How to Get Debt Relief in Michigan

Sarah Edwards | October 19, 2022

Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

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Summary: If you're struggling with debt in Michigan, SoloSuit can help you find the relief you need.

In Michigan, people often struggle with their finances due to rising living costs and unmanageable debt. Paychecks don't seem to stretch as far as they used to, and many people have trouble meeting regular obligations such as rent and car payments.

During the pandemic, Michigan residents struggled with unemployment, with a high of 10% unemployment in 2020. The unemployment rate is currently hovering around 4.9%, including a significant portion of the workforce who cannot provide a regular salary to support families and financial obligations.

Recent data shows that the average Michigan household carries $3,348 in credit card debt. News reports show that rental prices are sky-high, with almost half of renters indicating that 35% or more of their income goes to meeting rent payments.

With these kinds of numbers, it's no wonder that individuals are wondering how to get debt relief in Michigan.

What can I do to reduce my debt in Michigan?

Getting out of debt starts with figuring out how you spend your money. You'll want to get a full picture of your financial situation.

Start by calculating your regular monthly income, and then track your recurring expenses. Recurring costs include rent or mortgage payments, utilities, cellular phone bills, car payments, credit card payments, and food. If you have other expenses, add those to the list too.

There are also a lot of useful resources online and on your phone. There's a free app that you can use to monitor your spending called Intuit Mint. It tracks your expenses and income by linking to your bank and credit cards.

This allows the app to categorize your budget and provides you with user-friendly reports to understand your spending habits.

Once you have established your expenses, it's time to decide what you can cut to increase your end-of-the-month cash flow.

These are the budget items that are enjoyable but not ultimately necessary, such as dining out or new clothes. If you can reduce the amount of money you spend on things you don't need, you'll have more money to pay off debt.

What is the debt snowball method?

One method to pay off debt that is commonly recommended is the snowball method. This involves paying minimum payments on all of your regular bills but selecting one bill that you pay more toward. The amount you can put toward this bill will vary depending on your situation, but you should try to make as large a payment as possible.

Once you've paid off that debt, move to another using the same method. By paying off one debt, you'll get a feeling of accomplishment, encouraging you to work towards paying off the next one. If you can monitor your spending habits and diligently work towards paying off your debt, you'll be able to get rid of it over time.

What if I don't have enough money to pay my credit card bills?

If you find that you're unable to pay your monthly credit card bills after examining your budget, you'll need to figure out another option. There are generally two ways to do this. Either increase your income through a side job or decrease your regular monthly expenses.

If all of your income goes towards the basics of living, such as rent, food, and transportation, you may need to consider downsizing. You can reduce the cost of your rent by moving to a cheaper home.

Similarly, if you are making car payments, consider selling the vehicle and purchasing a used car or relying on public transportation until you become more financially solvent.

If none of these are options, you can consider bankruptcy, debt consolidation, or debt settlement.

How does bankruptcy work?

If you meet certain qualifications, you may be able to file for bankruptcy. Bankruptcy allows you to eliminate most debts through the federal court system.

After your debts are discharged, you'll have a fresh financial start. A Chapter 7 bankruptcy is allowed for those with low income and few assets. Most debts are completely settled under this type of bankruptcy, with no future payments due.

A Chapter 13 bankruptcy may be available for those who can't file a Chapter 7. Under a Chapter 13 bankruptcy, the individual will need to pay off some debts to have the remaining ones forgiven. This type of bankruptcy is often used for those who don't want to give up their property or don't qualify for Chapter 7 because their income is too high.

Can I settle my debts on my own?

There are two other common types of debt elimination programs used by people who owe money and can't manage their bills. These include debt consolidation and debt settlement.

Debt consolidation occurs by taking out a large loan to repay all of your debts and then repaying that single loan over a period of time. Usually, a debt consolidation loan gives you a lower rate of interest on your debt than you would have on your original debts, allowing you to pay off the loan in a shorter amount of time.

Debt settlement involves working with a company that negotiates with your creditors on your behalf to obtain a settlement at a percentage of the amount you originally owed.

Both of these options have proven effective in helping Michigan residents find the debt relief they need.

Use these Michigan debt relief programs

Luckily, the state of Michigan has programs in place for its residents who have fallen on hard financial times. Check out these Michigan debt relief programs to see if you qualify for assistance:

PATH - Partnership, Accountability, Training, Hope: Low-income Michigan residents may qualify for cash assistance. In this program, they will take part in a robust, results-oriented work participation program - PATH. The program features a 21-day assessment period during which barriers to employment are identified and caseworkers work individually with clients to connect them with resources to address these barriers.
MI Bridges: This program offers these 5 helpful resources for Michigan residents: cash assistance, healthcare coverage, food assistance program, child development & care, and state emergency relief.
Low-Income Household Water Assistance Program (LIHWAP): A temporary emergency program to help low-income households pay overdue water and wastewater bills.
State Disability Assistance (SDA): Provides cash assistance to eligible, disabled adults. If you are the caretaker of a disabled person or are age 65 or older, you may also be eligible.

Looking for debt relief? SoloSuit can help!

SoloSuit is a web app that provides a free, downloadable PDF that you can use to prepare a response if you are sued for a debt.

If you're facing a challenging time because of your current financial situation and are being sued for a debt, SoloSuit can help!

After answering a few questions, SoloSuit provides you with a PDF that you can print and file with your local court. SoloSuit also offers a paid version that includes an attorney review for those who need additional support.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate