Michigan Debt Relief Programs in 2025

Your Options To Get Out of Debt in Michigan

Michigan is known for its Great Lakes shorelines, automotive heritage, and resilient communities. Yet many households still struggle with the burden of debt.

Rising living expenses and lower-than-average household income have left Michigan residents with tighter budgets to cover monthly payments and rising balances.

Debt relief programs in Michigan provide structured ways to simplify repayment, reduce interest, and help residents regain their financial stability.

Keep reading to explore Michigan debt relief solutions and find the approach that best fits your situation.

Credit Counseling

How It Works

For many consumers, credit counseling offers a structured starting point for addressing debt. In the Great Lakes State, credit counseling advisors typically start the sessions with a full review of your income, monthly bills, and outstanding balances.

Counselors then design a tailored plan that may include budgeting strategies, repayment options, or a referral to a debt management plan if additional support is needed.

• Cost
  Most organizations provide the first counseling session free of charge. If you continue, follow-up sessions may involve modest setup or monthly fees, though nonprofit agencies usually keep these costs affordable for households.
• Stats
  Accredited counselors are available nationwide through the Financial Counseling Association of America (FCAA) to assist households with budgeting and debt repayment.
• Resources
  Explore how credit counseling works and the support it can provide for managing debt and improving financial stability.

Debt Management

How It Works

Debt Management Plans (DMPs) give Michiganders a structured way to regain control over multiple debts. Credit counseling agencies offering DMPs often negotiate with creditors to lower interest rates or remove late fees.

Once terms are set, you submit a single monthly payment to the agency, making it easier to track progress and avoid missed deadlines.

• Cost
  Setup costs for a DMP typically range from $25 to $75, with monthly fees between $20 and $50. Nonprofit organizations may lower or waive these charges for households with limited income.
• Stats
  As of Q3 2024, Michigan residents held an average of $77,389 in consumer debt, reflecting balances from mortgages, credit cards, auto loans, and student loans.
• Resources
  Learn more about how debt management works and the help it can provide in creating a predictable repayment schedule.

Debt Consolidation

How It Works

For many in Michigan, debt consolidation loans offer a way to simplify finances and reduce interest costs. By combining several debts into a single payment, residents can streamline repayment and work toward becoming debt-free more efficiently.

In the Great Lakes State, consolidation usually happens in two ways. One option is to take out a new loan large enough to pay off existing debts, leaving only one monthly payment.

Another option is to transfer balances from high-interest credit cards onto a zero-interest promotional card, giving time to pay down debt without extra finance charges.

• Cost
  Consolidation loans can include interest charges and origination fees, while 0% balance transfer cards usually add a transfer fee of 3%–5%. Interest applies to any unpaid balance once the promotional period ends.
• Stats
  As of Q3 2024, Michigan residents had an average credit score of 719, slightly above the U.S. average of 715. Many households find it easier to qualify for consolidation loans and balance transfer offers with a healthy credit score.
• Resources
  Find out more about debt consolidation and how it may help you create a more manageable repayment plan.

Debt Settlement

How It Works

Debt settlement is an option for Michiganders struggling with high balances on unsecured debts like credit cards and personal loans.

By negotiating with creditors on your behalf, debt settlement companies can reduce the total amount owed, offering a path to relief without the need to file for bankruptcy. If successful, creditors may agree to accept a lump sum payment or a structured plan for less than the full balance.

• Cost
  Most legitimate debt settlement organizations charge a fee equal to 15%–25% of your enrolled debt. By law, these fees can only be collected once a settlement has been reached and approved by the consumer.
• Stats
  As of Q3 2024, Michigan residents had an average credit card balance of $5,932, slightly below the national average of $6,730. Despite lower balances, many households still use settlement programs to reduce debt and manage rising interest charges.
• Resources
  Read more about how debt settlement works and the potential benefits of using this relief option to manage unsecured balances.

