Wisconsin Debt Relief
19 MIN READ
Published April 04, 2023 | Updated October 02, 2023
In a Nutshell
Like many other U.S. states, Wisconsin has a significant debt burden. This debt shows in various forms, including credit card balances, student loans, medical bills, mortgage payments, and business debts.
With the average household debt in Wisconsin higher than the national average, many residents need help paying off their debts to achieve financial stability. Fortunately, there are various Wisconsin debt relief options available to residents that can help alleviate their financial burdens and get them back on track.
In this article, we'll explore the top types of debt people struggle with in the state, offer critical debt and financial hardship resources for individuals, and share some of the best debt relief options available in Wisconsin today.
Wisconsin's Economic Picture
Wisconsin is known for its milk and cheese production, public museums, and coastlines along Lake Michigan and Superior. It’s the 25th largest state and the 20th most populous state in America. Due to its economic activities, residents in Wisconsin boast of the 2nd lowest credit card debt in the nation at $4,961. However, this doesn’t spare them from seeking debt relief options.
As of 2020, Wisconsin had the second-highest average credit score in the country, landing at 732, enabling most of its residents to acquire lower interest rates when seeking personal loans, mortgages, or other equity. Such a fantastic credit score is attributed to effective savings and a low delinquency rate on secured and unsecured debt.
While Wisconsin's credit is good, many residents still struggle to make ends meet, as the average consumer debt is $82,730, primarily due to mortgage and student loan debt. When compared to the average household income of $87,773, it can take a long time to pay off debts after accounting for all other normal expenses. As such, pursuing debt relief options can be a great strategy to alleviate debts and give residents a fresh financial start.
How Does Debt Relief Work in Wisconsin?
Debt relief comes in many forms. However, some of the most popular options involve the process of negotiating for a reduced payment, consolidating outstanding balances, or securing lower interest rates to achieve a debt-free life. These strategies work on different types of debts, including unsecured debt, personal loans, medical bills, mortgage payments, and credit card debts.
Wisconsin Debt and Finance Statistics
The following information about debt and finance statistics is specific to the state of Wisconsin:
Average Consumer Debt
The average consumer debt in Wisconsin was $82,730 in 2022, an increase of 1.9% from $81,220 in 2021. While consumer debt has been growing across the country, Wisconsin still comes in under the national average. It's also worth noting that consumer debt can vary widely by individual and by region within the state, as this figure is just an average.
Credit Card Debt
Wisconsin residents have managed to reduce their credit card utilization below the recommended 30% rate of their income. This has allowed them to achieve the second-lowest average credit card debt in America at $4,961.
While this is an excellent achievement, many Wisconsin residents still struggle with credit card debt. It remains one of the top reasons why residents of the Badger State enroll in TurboDebt's relief program.
Auto Loan Debt
The average auto loan debt in the state of Wisconsin grew by 6.5% to $18,670 in 2021 from the previous year's $17,527. This is largely due to rising car prices, leading to increased costs for owning a vehicle.
However, in metropolitan areas, values fluctuate. In Milwaukee, for example, the average home value is $189,467, while Green Bay homes are valued at $223,040.
The Badger State had an average mortgage debt of $152,010 in 2021, which is an increase of 5.4% from $144,225 in 2020. This is a result of increased interest rates after the pandemic in an attempt to curb inflation rates, which also increased the nation’s average mortgage debt.
Wisconsin residents also pay an average rent of $1,026 compared to the national average of $1,385. Overall, mortgage debt in Wisconsin remains relatively low. However, we still see many residents seek help for outstanding housing costs through debt relief options in the state.
Student Loan Debt
Student loan payments are one of the most common types of debt that young people face, and Wisconsin is no exception. Wisconsinites with a bachelor’s degree and above make up 31.5% of the state’s population.
The average household debt-to-income ratio in Wisconsin is 1.272, with each household having an average of 2.39 people. This includes all types of debt, including mortgages, credit cards, auto loans, and student loans. It's important to note that this is only an average, and individual household debt levels can vary greatly depending on factors like income, employment status, and borrowing decisions. Furthermore, the types of debt that comprise this figure can vary significantly from household to household.
