Michigan Debt Relief
13 MIN READ
Published March 30, 2023 | Updated October 02, 2023
In a Nutshell
Reducing unsecured debt or other debt you might have is daunting, but it can be done. This Great Lake State carries a large majority of student loan and mortgage debt. In Michigan, the average amount of consumer debt is $74,344, but with TurboDebt, we can help you become debt-free in as little as 24-48 months with a simple plan.
How Does Debt Relief Work in Michigan?
With the rise of economic uncertainty comes an increase in debt. It can be hard to reduce debt, especially with rising energy costs, rent, and other necessities.
In this article, we'll share insights and tips to help you get out of debt in Michigan. Read on to learn more about your debt relief options and different Michigan debt relief programs.
Debt and Finances in Michigan
Average Consumer Debt
With the average consumer debt in Michigan over 70,000, there are plenty in the Wolverine State struggling to pay bills. Consumer debt is calculated by combining the total debt average an individual carries based on auto and student loans, mortgages, and credit card debt. Despite being one of the states with the lowest outstanding consumer balance, this figure is still a lot for the general population to manage.
Credit Card Debt
One of the most challenging types of debt to get rid of is credit card debt. In Michigan, the average amount of credit card debt per person is $5,399. In an inflationary economy, credit card debt can quickly accumulate, along with high interest rates and late fees.
Auto Loan Debt
Auto loan debt comes from purchasing or leasing a car. In Michigan, the average auto loan debt was $16,560 in 2021. This is a low number compared to the rest of the 50 states, however, for the Wolverine State, this number jumped 7.5% from the previous year. The national average for auto debt keeps rising, and in 2021, it went above $20,000 for the first time in history.
Mortgage debt can be significantly higher than all other debts due to housing costs and the sheer size of the purchase. When it comes to homeownership, Michigan residents carry $145,636 worth of mortgage debt.
Interest rates are also some of the highest numbers in decades at 6.89% as of March of 2023, making it harder to avoid massive debt when buying a home.
Student Loan Debt
Student loans are some of the toughest financial burdens to escape because even if you file for bankruptcy, it's hard to discharge this debt. When it comes to student loan debt, Michigan residents average $36,345, the 19th highest in the country.
In 2022 16,949 people filed for bankruptcy in Michigan. Thankfully, there's been a significant decrease in bankruptcy filings in Michigan when you compare 2019 to 2022. In 2019, over 30,000 Michigan residents completed bankruptcy filings.
Average Income and Employment
Statistically speaking, those with higher incomes can handle more debt compared to those with lower incomes. In the state of Michigan, the per capita income is $34,768, with a median household income of $63,202.
According to the Bureau of Labor Statistics, Michigan had a 3.8% unemployment rate as of April 2023, higher than the nation's.
When it comes to determining your financial future, a healthy credit score is crucial. As of 2022, the average credit score in Michigan was 718, about the same as the previous year. A very good credit score is between 740 to 799, so, all things considered, this credit score indicates a good possibility for Michigan residents to improve their finical health.
Avoiding identity theft is crucial in securing your financial future. In 2022, Michiganders reported 21,768 incidents of identity theft. To keep your identity secure, it's a good idea to keep things like social security numbers and credit card information safe.
Banking and Tax Info
One thing that most people overlook when getting out of debt is the sales tax in their state. The average state sales tax is 6% for the state of Michigan. But unlike most states, Michigan does not have a local state tax.
How TurboDebt Can Help You
TurboDebt is committed to helping residents of Michigan find low-cost solutions. In fact, we were able to save clients an average of 51.69% before fees in 2022. With 2,909 total clients and an average debt enrolled at $21,309, we are a leader in helping Michigan residents get debt relief. Whether you're dealing with credit card debt, medical bills, or any other debt, we at TurboDebt are committed to serving you.
Top Types of Debt to Get Relief from in Michigan
TurboDebt understands that divorce proceedings can put a strain on your finances. With the average divorce costing over $10,000 in Michigan, falling into debt after breaking ties with your spouse can put in in a difficult position to pay off outstanding fees, credit accounts, and other accumulated debts.
Starting a business is an exciting opportunity; however, many business owners use their own funds to take on small business loans with high interest rates. Add personal debt on top of it, and it can seem like a nightmare. TurboDebt can help you reduce the amount of business debt you have. Call today for a free consultation to see how we can help.
Experiencing a health condition can be challenging enough without the added struggle of medical bills. The Consumer Financial Protection Bureau estimates that 20% of Americans carry medical debt, with nearly half of that amount in collections.
You don’t have to struggle to pay your medical bills alone. TurboDebt has experience in reducing medical debt to help clients get back to living debt free.
