options are available to borrowers of Delaware depending on their creditworthiness, credit score, debt-to-income ratio, and type of debt.
Debt management programs
Debt management programs (DMPs) work by eliminating unsecured debt like credit card debts by reducing their interest rates to 8%. Non-profit credit counseling agencies offer this debt relief option, and borrowers are expected to make consistent monthly payments for around 3 to 5 years.
DMPs work best by considering your debt-to-income (DTI) ratio when calculating the monthly payments. Debtors must agree to the DMP for it to work.
Debt consolidation loans
Debt consolidation loans work by rolling your existing loans to one and paying them off with a higher loan. This debt relief option offers you a debt negotiation chance of reducing interest rates by accessing lower-interest loans to pay high-interest loans, lowering monthly payments to one, and avoiding interest rates and late payment fees due to rollovers.
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 as they may lead to high-interest fees.
Debt settlement
Debt settlement plans entail a partial debt cancellation of your debt balance. For it to work, borrowers must present a lump sum payment to their creditors for them to agree to a debt settlement plan.
When you’re pursuing a debt settlement plan, consider the credibility of the debt settlement company through Trustpilot, Google, and other verified sources.
Credit counseling
Credit counseling agencies work with qualified credit counselors to negotiate for a reduced interest rate and waiver of late payment fees in managing consumer debt. This program will also teach you about money and debt management, budgeting for your income, and choosing a debt management plan based on your DTI ratio.
You’re eligible for a credit report by choosing this debt relief option.
Bankruptcy
Bankruptcy offers consumers a clean plate from debt, depending on the type of bankruptcy. Chapter 7 bankruptcies work best on unsecured debts, which are settled by liquidating your nonexempt properties like a second home to clear of debt.
Chapter 11 bankruptcies are for businesses that are deep into debt. They help companies reorganize their debt payment plan without affecting their business operations.
Lastly, chapter 13 bankruptcies are for businesses or residents with consistent monthly incomes that can sustain debt payments. They work by selecting and sticking to a payment plan so that your nonexempt properties aren’t liquidated.
Consult with a reputable law firm for legal advice on the type of bankruptcy to file, as they’ll remain in your credit report for 7 to 10 years, denting your creditworthiness.
Debt forgiveness
Debt forgiveness programs are debt relief programs funded by the state government or national gov to cancel your entire debt balance. For you to qualify for debt forgiveness, you must satisfy the requirements of the available debt forgiveness program.
Existing debt forgiveness programs include the following;
- Teacher loan forgiveness
- Federal loan student loan forgiveness
- Public service loan forgiveness
Debt and Financial Hardship
Low-income families or individuals, homeless residents, the elderly, and physically challenged individuals can access the following debt and financial hardship resources to meet their basic requirements.
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.
The TANF is Delaware’s main cash assistance fund for low-income jobless residents looking for jobs. 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 has the following Medical assistance programs;
Child care
Child Care Services are eligible for kids under 13 years and whose family income is below the Federal Poverty Income. Kids with special needs and above 13 years 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 experiencing foreclosures.
You’re advised to call the home shelter to confirm the availability of beds before visiting the home shelter.
Free transportation services
A medical Transportation service provides eligible members with emergency and non-emergency medical transportation services.
DART First State runs free bus rides for blind residents and other people with disability.
Conclusion
Debt relief programs are an excellent way of achieving a debt-free life with minimal hustle. You’ll enjoy the debt payment since you know interest rates are lower, monthly payments are affordable, and debt management is simplified to a single low monthly payment.
TurboDebt is your reputable debt relief company that has thousands of 5-star reviews across Trustpilot and Google. If you’re going another route, always be sure to do your due diligence when pursuing debt relief so you can choose a legitimate company and avoid any scams.