The bankruptcy rate in Wisconsin, as with the rest of the country, has been in decline over the past decade. In 2022, the total number of bankruptcy cases filed came to 7,898. Of these, 4,955 were for Chapter 7 bankruptcy, and 2,917 accounted for Chapter 13 filings.
Average Income and Employment
Wisconsin has an average household income of $87,773 and a per capita household income of $36,754. The average household income of 65-year-olds and above is $48,793. Some of the richest income counties in Wisconsin are Ozaukee County at $92,719 and Waukesha County at $82,032 per capita personal income.
The unemployment rate in the state is 3.0% ranking it 33rd in the economic performance rank and 14th in the economic outlook rank.
A very good credit score of 740 to 799 is crucial in accessing personal loans or low-interest secured loans. The residents of Wisconsin rank 2nd in states with the highest FICO with a credit score of 732. While this allows residents to access low-interest loans, it also strengthens the state's creditworthiness. However, if you’re not prepared to pay low-interest loans back, they can quickly turn into a debt that you need relief from.
Wisconsin ranked 36th in the nation with 5,023 reports of identity theft. The top types of identity theft in the state include the following:
- Credit card fraud at 39%
- Other identity theft at 30%
- Loan or lease fraud at 15%
- Bank fraud at 13%
- Phone, phone call, or utility fraud at 13%
In total, fraud and other reports in the state amounted to 31,61,0, with a median fraud loss of $236.
Banking and Tax Info
Wisconsin residents have a good saving culture and a low credit card delinquency rate of 5.43, which has helped them to maintain high credit scores. As a result, total assets in the state’s banking sector have been steadily growing to more than $118 million in 2020.
The overall rank of Wisconsin’s tax system is 27th, and it has the following tax rates:
- A graduated individual income tax of 3.45% to 7.65%
- State and local tax burden of 10.9%
- A 7.09% top corporate income tax rate
- State and local sales tax rates of 5% and 0.43,% respectively
- Property tax of 1.63%
Since the state has no inheritance and estate tax, it’s considered to be tax-friendly. Also, the low rate of combined states and an average sales tax rate of 5.43% makes Wisconsin a tax-friendly environment.
How TurboDebt Helped Clients with Debt in 2022
Here at TurboDebt, 2022 was a big year for helping people become debt-free in Wisconsin. We assisted a total of 1,458 customers, and out of that number, 510 enrolled in our debt relief program.
With an average enrolled client debt of $20,043, our professional team went on to save individuals an average of 52.0% of the principal amount of debt they owed before fees.
For instance, with a personal debt of $20,043, we could save you up to about $10,422 with our debt relief program. Get in touch for a free consultation to see how much we could save you today.
Top Types of Debt to Get Relief from in Wisconsin
The top types of debt covered in the Wisconsin debt relief program include:
Credit Card Debt
With a credit card debt lower than the nation’s average, Wisconsin residents are managing their consumer spending and utilizing their credit cards less often compared to other states. However, this doesn’t prevent credit card debt from accumulating due to late fee charges and compounding interest rates.
TurboDebt offers a Wisconsin debt relief program for credit card debt. We can help you tackle your credit card debt through our tailored program offerings. We can also recommend alternatives such as a credit counseling program to start your journey toward a debt-free life.
Wisconsin is a community property state, meaning that properties and debt accumulated during a marriage are shared equally among spouses. As a result, you may acquire divorce debt in Wisconsin if your partner has accrued debt without your knowledge or if you made a purchase together.
When you also consider the cost of divorce at a law firm in Wisconsin, which ranges from $11,300 to $100,000, it's clear how divorce debt may accumulate, especially if you're dependent on your partner for financial stability.
Business debt comes from the money that you borrow in order to start and grow a business. It can accumulate from operational or expansion purposes. Business debt can also arise from unforeseen circumstances such as a lawsuit, disaster events like the pandemic, or a significant loss of clients.
