DebtHammer's free guide to debt relief details several options for Michigan residents, including hardship programs, consolidation and other financial resources.

Debt Relief in Michigan

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Michigan is home to around 10.05 million people, approximately 13.1% of whom live below the federal poverty guidelines. In comparison, the current population of the USA is 331.9 million and the official poverty rate is 11.6%.

The average debt per capita in Michigan is $44,370 — not much lower than the annual mean wage of $55,160. Because of this, it’s no surprise that many residents struggle to pay off debt and make ends meet.

If you’re living in Michigan and need debt relief or some other form of economic assistance, here’s everything you need to get started.

Are you eligible for debt relief?

If you’re a Michigan resident, DebtHammer may be able to help.

Michigan debt statistics

Many Michigan residents face high amounts of consumer debt, unemployment, or even poverty. Here are some debt and credit-related statistics in the state:

  • Average household debt: $44,370
  • Average student loan debt: $36,116
  • Average credit score: 719
  • Median mortgage payment: $1,279
  • Bankruptcies: 4,155
  • Personal income/Annual mean wage: $55,160
  • Child poverty: 17.6%
  • Unemployment: 4.3%

Debt relief options for Michigan residents

If you have a lot of consumer debt and need debt relief in Michigan, here are your options:

  • Debt settlement: The process of debt settlement involves working with your creditors to reduce how much you owe on an unsecured debt.

READ MORE: Best debt settlement companies in your area

  • Debt consolidation loans: A debt consolidation loan is a loan available to people with good or excellent credit. This loan can combine several debts into one loan, usually with a lower interest rate. This could save you money in interest payments or reduce your monthly payments.
  • Debt management plan: A DMP is a three- to a five-year program that lets you enroll multiple unsecured debts and repay them over time. When done through a nonprofit credit counseling agency, you could get lower interest rates, waive late fees, or set up more affordable monthly payments.
  • DIY plans: A DIY plan is a form of debt settlement that you do without an agency. It involves communicating with creditors and could be helpful if debt collectors are harassing you.
  • Personal bankruptcy: There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Depending on your situation, you could qualify for one of these options to get the debt relief you need. However, bankruptcy should be considered a last resort.

Debt settlement in Michigan

A debt settlement plan could help you pay off different unsecured debts, including:

  • Credit cards or lines of credit
  • Personal loans
  • Old judgments
  • Department store cards
  • Student loans in default

The process of debt settlement takes around two to four years. When successful, you could get your eligible debts settled by 50% or more (after agency fees).

Debt settlement isn’t a guarantee as creditors are not required to accept a smaller amount on debts. However, it could be helpful if you’re:

  • Struggling to make multiple payments each month
  • Can’t keep up with bills
  • Are using expensive short-term loans, credit cards, or cash advance apps for daily expenses

When you go through a debt settlement agency, you’ll typically need to start making fixed payments into a secured account while the agency negotiates with your creditors. Once an agreement is made, the agency will use that money to pay your creditors the settled amount.

Debt settlement does come with some risks. For example, you may be asked to stop making payments on any enrolled debts to increase your odds of success. This could result in late fees and hurt your credit score.

Consider your options carefully before going this route. Also, be aware that the debt settlement industry has many scammers. Check out these warning signs of a scam before agreeing to anything.

READ MORE: How does debt settlement work?

Michigan debt relief companies

If you need debt relief in Michigan, here are some companies operating in the state that may be able to help:

  • GreenPath Financial Wellness: 5397 W Michigan Ave, Ypsilanti, MI 48197; (888) 776-6735
  • Optimal Debt Relief: 141 E Michigan Ave, Kalamazoo, MI 49007; (269) 266-8232
  • Michigan Debt Relief Help: 20300 Superior Rd, Taylor, MI 48180; (313) 992-1820
  • New Era Debt Solutions: With 4.92 out of 5 stars on BBB and an A+ rating, this company offers debt settlement in Michigan. Their headquarters are located at 330 Wood Rd., Suite B Camarillo, CA 93010.
  • InCharge Debt Solutions: BBB accredited with an A+ rating, this company offers debt solutions and is licensed to provide debt settlement services in multiple states, including Michigan. Their main address is 5750 Major Blvd Suite 300 Orlando, FL 32819-7971

Debt settlement attorneys

Here are some top-rated debt settlement attorneys in Michigan:

READ MORE: Debt settlement attorneys: Do you need one?

