Turbo Takeaways
- Maryland residents have a median household income of $101,652, one of the highest in the U.S.
- Despite this, the state carries high levels of credit card debt and an elevated debt-to-income ratio, indicating rising financial strain.
- Debt relief programs can simplify repayment, lower interest rates, and help residents of the Old Line State regain stability.
Your Options To Get Out of Debt in Maryland
With its proximity to our nation’s capital and bustling urban centers like Annapolis and Baltimore, Maryland offers opportunities for both work and play. Old Line State residents enjoy one of the highest household incomes in the country.
However, along with all this wealth, consumer debt rises across the state, leaving many families in need of solutions to overcome financial difficulties. Read on to learn more about the ways you can find debt relief in Maryland.
Credit Counseling
For sound advice on how to overcome debt and manage your finances, a credit counseling program is a good place to start.
How It Works
Many credit counseling agencies offer services to Maryland residents seeking to initiate the debt relief process. Once you enroll in a nonprofit or private program, you’ll work one-on-one with a certified credit counselor.
Pros
- Provides expert advice and education to manage and reduce debt
- Helps review credit reports and improve financial habits
- Often available at low or no cost through nonprofit agencies
Cons
- Doesn’t directly erase debt balances
- Requires commitment to follow through on recommendations
- May include minor enrollment fees for ongoing services
Cost
Credit counseling is usually cost-effective and includes a small enrollment fee. Low-income Maryland residents may even qualify for reduced-cost or free services.
Stats
- At 1.968, Maryland residents have one of the highest debt-to-income ratios in the country, proving that debt relief options are becoming a necessity throughout the state.
Resources
Find a local credit counselor through the Financial Counseling Association of America.
Debt Management
Debt management programs handle the responsibility of making your monthly bill payments on time.
How It Works
After working with a certified credit counselor, some Marylanders opt to enroll their outstanding balances into a debt management program.
Under a Debt Management Plan (DMP), consumers make a single monthly payment to the DMP organization, which then distributes the payment to creditors on their behalf.
Pros
- Organizes debts into a single monthly payment
- Credit advisors may negotiate lower rates or waived fees
- Creates structure and accountability for consistent repayment
Cons
- Requires closing most credit accounts to avoid further spending
- Startup and monthly fees for each account the organization manages for you
- Missed payments can remove negotiated benefits
Cost
DMPs usually charge a startup fee ranging from $30 to $40. Monthly fees typically range from $30 to $50 for each active account enrolled in the program.
Stats
- Maryland residents carry an average consumer debt of $131,948, one of the highest in the country.
Resources
Learn more about debt management and how it can help you.
Debt Consolidation
Consolidating debt is a kind of DIY approach to paying off balances.
How It Works
Residents from the Old Line State can choose from two main options to consolidate debt. The first option is to open a new credit card account with a no-interest balance transfer promotion available for the first 12-18 months after opening the account. Next, you’ll transfer other outstanding small-to-medium-sized credit card balances to that account to save interest.
Another choice is to take out a debt consolidation loan that is large enough to pay off your current unsecured debts. This method works best for Maryland consumers with fair to good credit scores, as stronger credit makes banks more willing to lend money at lower (and preferably fixed) interest rates.
Pros
- Zero-interest balance transfer cards offer time to pay off balances interest-free
- Consolidation loans simplify debt into one fixed monthly payment
- Lower rates help reduce total interest paid over time
Cons
- Promo rates on transfer cards typically end after 12–18 months, leading to higher interest
- Strong credit required to qualify for favorable loan terms
- Transfer or origination fees may apply
Cost
Costs for a zero-interest credit card typically include a 3% to 5% charge for the convenience of transferring your initial balance. However, if you don’t make a plan to pay off your debt within the zero-interest introductory period, you could end up paying substantially higher interest charges on any remaining balance(s).
Your costs for debt consolidation loans depend largely on your original debt balance and the interest rate you lock in on your new loan.
Stats
- Maryland residents have a strong average credit score of 715, making it easier for many to secure loans at lower interest rates.
Resources
Brad Reichert, the founder and managing director of Reichert Asset Management LLC, provides further insight into the use of debt consolidation. “The total cost you will pay for your debt consolidation loan will depend almost entirely on your interest rate, your repayment term, and the amount of any loan origination fees or prepayment penalties you may pay (if any) during the course of your loan,” Reichert says.