TurboDebt helps our clients navigate the murky waters of business debt to avoid foreclosure or repossession of their business’s assets. Our debt relief plan provides a way to secure the future of your business by clearing your business debt with manageable monthly payments.
The Consumer Financial Protection Bureau estimates that 20% of Americans carry medical debt. This includes 58% of bills in collections, making it one of the most difficult debt burdens to bear.
Also, with 6.4% of its population uninsured, the residents of Wisconsin are more likely to accumulate medical debt to maintain their health or deal with an accident.
Avoid debt collection issues and live a debt-free life by sticking to a plan negotiated by our professional representatives at TurboDebt.
With an average monthly mortgage payment of $1,491, the bulk of most consumer debt in Wisconsin is homeowner debt. And while this is below the national average of $1,697, it still represents a large burden for Badger State residents.
At TurboDebt, we’re passionate about resolving your homeowner debt through a management program to help you cover your monthly payments consistently and settle any outstanding debt.
The average annual retirement income in Wisconsin is $24,989, while the average cost of living is $23,640. This makes financial stability difficult in your retirement years and could mean you accumulate more debt while on a fixed income.
TurboDebt’s debt relief program is designed to help you break the cycle of debt. We can also advise you and provide tools for financial success. We want to enable you to make wise decisions when it comes to spending and saving to limit your chances of accruing more retirement debt.
Wisconsin Debt Relief Options
You can get debt relief in Wisconsin with the following top choices:
Debt Management Programs
Many organizations offer debt management programs in Wisconsin. Specialists offering debt management plans can advise you on how to make repayments without taking out another loan or incurring more outstanding balances. They use your debt-to-income ratio to determine how much you’ll pay each month toward ending your debts.
Qualifying consumers must be ready to make consistent monthly payments for 3 to 5 years. If you skip or delay a monthly payment, you risk losing your debt management plan.
Debt management plans may also help you lower your interest rates, saving you a significant amount in fees, and allowing you to pay off your debt faster than continuing to make normal monthly payments at a higher rate.
Debt Consolidation Loans
Debt consolidation loans can be considered a type of debt relief program, allowing consumers to access a single low-interest loan to pay off their high-interest credit card debts.
Residents of Wisconsin can also apply for the Chapter 128 Debt Consolidation program, which allows them to settle unsecured debt with a repayment plan lasting for three years. Advantages of the Chapter 128 program include stopping late repayment fees, increases in interest, and wage garnishment.
Consolidation loans are most effective if you have a good credit score (above 700). Scores above 670 are also acceptable, while scores below that can make it difficult to secure a loan when it comes to debt consolidation in Wisconsin. Once you're on a debt consolidation plan, it's a good idea to limit your credit card use to avoid getting back into debt.
Once your loans are consolidated, you’re left with a single low-interest loan to pay off over a specified period of time. During debt consolidation, be aware of lenders who have predatory terms of low-interest rates in the first few months and then change to high-interest rates later in the program.
In debt settlement, the goal is to settle your debt for less than the total amount owed to your lenders or creditors. To complete this process, you can contact creditors or collection agencies on your own or work with a debt settlement company that negotiates on your behalf for a reduced payoff to clear your debt.
If you work with an organization, you'll make an affordable monthly payment into an account managed by the company. The organization then pays your debt directly to the lender, collecting a fee for administering the account and securing the settlement.
Here are the general steps typically involved in the debt settlement process in Wisconsin:
- Assessment of the debt
- Contact creditors
- Offer a settlement
- Completion of the settlement
Debt settlement can be a complex and time-consuming process, and it's important to work with a reputable debt settlement company to ensure the best possible outcome.
Credit counseling works when a certified credit counselor advises you on the best alternative to handle your personal debt. Wisconsin credit counselors are trained in debt management, consumer credit, and budgeting.
Credit counselors offer free consultations on how to budget and pay off your debts. They’ll also help you navigate your credit report and determine your best course of action based on your score. Both nonprofit and private organizations offer credit counseling services for free or at a low cost.