State hardship programs

Michigan offers many resources and programs to residents facing economic hardship. Some of these programs include cash assistance for rent, mortgage, and utility bill payments. Others help with childcare, job training, and healthcare expenses.

  • Michigan Rental/Housing Voucher Programs: The MSHDA offers multiple programs to subsidize housing costs through various loans and low-income tax credits. This includes the Emergency Housing Voucher Program, Veterans Administration Supporting Housing program, and project-based vouchers. The MSHDA also has resources for those looking for rental housing.
  • Single Family Housing Repair and Grants Program: The Section 502 Direct Loan Program helps low- and very low-income households find safe and affordable housing in certain rural areas. Eligible individuals may also receive payment assistance to temporarily lower mortgage payments.
  • Low Income Home Energy Assistance Program: LIHEAP is a federal program that helps with energy costs and improves energy efficiency. The Michigan Energy Assistance Program (MEAP) does this as well.
  • Utility Assistance Program: For residents who need help with home energy, internet, or telephone bills, Michigan offers multiple utility assistance programs. This includes the State Emergency Relief Program (for energy-related expenses and home repairs), MEAP, and the Home Heating Credit.
  • Children’s Health Insurance Program: CHIP is another federal program working with uninsured or underinsured minors. In Michigan, a similar health insurance program exists for eligible working families, MIChild. MIChild covers medically necessary procedures and services, including family planning, dental, doctor visits, lab tests, hospice care, and mental health services.
  • Children’s Special Healthcare Services (CSHCS): CSHCS works with Michigan families with children. It can help with special needs care, health planning, and more.
  • Cash Assistance Program for Women and Children: Pregnant women, low-income households with minors, and adults with disabilities may be eligible for short-term cash assistance.
  • SNAP – Supplemental Nutrition Assistance Program/Food Assistance: Along with food banks, Michigan offers SNAP benefits to low-income households. The benefits amount depends on things like income and household size.
  • Michigan Combined Application Project: MiCAP is designed to help individuals receiving SSI (but no other income) through additional food benefits.
  • WIC: Women, Infants & Children is a federally-funded program that helps eligible families through food and nutrition assistance. It also works in conjunction with Project FRESH, the Farmer’s Market Nutrition Program.
  • Organization for Refugees & Immigrants: Refugees in Michigan can find help resettling or integrating into the state through this program.

For more programs, including those for job search training or employment, head to

Food assistance

In Michigan, about one in nine people — or 1,150,150 residents — are facing hunger or food insecurity. An estimated 297,150 this number are children.

The state has certain food and nutrition programs, like Supplemental Nutrition Assistance Program (SNAP), but these aren’t always enough. That’s where food banks and pantries come in.

Michigan has several food banks throughout the state to help those facing hunger on a daily basis. Some of the biggest ones include:

Debt collection laws in Michigan

Like the rest of the United States, Michigan follows the federal Fair Debt Collection Practices Act (FDCPA) when it comes to debt collection. The state also has its own legislature regarding debt collection — Regulation of Collection Practices (Act 70 of 1981) 445.251 and 445.252. According to this law, debt collectors:

  • May not communicate with borrowers in a misleading manner.
  • Use printed forms or seals belonging to a government agency or that simulate the judicial process.
  • Make inaccurate, misleading, or false statements to the borrower about the debt.
  • Use harassment, profanities, threats of violence, or other abusive methods to collect a debt.
  • Communicate with the borrower via certain methods (ex. postcard)

The act also defines key terms, such as:

  • Collection agency
  • Communicate
  • Consumer or debtor (ie. borrower)

Income and employment in Michigan

The annual mean wage per Michigan resident is $55,160. When it comes to job creation, the state ranks 34th with 110,700 new jobs.