Bankruptcy

How It Works

As a last resort, bankruptcy provides legal protection for consumers who can no longer manage overwhelming debt. Although filing may offer a financial reset for Michigan residents, it also comes with long-term consequences.

Residents of the Great Lakes State who have exhausted other debt relief options can petition the federal bankruptcy court for assistance. They typically file Chapter 7 or Chapter 13 bankruptcy to address debts, either by liquidating certain assets or following a court-approved repayment plan lasting three to five years.

• Cost
  Court filing fees are usually under $500. Attorney costs vary widely but often range between $1,500 and $5,000 or more, depending on the complexity of the case.
• Stats
  According to the U.S. Courts, Michigan recorded 21,127 bankruptcy filings (PDF) as of June 2025. The majority of cases were filed under Chapter 7 and Chapter 13, which remain the most common forms of consumer bankruptcy in the state.
• Resources
  Learn about limitations after filing for bankruptcy and how to prepare for rebuilding credit and setting realistic goals once your case is closed.

What You Need To Know About Debt in Michigan

Creditors don’t have unlimited time to pursue unpaid debts through the courts. Once the statute of limitations expires, they can no longer file a lawsuit to recover what’s owed, even though they may still attempt to collect informally. 

Statute of Limitations on Debt Collections in Michigan

In Michigan, the statute of limitations provides consumers with a clearer understanding of their rights and the timeframe within which creditors can take action.

Here’s how the statute of limitations applies to different types of debt agreements in MI:

Credit Card Forgiveness in Michigan

Michigan does not offer a state-run program for credit card forgiveness.

However, residents struggling with unsecured debt may pursue options such as debt settlement or consolidation to reduce large balances. These programs can provide meaningful relief when credit card payments become unmanageable.

Student Loan Forgiveness in Michigan

Borrowers in Michigan can apply for federal forgiveness programs, including Public Service Loan Forgiveness (PSLF), which cancels remaining balances after 120 qualifying payments for those in eligible public service roles.

Michigan residents can explore PSLF and other federal options through the Federal Student Aid forms library.

Resources for Financial Assistance in Michigan

Michigan provides several financial assistance programs to support residents who are struggling with financial hardship. These initiatives cover basic needs like cash assistance, food, child care, and health coverage:

• Family Independence Program (FIP): Michigan’s TANF cash assistance program provides monthly benefits to eligible families with children, covering essentials like housing, food, and utilities.
• Food Assistance Program (FAP): SNAP nutrition program that offers monthly grocery benefits for households meeting income and size requirements.
• Women, Infants, and Children (WIC): WIC is a federally funded program that delivers healthy foods, nutrition education, and breastfeeding support for pregnant women, new mothers, and children under five.
• Child Development and Care (CDC) Program: This child assistance program helps cover costs, enabling parents to work, attend school, or complete training.
• Michigan Medicaid Program: Michigan’s health coverage program provides doctor visits, prescriptions, dental care, and preventive services at little to no cost for eligible residents.

While federal programs provided temporary relief during the pandemic, no new Michigan stimulus checks are planned for 2025 or beyond.

Seek Expert Assistance to Pay Off Debt

When debt from credit cards, medical bills, or personal loans becomes overwhelming, working with a trusted company like TurboDebt® can make the difference. Professional guidance ensures you understand your options and choose the path that best fits your financial situation.

TurboDebt has helped thousands of Michiganders reduce their enrolled balances by an average of 53% before fees. For residents struggling to manage payments, this level of savings can mean a faster and more realistic way out of debt.

Here’s why TurboDebt services are a reliable option for debt relief in Michigan:

• No upfront fees to get started
• Potential savings of 50% or more on your total debt (before fees) with our settlement program
• Debt-free in as little as 12–48 months
• No new loans or lines of credit required
• Over 20,000 5-star TurboDebt reviews from satisfied clients

Don’t let debt control your next chapter. Contact us today for a free consultation and take the first step toward regaining your financial independence.