Bankruptcy is often the last step toward debt relief because it damages your credit report for up to 10 years. The bankruptcy process works by liquidating your assets to pay your creditors or coming up with a repayment plan using legal direction from the court system.
To qualify for Chapter 7 bankruptcy in Wisconsin, you must have an income less than the state’s median of $33,327, while Chapter 13 allows you to keep your assets and come up with a repayment plan that can last for 3 to 5 years. In Chapter 13, unsecured debt like credit card debt is cleared last.
You can file for bankruptcy in Wisconsin's western or eastern district bankruptcy courts. Your creditors have a 6-year window to file for a court hearing since the statute of limitations in the state ranges from 2 to 6 years, depending on the case. If you’re unsure of the bankruptcy case to file, consider asking for legal advice from a bankruptcy attorney.
To receive debt forgiveness, you'll need to qualify for a program offered through a public or private agency. Typically offered by government organizations at the federal and local level, debt forgiveness cancels some or all of your debt if you meet the requirements of the program.
Common types of debt that qualify for forgiveness include credit card debt, payday loans, tax debt, mortgage, and student debt loans. You must qualify for a special program to be considered for debt forgiveness.
Debtors who get their debt forgiven pay zero fees to lenders, but they must file the amount of debt forgiven as income tax with the IRS. Ideally, lenders can forgive all or part of the loan or credit owed by borrowers.
Debt and Financial Hardship Resources
In Wisconsin, there are debt and financial hardship resources that help low-income or needy families provide for their basic needs, including affordable housing solutions, food, and healthcare services. They include the following:
Temporary Assistance Programs
Temporary assistance programs in Wisconsin include the Wisconsin Work (W-2) Program run by the federal government under the Department of Health and Human Services.
To qualify for the W-2 program, your household income must be 115% less than the poverty level. Other requirements include having a child less than 18 years, being pregnant, or heading a household when you’re less than 18 years old. The program assists you with financial help and support services, including employment preparation services.
Other temporary assistance programs for needy and low-income families include noncustodial parent services, job access loans, emergency assistance funds, Transform Milwaukee jobs, and transitional jobs programs.
State Health and Human Services
There are many programs dedicated to maintaining a healthy population in Wisconsin, especially for needy and low-income families, including the following:
- BadgerCare Plus is a healthcare coverage program curated for Wisconsin residents in need of assistance. The program uses income levels to determine your eligibility for the program.
- FoodShare Wisconsin is a supplemental nutrition assistance program helping low-income families buy food to maintain a healthy body. The program uses 200% and 130% household income limits to determine how much to allocate to the families.
- The IRIS Program helps the disabled and older adults in Wisconsin live their lives.
- Wisconsin's SeniorCare Program helps eligible 65-year-olds and above pay for prescription medicines and vaccines.
- Dementia Care is a long-term care program offered to the older population that suffers from dementia.
- Family Care is a Medicaid long-term healthcare program suitable for people with disability, people with lasting chronic illnesses, and older citizens.
Childcare programs in Wisconsin include the following:
- Children’s Long-Term Support Program: This program aims to provide support for disabled children and their families to ensure that they live the best life they can in a community setting.
- Wisconsin Shares Childcare Subsidy Program: This program is offered for working families struggling to meet their children’s needs. The program offers support by covering part of the monthly costs associated with child care.
Shelters for the Homeless
Wisconsin has several homeless shelters and transitional housing opportunities available for the homeless in the state. These homeless shelters experience long waiting lists. Therefore, you need to confirm their availability before getting there.
Free Transportation Services
The state of Wisconsin has a County Elderly and Disabled Transportation Assistance program that gives counties financial aid to offer transportation services to the elderly and the disabled.
Also, its residents can access a free Non-Emergency Medical Transportation service, so they continue with their medical appointments.
Find Debt Relief in Wisconsin
With thousands of five-star reviews across Trustpilot and Google, our company is a reputable option for debt relief in Wisconsin. We can help you pursue a legitimate debt relief option. Take advantage of our free debt relief consultation today!