Turbo Takeaways
- Minnesotans face rising household debt despite strong credit scores and a steady economy.
- Debt relief options like settlement, management plans, and consolidation simplify repayment and lower interest rates.
- Personalized solutions can help residents regain control of their finances and move toward a debt-free future.
**Disclaimer: We are currently unable to enroll clients in Minnesota. Please give us a call or check back again soon for updates.
Your Options To Get Out of Debt in Minnesota
Whether you call it the North Star State or the Land of 10,000 Lakes, Minnesota holds a special charm for everyone who calls it home. From pristine wilderness to the unique metropolis of the Twin Cities, Minnesotans have a lot to enjoy in their home state.
However, even this far-northern state hasn’t escaped the relentless march of increasing consumer debt. Unemployment has continued in an upward trend in the North Star State, and fewer job openings make it difficult for Minnesota residents who want better economic opportunities.
The reality is, as Minnesotans struggle to afford goods and services amidst rising debt and inflation, many feel trapped. Debt relief options offer a solution to pay down high balances and regain your financial freedom.
Credit Counseling
Pros
- Access to professional financial advice tailored to your debt situation
- Opportunity to improve budgeting and spending habits long term
- Low-cost or free programs available for eligible Minnesota residents
Cons
- Requires consistent self-discipline to apply counselor recommendations
- Limited impact on reducing existing debt balances
- May not provide immediate relief for high-interest accounts
How It Works
A certified credit counselor can offer sound financial advice to help you make better choices with your money.
Minnesotans enrolling in a credit counseling program can get personal advice about getting out of debt, including suggestions about managing your credit score and history.
- Cost
Credit counseling is a low-cost solution that some Minnesota residents can access free of charge, depending on their income level. - Stats
Although these programs offer cost-effective advice, more Americans have chosen debt settlement over credit counseling in the past decade. - Resources
Discover more ways credit counseling can help you plan to get out of debt.
Debt Management
Pros
- Streamline the payment process each month
- Potential reduction of interest rates and late fees
- Structured 3–5 year plan to eliminate unsecured debt
Cons
- Monthly fees for each account enrolled in the DMP
- Close out most, if not all, of credit card accounts to avoid further spending
- Missed payments can cancel program benefits and agreements
How It Works
North Star State residents can enroll in private or nonprofit debt management programs (DMPs) through a professional organization. Once you get started, the organization collects a monthly payment from you and distributes the funds to creditors on your behalf.
- Cost
Debt management companies typically charge $30-40 to enroll, plus $20-30 monthly for each enrolled account they administer. - Stats
Minnesotans carry an average consumer debt of $106,981, making DMPs a viable solution to pay down multiple monthly balances. - Resources
Here’s an in-depth guide to debt management and how it can help consumers struggling with debt.
Debt Consolidation
Pros
- Combines multiple debts into one manageable monthly payment
- Zero-interest balance transfer credit card can eliminate all extra fees
- Debt consolidation loans can help reorganize debt payments and reduce interest costs
Cons
- Qualification depends on good or excellent credit
- When balance is not paid off before the introductory period, the zero-interest card typically reverts to a regular APR of up to 29%
- If a fixed interest rate is not sufficiently low, debt consolidation loans may not be a viable option
How It Works
Consolidation involves two DIY options to alleviate debts. Minnesotans with unpaid credit card debt and high-interest payments may benefit from moving balances to a zero-interest card. Once the funds are assigned to the new card, you can put more money toward paying off significant balances without the added interest costs.
Another option is to take out a debt consolidation loan. You’ll need to secure a large, low-interest loan to cover all current balances. Once you sign for the loan, you’ll pay off your current debts and start making payments on the new loan instead.
- Balance Transfer Cost
A 0% balance transfer card may charge a fee of up to 5% and have APRs as high as 29.99% after the introductory period. It's best to read your credit card's terms and conditions carefully. - Consolidation Loan Cost
A debt consolidation loan costs the full principal plus interest over the loan's life. Extending the term to lower monthly payments can lead to paying more total interest. - Stats
At 730, Minnesotans have the highest average credit score in the country. This suggests that many residents will likely qualify for more favorable interest rates on a consolidation loan. - Resources
Are debt consolidation loans a good idea? Read more information from the TurboDebt® resource library.