When purchasing and maintaining your home, it can be easy to get into debt. Getting behind on payments can mean additional fees or even foreclosure. Hearing from a collection agency is the last thing you want as a homeowner. With the average mortgage debt up 7.3% across the country in 2022, Michigan residents face similar struggles.
Don’t carry the burden of homeowners debt alone. Call TurboDebt and let us help.
Living on a fixed income in your retirement years can make it harder to pay off unexpected costs, leading to debt problems. WalletHub ranks Michigan 29th in the country for retirees, based on affordability based on cost of living.
Don't let debt invade your retirement. Let TurboDebt help you make your retirement better.
Debt Relief Options in Michigan
Debt Management Programs
Enrolling in a debt management program typically involves working with debt relief professionals to develop a payment plan for your outstanding balances. A debt management organization may help you set up monthly payments to eliminate your debts. They might also assist you in securing lower interest rates or reducing fees from creditors.
Once you enroll in a debt management program, you'll set up a payment program through the organization with a clear timeline for eliminating your debts.
Debt Consolidation Loan
To eliminate multiple high-interest balances, another debt relief option for Michiganders is a debt consolidation loan. In this solution, you take out a loan large enough to pay off all your debts at once, shifting your payments to a single account.
A debt consolidation loan might be right for you if you've accumulated debt in multiple places. Borrowers with a good credit score can often secure loans from lenders at lower interest rates than they would pay on outstanding balances like credit card debts.
To alleviate staggering amounts of debt, Michigan residents can also apply for debt settlement programs. This option involves working with professionals who negotiate a reduction of your total debt with creditors, even up to 50% of what you owe as a repayment.
Once you enroll in a program, debt settlement companies typically set up a savings account you pay into each month. The organization uses this money to pay your creditors and charges a fee for administrating the transaction, settling the debt, and managing your account.
Debt negotiation through a settlement can help you pay down big amounts of debt quickly, often in 24-48 months.
Addressing your financial situation by talking to a credit counseling agency is a great place to start. In this option, Michigan residents get to work one-on-one with a credit counselor to improve their credit and financial situation.
Credit counselors offer advice and education, usually at no cost. Non-profit agencies offer free financial classes about budgeting, avoiding debt, and managing monthly payments. They can go through your credit report and credit history and give you tips to help up your scores and start managing your finances more effectively.
Filing for bankruptcy might be your best option if you have no other ways to reduce and eliminate your debts. When you file for bankruptcy, you ask to be discharged from your outstanding balances to start fresh. Individuals can file to eliminate debt under Chapter 7 bankruptcy or reorganize it using Chapter 13 bankruptcy.
Bankruptcy proceedings are time-consuming and affect your credit for up to 10 years. It's important to seek legal advice if you plan to pursue this solution to relieve your debts.
In some cases, you might be able to have your debt forgiven. The most common occurrence is through student loans. When a certain type of loan is forgiven, you no longer have to pay it off. However, the IRS requires you to file the amount forgiven as income and pay taxes on it.
While debt forgiveness is rare in the private sector, public institutions, mainly the federal government, offer programs to forgive mortgage, tax, and student loan debts. You'll also have to meet strict requirements for debt forgiveness, tied to factors like your income or profession.
Debt and Financial Hardships Resources
Temporary Assistance Programs
Michigan residents who need assistance can find a wide variety of programs through MI Bridges, a portal for multiple programs providing cash assistance and other services to help low-income families in the Wolverine State.
You can also find help through the Michigan Family Independence Program, a government-funded cash assistance service.
State Health and Human Services
Michigan residents can get help finding a low-cost medical plan through the State Health and Human Services Department. Medicare and Medicaid might be right for you if you’re eligible.
Shelters for the Homeless
Michigan hosts over 8,500 shelters throughout the state, with many clustered around urban areas like Detroit, Lansing, and Flint. Find more resources through this portal on the state's Helping Hand website.
Free Transportation Services
If you’re a Michigander who lives in a low-income area, you might qualify for reduced transportation costs or find help getting to important medical appointments through medical transportation services.
Find Debt Relief in Michigan
In an uncertain economy, looming debt can hinder your financial independence. Finding a debt relief solution like debt settlement or credit counseling may be the best step you can take to change your situation. Look for a reputable organization with transparent information, accreditation, and unbiased reviews.
At TurboDebt, we're dedicated to making Michigan residents debt free in as little as 24 months. In the past year alone, we've saved Michiganders 51% of their total debt before fees. We're ready to find the solution that works for you. For more information about TurboDebt, contact us today for a free consultation.