Indiana Debt Relief: What You Need to Know

In a Nutshell

Struggling with unpaid debts and finding it hard to achieve financial stability? For many Indiana residents, this is a familiar challenge. Rising living costs and essential services make saving difficult, pushing Hoosiers to rely more on credit cards for monthly expenses. As a result, many are turning to Indiana debt relief programs for help.

Did you know Indiana ranks among the top states for average credit card debt, with an average balance of $5,254 in 2023, according to CNBC? This underscores just how critical accessible debt relief options are for many in the Hoosier State.

“Indiana's living costs and economic pressures often lead residents into debt,” says John Smith, a financial advisor and CEO of Financial Freedom Services. “Creating a realistic budget based on your income is essential for managing your finances effectively,” Smith advises.

These financial pressures highlight the necessity of debt relief to help Hoosiers manage and overcome their debt. Curious about how Indiana residents can get assistance with their debts? Keep reading to explore the various Indiana debt relief programs available.

How Does Debt Relief Work in The Hoosier State?

Debt relief in Indiana, or the Hoosier State, typically involves debt settlement, consolidation, and credit counseling. Residents can negotiate with creditors to reduce their debt, consolidate multiple debts into one manageable payment, or work with credit counselors to develop a repayment plan.

According to Brad Reichert, founder and managing director of Reichert Asset Management LLC, the Fair Debt Collection Practices Act (FDCPA) plays an important role in protecting consumers. “This federal law ensures that debt collectors must adhere to ethical and legal standards when pursuing overdue payments or recovering assets,” Reichert explains. These protections include prohibiting harassment, false statements, and unfair practices, and offering peace of mind to those seeking debt relief.

Indiana Debt and Finance Statistics

The Hoosier state’s unemployment rate continued to hover below the national average credit card debt at 3.7% as of May 2024. While this figure is very encouraging, the effects of the COVID-19 pandemic and inflation are still leaving many Indiana residents with monthly payments on unsecured debt that they simply can't afford. Below, we've prepared an overview of the debt statistics many Hoosiers face.

• Average Consumer Debt: In 2023, the national average consumer debt per household was $79,349, reflecting a nearly 6% rise in debt from 2021 to 2022. This trend indicates an ongoing increase, making it harder for residents to pay off outstanding balances.
• Credit Card Debt: Indiana's average credit card debt per household was $4,847 in 2022, lower than the national average of $5,589. 
• Auto Loan Debt: In 2023, Indiana drivers carried an average of $23,792 in auto loan debt, a 5.2% increase from the previous year, highlighting the state's affinity for cars, SUVs, and trucks.
• Mortgage Debt: Indiana residents manage their mortgage debt well, with an average mortgage balance of $150,555 per household in 2022. This is significantly lower than the national average of $231,464, though owning a home also involves additional costs for repairs, replacements, and maintenance.
• Student Loan Debt: On average, Indiana college graduates owe $33,162 in federal student loans, slightly below the national average of $35,287.
• Medical Debt: Medical debt remains a significant financial burden, with around 20% of households carrying medical debt. Nationally, this amounts to about $88 billion.
• Retirement Debt: Approximately 30% of retirees have little to no retirement savings, which can significantly impact their financial stability on a fixed income. Nearly 37% of retirees report having no retirement savings at all as of 2023​.
• Divorce Debt: Debts incurred during divorce proceedings can compound financial strain. In Indiana, the average cost of divorce is approximately $9,000.

Debt Relief Programs Indiana: Case Study

In 2023, Indiana residents enrolled a total debt amount of $30,065,903, with an average credit card debt of $20,635 per client.

Does that amount of debt sound close to your financial situation? At TurboDebt, we helped 4,715 Indiana residents with their debt, with over 1,457 enrolling in our debt relief program, saving 55.18% on their repayments before fees.

From Indianapolis to Fort Wayne, TurboDebt provides effective debt relief services across the state of Indiana. With over 500,000 Americans already enrolled in our program, our dedicated team of experts is here to help Hoosiers tackle their financial challenges and work towards a debt-free future.

Top Types of Debt in Indiana

Credit Card Debt

Credit card debt is one of the top types of debt that we see people struggle with, but we know that there are debt relief options, including our services at TurboDebt.

Some residents struggle with making on-time payments, getting into a cycle of late fees and high interest rates that add more to their payback amount each month. Even paying the minimum balance can drag you deeper into credit card debt on time payments as you delay making larger payments and end up extending your payoff date.

Divorce Debt

On top of getting the right legal advice and dealing with the emotional trauma of a divorce, debts incurred during a divorce can quickly compound. The average Indiana resident spends about $9,000 on a divorce.