“Not surprisingly,” he adds, “the amount of interest you pay will be the largest portion of your cost of borrowing. The longer your repayment term, the lower your monthly payment, but you’ll pay more in total dollars of interest because your balances will remain outstanding for a longer period of time.”
“On the other hand, the shorter your repayment term, the higher your monthly payment will be, but you’ll pay interest on your balance(s) for a much shorter period of time and save more in total interest paid,” Reichert says.
Debt Settlement
Settling debt offers a way to pay off large unsecured balances, such as credit card and medical bills, in a reasonable amount of time.
How It Works
Maryland residents who enroll in a debt settlement program connect with experts who negotiate a reduced lump-sum payment with creditors in return for waiving or forgiving the remaining balance.
Pros
- Can reduce unsecured debt balances by up to half before fees
- Helps avoid bankruptcy and shortens payoff timelines
- Professional negotiators manage creditor communication
Cons
- Credit score may drop during settlement period
- Only applies to unsecured debts like credit cards or medical bills
- Service fees apply
Cost
While you won’t pay anything up front, debt settlement companies charge fees ranging from 15% to 25% of your total enrolled debt.
Stats
- Maryland is third in the nation for the highest average credit card debt per person.
- Residents of the Old Line State owe an average of $8,830 in outstanding credit card balances.
Resources
Read more about debt settlement and how it can help you overcome large debt balances.
Bankruptcy
Baltimore residents should consider bankruptcy a last resort after exhausting other ways to relieve and reduce their debts.
How It Works
Declaring bankruptcy is a lengthy and complex process that utilizes the court system to direct and discharge debt payments. Maryland consumers usually file Chapter 7 or Chapter 13 bankruptcy, depending on how they want to manage their finances.
It’s a good idea to speak with a bankruptcy attorney before starting the process with a regional bankruptcy court to ensure your case goes as smoothly as possible and you get the best debt relief results.
Pros
- Offers a clean slate for those overwhelmed by debt
- Discharges most unsecured debts through court protection
- Stops collection calls and wage garnishment
Cons
- Negative impact on credit for up to 10 years
- Legal and court costs can be significant
- Certain debts, like taxes or student loans, remain ineligible
Cost
Attorney fees can soar up to nearly $5,000 over the course of your bankruptcy proceedings, depending on the attorney you choose to help you through the process. You’ll also owe court fees for filing documents with the state.
Stats
- A total of 10,858 Maryland residents filed for some type of bankruptcy (PDF) in 2024.
Resources
Read the answer to the question many Marylanders ask: “What is life like after bankruptcy?”
What You Need To Know About Debt in Maryland
Statute of Limitations on Debt Collections in MD
Maryland’s Statute of Limitations on Debt Collections offers time limits that mostly favor consumers. This means creditors can only legally pursue consumers for a brief period of time if they don’t pay their debts. While debts don’t ever disappear, the statute of limitations allows consumers more time to pay them off without the fear of legal consequences and court costs.
Here’s a look at Maryland’s Statutes of Limitations by type of debt:
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 3 years |
| Promissory Notes (mortgages) | 12 years |
| Open-Ended Accounts (credit cards) | 3 years |
| Oral Agreements | 3 years |
| Medical Debt | 3 years |
Student Loan Forgiveness in Maryland
Maryland offers loan repayment assistance to medical professionals who meet program qualifications based on credentials and length of service. These programs provide support to doctors, nurses, and other healthcare professionals.
Resources for Financial Assistance in Maryland
During the COVID-19 pandemic, Maryland stimulus checks helped residents get back on their feet. Now that those have ended, there are still other programs to aid financially struggling residents.
Top assistance programs in Maryland include:
- Cash Assistance: Maryland offers Temporary Cash Assistance (TCA) to qualifying individuals and Temporary Assistance for Needy Families (TANF) to help struggling residents provide for their children.
- Emergency Assistance: The Emergency Assistance to Families with Children (EAFC) program provides financial assistance in emergency situations. This includes an inability to pay utilities or rent.
- Food Assistance: Maryland administers the Supplemental Nutrition Assistance Program (SNAP) to help low-income families buy nutritious food.
- Child Care Assistance: Maryland helps low-income families pay for high-quality child care.
Get Professional Help Paying Off Your Debt
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We’ve already assisted thousands of Maryland clients in saving 56% of their total debt before fees.
TurboDebt clients also benefit from:
- No upfront fees to get started
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