In 2020, Michigan’s unemployment rate rose to around 10%. Since then, it’s been steadily dropping and is now 4.3%.

Michigan has Freedom to Work laws. This means an employer cannot require an employee to join a union or pay union dues in order to work. It does not prevent employees from joining a union, however.

The state is also an employment-at-will state. This basically means an employee can leave their job at any time with or without notice. However, it also means an employer can terminate an employee with or without notice or cause.

Michigan employees are protected against certain things, however. For example, they cannot be fired for discriminatory reasons like marital status, disability, race, religion, or age (if they’re over 40 years old).

How to apply for unemployment benefits in Michigan

Residents seeking unemployment insurance benefits can apply online through the Michigan Web Account Manager system: Alternatively, they can apply via phone at (866) 500-0017.

To get started with an online application, you’ll need to either create or sign in to an account. Setting up an account is easy — simply follow the prompts and it should only take a few minutes.

Before filing either online or via phone, you may need to set up an appointment. However, you can apply any day of the week at any time.

If you want to file a new benefits claim and have already registered for an account, you must verify your identity. You’ll also need to provide some information, such as:

  • Full name
  • Social Security Number
  • Driver’s license or state ID information
  • Physical address
  • Contact information
  • Whether you’re claiming dependents
  • Whether you want state and federal taxes withheld
  • Claim date
  • Work history information (ex. Employer’s Account Number, dates of work, 
  • Preferred payment method
  • Preferred correspondence method

With an account, you can monitor existing claims, certify for benefits biweekly, submit work search information, and more.

For more information about filing for unemployment benefits in Michigan, head over to the state’s official website on the matter.

Banking and taxes in Michigan

Michigan’s individual state income tax is 4.25%. Local income tax may also apply in select jurisdictions. Certain exemptions and credits apply, such as:

  • Mortgage foreclosure or repossession
  • Home heating and sharing housing credits
  • Homestead property tax credit

Military personnel, students, and Native Americans may also qualify for special filing.

Besides income tax, Michigan has a 6% state sales tax. There is no local sales tax, however.

As for banking, around 5.7% of residents are unbanked — ie. they don’t have a checking or savings account. This is slightly lower than it was in past years, but it’s still an issue for many residents.

According to a press release last year, unbanked or underbanked residents end up paying an average of $3,000 annually in fees for financial services like:

  • Money orders
  • Bill pay services
  • Third-party debit cards
  • Etc.

Unbanked individuals are also more likely to end up taking out predatory payday loans or using cash advance apps or credit cards for their financial needs.

Michigan housing market

An estimated 4,590,528 Michigan residents (or 72.2%) are homeowners, one of the highest percentages in the country. The average home costs about $135,845 and has a median mortgage payment of $1,279. This is quite a bit lower than the national median home price of $272,500.

In Michigan, the median rent payment is about $826 a month for a two-bedroom home. The exact cost depends on things like location and property type and size, however.

The governor of Michigan, Governor Whitmer, established its Michigan Homeowner Assistance Fund (MIHAF) as part of the American Rescue Plan Act of 2021. This program is designed to help homeowners facing delinquency, foreclosure, defaults, displacement, or other related hardships.

To apply for MIHAF, you’ll need to meet certain eligibility requirements. For example, your household income must be 150% less than the area median income. You must also own and occupy the home as your primary residence.

If found eligible, you could be eligible for up to $25,000. For more information or the application, head to the MIHAF official website.

Retirement in Michigan

If you’re a Michigan resident, you need around $864,929 to be able to retire comfortably, according to the World Population Review. However, the average resident only has about $439,568 set aside for retirement.