Debt Settlement
Pros
- Reduces total debt owed through negotiated settlements
- Shortens repayment period compared to traditional plans
- Provides a realistic option for financial hardship
Cons
- Temporary drop in credit score during the settlement process
- Negotiations may not succeed with all creditors
- Settlement fees applied to enrolled debt
How It Works
Minnesota residents with thousands of dollars in unsecured debt can typically reduce their debts by up to 50% using a debt settlement program.
Minnesotans can contact creditors on their own or leverage the expertise of a debt settlement organization to negotiate for a reduction in their total debt. To complete a settlement, creditors agree to reduce your debt for a lump-sum payoff to end your outstanding balance.
When you work with a debt settlement company, you’ll send monthly payments to the organization until you collect enough to make one payment to the creditor.
- Cost
Debt settlement companies typically charge between 15 and 25% of your total enrolled debt to administer your account and negotiate a settlement. - Stats
Debt settlement effectively allows North Star State residents to end large credit card balances. In Minnesota, the average credit card debt is $6,820 per resident. - Resources
Learn more about the ways debt settlement helps you overcome unsecured debts.
Bankruptcy
Pros
- Offers legal protection from creditors and collection actions
- Discharges or restructures most unsecured debt
- Provides a financial reset for individuals with overwhelming debt
Cons
- Remains on credit report for up to 10 years
- Difficulty opening new lines of credit or taking on loans for purchases like a home or a car
- Involves complex court procedures and legal fees
How It Works
Bankruptcy offers one last option to clear most debts at the expense of your credit history. It is a process that involves restructuring and discharging your debts with the help of Minnesota’s bankruptcy court system.
Most individuals in the Land of 10,000 Lakes file either Chapter 7 or Chapter 13 bankruptcy to overcome debts.
- Cost
Lawyer fees can soar upwards of $5,000, depending on your attorney and the complexity of your case. You’ll also pay filing fees to the court. - Stats
In 2023, 8,231 Minnesotans filed for some type of bankruptcy (PDF). - Resources
Learn more about life after bankruptcy and how Minnesotans can rebuild financially.
What You Need To Know About Debt in Minnesota
Statute of Limitations on Debt Collections establishes time limits to protect consumers from being sued by creditors for not paying a debt.
Statute of Limitations on Debt Collections in MN
In Minnesota, creditors can only pursue legal action against a debtor within the statute's time. While this doesn’t mean debts can go unpaid or disappear after the statute expires, it does help consumers struggling to overcome tough financial situations.
Here’s a look at the Minnesota’s statutes:
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 6 years |
| Promissory Notes | 6 years |
| Open-Ended Accounts | 6 years |
| Oral Agreements | 6 years |
| Medical Debt | 6 years |
Student Loan Forgiveness in Minnesota
Minnesota offers student loan forgiveness through the Public Service Loan Forgiveness Program (PSLF), a federal program that assists qualifying residents who work in public service roles throughout the state.
Resources for Financial Assistance in Minnesota
Minnesota offers financial assistance for families and individuals through various state and federal programs, including the following:
- Supplemental Nutrition Assistance Program (SNAP): Formerly known as “Food Stamps,” this program helps low-income Minnesotans by giving out cash benefits for nutritious food.
- Minnesota Family Investment Program (MFIP): This program provides food support, cash aid, employment services, and child care for families with children.
- Medical Assistance (MA): Minnesota administers medical assistance through Medicaid, providing health care coverage to low-income residents.
Although no new Minnesota stimulus checks are being issued, residents may still qualify for tax credits to offset some costs.
Get Professional Help Paying Off Your Debt
Even state assistance programs may not be enough to offset heavy debt burdens. That’s why seeking professional help for debt relief may be the best option to reset your finances and regain your financial freedom.
TurboDebt® works with consumers to save an average of 50% of their total debt (before fees). With no upfront costs and personalized debt relief plans, we think you’ll benefit from working with us.
Check out 20,000+ 5-star TurboDebt reviews from Google and Trustpilot to find out more about us from our clients.
Contact TurboDebt today to learn how to pay off debts faster and start your journey toward financial freedom.