Michigan residents, like many Americans, face significant challenges with debt. If you're struggling with overwhelming debt in Michigan, you're not alone. The average consumer debt in Michigan state (excluding mortgages) was approximately $23,000 per capita in 2023, including credit card balances, auto loans, personal loans, and student loan debt. The average credit card balance stands at $5,900, which is slightly below the national average but still represents a substantial financial burden for many households.
Many Michigan households have a debt-to-income ratio exceeding 40%, which financial experts consider a sign of card debt stress. It means that many people experience unexpected expenses, struggle to make ends meet, and dedicate a large part of their income to repaying their debts.
While Michigan's economy has improved through the years, factors such as income inequality, job market fluctuations, and the lasting impact of the auto industry's transformation continue to affect residents' ability to manage debt. A significant portion of Michigan residents struggle with financial obligations.
If you are a Michigan resident and find that your debt is overwhelming you, talk to ClearOne and find the best debt relief solution for your debt. Several debt relief options can help you keep control of your finances and work towards a debt-free future.
Debt counseling is often the first step in handling financial challenges.
Debt counseling helps people assess how much they earn, how much they spend, and how they can streamline their budget to include debt repayment. Professional credit counselors work with you to assess your financial situation, create a budget, and develop strategies to manage your debt effectively. A credit counselor provides education on personal finance management and can help you understand the pros and cons of various debt relief options.
Debt counseling services are often free or low-cost and can help you understand your financial situation and plan a brighter financial future.
A debt management program involves working with a credit counseling agency to create an affordable and structured repayment plan. It is meant to help you repay your debt in a more manageable way, creating a plan that fits your finances.
Debt management agencies can often negotiate with debt collectors to reduce interest rates and waive certain late fees, making it easier to pay off credit over time.
Debt management programs last three to five years and can be the right choice for those who need guidance and support in managing their finances. Debt management plans don’t reduce the specific amount of money you owe but make monthly payments easy to fit within your budget.
Debt consolidation can simplify your financial situation by combining multiple debts into a single loan, often with a lower interest rate.
If you have multiple credit card debts and other unsecured loans, you can take out a debt consolidation loan and repay all your existing debts with that loan. You then have to repay this single loan until you have repaid your debt in full.
Debt consolidation in the state of Michigan can potentially reduce your monthly payment and make your unsecured debts like credit cards, student loans, and personal loans more manageable. Often, debt consolidation loans come with lower interest rates than credit cards, which means you will pay less in interest on credit cards over the lifetime of the loan.
Debt consolidation is particularly useful for those with good credit scores who qualify for favorable loan terms. It streamlines multiple payments into one and helps you better organize your finances and potentially save money on high interest rates over time.
If you face severe financial hardship, debt settlement programs may be able to provide a viable option. Debt settlement is a valuable debt relief option when credit card debts are overwhelming and you can’t repay them in full with your current income.
Debt settlement involves negotiating with creditors to settle your debts for less than the full amount owed. Debt settlement companies like ClearOne work on your behalf to reach settlement payment agreements that can substantially reduce your debt.
When you decide to settle your debt, you put money aside in a dedicated program savings account. Meanwhile, the debt settlement company you have chosen negotiates with your creditors about the reduction in your overall debt burden. Your debt collectors can agree to settle your debt if they see that they risk losing all the money they have lent you. With debt settlement, they will recoup part of the debt.
When your debtors agree to settle your debt, the settlement payments are made from the money you have been saving in the dedicated program savings account.
Debt settlement negotiations can take up to four years and can have a negative impact on your credit score, while it stays in your credit report for several years as well.
However, for many Michigan residents struggling with debt, the benefits of debt settlement can outweigh the drawbacks. The process may take several months to years to complete, but it offers a path to becoming debt-free that can be faster than other alternatives.
In cases where other debt-relief options are not sufficient, filing for bankruptcy is a last-resort solution. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy can provide a fresh start by discharging certain debts, while Chapter 13 involves reorganizing debts into a manageable repayment plan. With Chapter 7, you may be requested to liquidate part or all of your assets to repay creditors.
Bankruptcy can offer significant debt relief, but it also has long-lasting consequences on your credit history, credit score, and financial future. Bankruptcy should only be considered after carefully evaluating all other debt-relief alternatives.
Overwhelming debts, like credit card debt, can impact people’s well-being. They hamper their hopes and stop them from fulfilling their true potential. When people carry debt, they can’t plan a safe financial future for themselves and their families.
There are many debt relief program options in Michigan, depending on your financial difficulty and the amount of debt you carry. We can assess the best debt relief solution for you based on the type and amount of debt you have and your income.
Contact ClearOne in Michigan for a free consultation. Talk with a ClearOne Certified Debt Specialist at 866-481-1597 to get a free savings estimate. We are experts at analyzing the best collection practices and helping you find debt relief programs that can help you, especially if you feel that debt settlement is the best way forward. Let us help you take the first step toward a more stable future!
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ClearOne Advantage, LLC is a debt settlement company, not a lender, loan broker, creditor, credit services organization, or debt collector. ClearOne Advantage, LLC does not assume or pay any debts; receive, hold or control funds belonging to consumers; or provide bankruptcy, legal, accounting or tax advice. You should review full program terms and conditions before enrolling. To the extent that any aspect of the debt settlement services relies on or results in the consumer’s failure to make timely payments to the consumer’s creditors or debt collectors, the use of the debt settlement services: (1) Will likely adversely affect the consumer’s creditworthiness; (2) May result in the consumer being subject to collections or being sued by creditors or debt collectors; and (3) May increase the amount of money the consumer owes due to the accrual of fees and interest by creditors or debt collectors. Not available in all states. Some third-party fees may apply. C.P.D. Reg. No. T.S. 12-03822.
ClearOne Advantage is not a credit services organization and we do not make any claims regarding improvement of a consumer’s credit scores. Entering into a debt settlement program could adversely affect your credit score.
**Disclaimer - We do not charge upfront fees and you do NOT pay our fee until a settlement has been arranged, you approve the settlement, and at least one payment is made towards the settlement. As each situation is unique, fees and costs vary. Please contact us at 888-340-4697 for a free debt analysis and for complete program details.