Average Michigan insurance premiums

The average cost of full coverage car insurance in Michigan is $2,345 annually. A policy with minimum coverage is about $946 a year. This is several hundred dollars higher than the national average.

As for homeowners insurance, the average Michigan resident pays around $2,607 a year for a typical home.

Payday lending status in Michigan: Legal

Payday lending is legal in Michigan, though lenders have to adhere to certain regulations. Here’s what a typical payday loan looks like in the state:

  • Maximum loan amount: $600
  • Maximum Interest Rate (APR): 407% on a 14-day $100 loan
  • Minimum loan term: N/A
  • Maximum loan term: 31 days

Statute of limitations on debt in Michigan

The statute of limitations on debt in Michigan is typically six years. This means that a creditor can attempt to collect a debt for this amount of time after the date of the most recent payment. If a creditor gets a judgment, however, they can continue to pursue the account indefinitely.

With that in mind, here’s the typical statute of limitations on different types of common debts:

  • Medical debt: 6 years
  • Credit card: 6 years
  • Auto loan debt: 4 years
  • State tax debt: 6 years

Help for Veterans

Around 568,000 Veterans live in Michigan. For those seeking help in the face of unemployment, homelessness, or other financial hardships, the Michigan Department of Military and Veteran Affairs can help.

Facilities in Michigan

If you need to locate a Michigan VA facility, there’s a state directory you can check. Additionally, here are some of the biggest Veterans Health Administration offices in the state:

  • Veterans Health Administration: 24 Frank Lloyd Wright Drive, Lobby L, Ann Arbor, MI 48113-4002
  • John D. Dingell VA Medical Center: 4646 John R St, Detroit, MI 48201; (313) 576-1000
  • Wyoming VA Community Based Outpatient Clinic: 5838 Metro Way, Wyoming, MI 49519; (616) 249-5300
  • Pontiac VA Clinic: 44200 Woodward Ave # 208, Pontiac, MI 48341; (248) 332-4540
  • VA Detroit Regional Office: 477 Michigan Ave 12th floor, Detroit, MI 48226; (800) 827-1000
  • Lansing VA Clinic: 5656 S Cedar St, Lansing, MI 48911; (517) 267-3925
  • Grand Rapids Vet Center: 2050 Breton Road, Southeast Suite 100 Grand Rapids, MI 49546; (616) 285-5795

Employment resources for Veterans

Through Michigan’s Labor and Economic Opportunity, you can find various employment services for Veterans and their spouses throughout the state. Along with this, here are some organizations to check out for help with employment or job training:

  • CareerOneStop is a one-stop shop for job resources, job searching, and career advice.
  • helps eligible Veterans and spouses find civilian employment.
  • offers online job fairs and job resources.
  • Helmets to Hardhats helps Veterans move into the civilian workforce in construction.
  • Hiring Our Heroes works with Veterans to help them network with companies.
  • My Next Move is a large resource with job-related information and opportunities in the civilian workforce.
  • Warriors to Work connects eligible veterans with potential jobs and companies. 

The bottom line

Michigan debt relief is available to residents of the state, including veterans, those with disabilities, and low-income families or individuals. The state also has several options when it comes to paying off or getting a handle on debt. This includes things like debt settlement, credit counseling, and debt management plans. Consider your options and find what works best for you.


How long can a debt be collected in Michigan?

A creditor can legally try to collect a debt for four to six years, depending on the debt type. State tax debts can be collected for up to six years. If a creditor obtains a judgment, they could continue to try to collect the debt beyond this period.

When does the statute of limitations begin in Michigan?

The statute of limitations on most debts begins on the date of the most recent payment or activity on the account.

Am I responsible for my spouse’s debt if I get divorced in Michigan?

Michigan follows equitable distribution property division laws, meaning debts incurred during marriage are divided fairly (not necessarily a 50/50 split) upon divorce. If a spouse incurred a debt before marriage, it could still be divided between both parties.

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