Business Debt

It's estimated that only 30% of a business’s capital should be tied up in debt to avoid the long-term financial burdens that often weigh on a business’ ongoing profitability. Too much debt will lower your business’s average credit score further, making you a liability in the eyes of your lenders.

Medical Debt

Despite recent federal-level changes as to how medical debt is reported to credit bureaus, it is still one of Americans' most financially crippling expenses. The Consumer Federal Protection Bureau estimates that 20% of households across the U.S. carry ongoing medical debts, with outstanding balances across all 50 states totaling approximately $88 billion.

Getting out of medical debt in Indiana may seem difficult, especially with normal living expenses in today’s economy.

Homeowner Debt

The American Dream of owning a home means that for many Americans, a mortgage is their most significant source of debt. In 2022, the average mortgage debt for Hoosiers was $150,555.

This includes those impacted by mortgage debt, costs related to extensive home repairs, and unexpected replacement and maintenance expenses.

Retirement Debt

Unfortunately, unsecured debt is still an issue for many Americans' financial health, even in retirement. Some 30% of retired Americans said they have little to no retirement savings in their bank accounts. Even on a fixed income, retired Hoosiers have options.

Options to Seek for Debt Relief in Indiana

Debt can feel overwhelming, but there are several avenues for relief available to Indiana residents. From debt management programs that consolidate payments to debt settlement options that negotiate lower amounts, understanding these choices is crucial for finding a sustainable financial path. Here’s a breakdown of the main options:

Debt Management Programs

Debt management programs consolidate all debts into one manageable monthly payment at a lower interest rate. This approach involves working with a credit counseling agency that negotiates with your creditors to reduce interest rates and fees.

Many Indiana residents clear their debt in under five years with a steady income. The program structures payments to align with your financial constraints, helping you manage your money more effectively and avoid missing payments.

Debt Consolidation Loans

A debt consolidation loan involves taking out a single, low-interest loan to eliminate high-interest credit card debts with lower monthly payments. This option requires a good credit score (typically 680 or higher) to qualify for favorable interest rates.

By consolidating multiple debts into one payment, you can potentially lower your overall interest rate and simplify your financial obligations. However, without good credit, you might end up with the same or higher interest rates, which could negate the benefits of consolidation.

Debt Settlement Program

Debt settlement allows Indiana residents to negotiate with creditors to settle debts for less than the owed amount. A reputable debt settlement company assists in creating a plan and negotiating with creditors on your behalf. You make monthly deposits into a designated savings account until you accumulate enough funds to pay off the negotiated amount.

While this option can significantly reduce the total debt, it may negatively impact your credit score since you stop making direct payments to creditors during the negotiation process. Despite the potential drawbacks, debt settlement offers an alternative to bankruptcy for those facing substantial debt.

Credit Counseling

Credit counseling guides you to improve your financial situation through a structured plan. Credit counselors work with you to create a debt management plan and offer advice on budgeting, money management, and avoiding future debt.

These programs, often provided by non-profit agencies, do not pay your bills for you but equip you with the tools and knowledge to handle your finances more effectively. Enrolling in credit counseling can help you develop a sustainable financial strategy and regain control over your debt.

Bankruptcy

Filing for Chapter 7 or Chapter 13 bankruptcy is considered a last resort for those with overwhelming debt. This legal process involves using the U.S. Bankruptcy Court system to determine repayment based on your financial situation. Chapter 7 bankruptcy may discharge most of your unsecured debts, while Chapter 13 involves a repayment plan over three to five years.

Bankruptcy can severely damage your credit score and remain on your credit report for up to 10 years, making it challenging to qualify for future loans or leases. It is essential to consult a legal professional to understand the implications fully.

Debt Forgiveness

Debt forgiveness occurs when a lender cancels all or part of a borrower’s debt under specific conditions. Government agencies often offer this option based on income or profession.

For example, public school teachers may qualify for student loan forgiveness after meeting criteria related to their years of service, type of educational institution, or location. Debt forgiveness programs are less common in the private sector but can provide significant relief for those who qualify.

Debt and Financial Hardship Resources

Debt and financial hardship resources, including state-run financial assistance programs, provide essential support for residents facing tough economic times. These initiatives offer aid like cash assistance, healthcare benefits, and food programs to help you get back on track.

And what about a stimulus check for Indiana? Well, there is no information currently about a new payment coming soon.

Finding Debt Relief in Indiana

You have many options when it comes to pursuing debt relief in Indiana. It’s important to find an accredited debt relief company with transparent reviews from actual clients. Thousands of 5-star TurboDebt reviews on Google and Trustpilot reveal how our clients received effective service from our expert team.

Get reliable help from professionals like TurboDebt. We’re here to help you find the right debt solution for your unique situation and get you back on the path to building wealth and living debt-free.