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Michigan Debt Relief Guide

Michigan suffered a one-two punch caused by COVID-19. First, a massive drop in demand for manufactured products significantly cut employment. Then the chip shortage further curtailed production in a state where auto manufacturing accounts for a major sector of employment.

But the state has always been resilient, and now the outlook for “The Great Lakes State” is looking better. Both production and demand for manufactured goods are on the rise.

However, many residents who held lower-wage and lower-skilled jobs are still unemployed. The retail and entertainment sectors are hard-hit. Inflation is hurting many residents as well.

“The situation is challenging for Michiganders,” says Gary Herman, President of Consolidated Credit, “The state’s service sectors are still suffering, and many households continue to struggle to regain their pre-pandemic income. Pair that with the inflation we’re seeing nationwide, and it’s a recipe for credit card debt.”

Consolidated Credit Helps Michigan Residents Reduce Their Total Credit Card Payments by Up to 50%

Consumer debt in Michigan

This chart shows a breakdown of average consumer debt in Michigan, based on the latest report of Household Debt report from the Federal Reserve.

In 2019, 30,696 Michigan residents filed for bankruptcy.

Income and employment in Michigan

Michigan’s pay rates can be good, with an average per capita income of $52,987 and an average median household income of $57,144. The minimum wage will be increasing to $9.87 per hour as of January 1st, 2022, which is slightly above the nationwide average of $8.56 per hour.

Michigan is a right-to-work state, which means workers are not required to join a union or pay membership dues; however, they can join unions if they choose.

Michigan saw a spike in unemployment during the first year of the pandemic as manufacturing slowed down. The good news is that in 2021, even with a worldwide chip shortage, Michigan’s auto industry has led the state’s recovery.

Michigan is also one of the top five states for FDI (Foreign Direct Investments). Global companies have invested nearly $12 billion in Michigan, creating over 36,000 jobs.[1]

This demand for workers is good for Michigan residents. New employment opportunities can help individuals and families improve their financial situation.

If you are unemployed in Michigan, your unemployment insurance will last 26 weeks.

Apply for unemployment benefits in Michigan »

Banking and taxes in Michigan

Michigan residents have a low, flat-rate state income tax of 4.25% making their finances a little easier, and a sales tax of 6%. Unlike many states, Michigan does not have a tax-free holiday or weekend.

Michigan residents are also less likely to bank than the average American. The percentage of unbanked residents—those without a checking or savings account stands at 5.7%, just above the national average of 5.1%

Michigan housing market

With a median house price of just $208,337, homeownership in Michigan is far more affordable than in many other states. Listings still get top dollar, but the market is cooling down, and there are fewer multiple offers.[2]

The median home price in Michigan is $208,337.[3] In metro Detroit, prices are higher, with a median sales price for homes and condos at $236,700.

The homestead exemption in Michigan is $30,000. There are also other deductions for residents above 65 and disabled residents.

  • 71.2% of Michigan residents are homeowners
  • Average mortgage payment: $1,279
  • Median rent payment: $871

Michigan has help for renters who are having difficulty making their rent payments. Homeowners in Michigan can also get help with their mortgage payments, and an online portal is currently under development.

Talk to a HUD-certified housing counselor to get help with the housing challenges you’re facing.

Retirement in Michigan

US News and World Report put six Michigan cities on their top 150 cities for retirees. Ann Arbor, home to the University of Michigan, was ninth.

Low living costs and a low poverty rate for seniors can make retiring in Michigan a good choice. Michigan is also tax-friendly to retirees with no Social Security tax. Pensions and withdrawals from retirement accounts are only partially taxed.[4]

You’ll need an average of $865,000 to retire comfortably, but the average retirement savings is only $419,201. The average resident retires at age 62. About 17% of retirees rely on Social Security for at least 90% of their income.

Average Michigan insurance premiums

Michigan residents enjoy mostly lower than average rates for protecting their homes, vehicles, and health with insurance.

Homeowner’s insurance rates are lower than the national average of $1,631. The average Michigan homeowner’s insurance premium is only $1,176 per year.

Health insurance premiums are also low compared to national averages. Michigan’s annual health insurance premium is $4,828, well below the national average of $5,936.

However, Michiganders do pay higher rates for auto insurance. The average driver has an auto insurance premium of $2,112 per year, slightly higher than the national average of $1,413.

Helpful resources for Michigan residents facing hardship

Food insecurity

RegionFood BankPhone NumberAddress
Central MichiganMason Food Bank(517) 676-2563118 W. Oak Street Mason, MI 48854
Central MichiganFood Bank Council of Michigan(517) 485-1202330 Marshall Street Suite 103 Lansing, MI 48912  
Central MichiganFood Bank of Eastern Michigan(810) 239-44412300 Lapeer Road
Flint, Michigan 48503
Central MichiganHolt Community Food Bank(517) 694-93072021 Aurelius Road
PO Box 577, Holt, MI 48842
Central MichiganGreater Lansing Food Bank(517) 853-78005600 Food Court
Bath, MI 48808
Central MichiganRoscommon County Food Pantry(989) 202-4889725 S Loxley Rd
Houghton Lake, MI, MI 48629
Metro DetroitGleaners Community Food Bank of Southeastern Michigan(866) 453-26372131 Beaufait
Detroit, MI 48207
Metro DetroitNourishing Gardens Food Bank(734) 713-771524831 Sumpter Road
Belleville, MI 48111
Metro DetroitJoan & Wayne Webber Distribution(586) 758-6815  24162 Mound Rd
Warren, MI 48091
Metro DetroitBountiful Harvest  (810) 360-0271290 E Grand River Rd, Brighton, MI 48116
Southern MichiganSouth Michigan Food Bank269-964-36635451 Wayne Rd
Battle Creek, MI 49037
Southern MichiganBrooklyn Food Pantry  (517) 612-8771171 Wamplers Lake Rd, Brooklyn, MI 49230
South-Central MichiganBranch Area Food Pantry  (517) 279-096622 Pierson St. Coldwater, MI 49036
South-Central MichiganJackson Community Food Pantry(517) 962-1005  701 Greenwood St.
Jackson, MI 49203
South-East MichiganOpen Hands Food Pantry  (248) 546-1255St. John’s Episcopal Church 26998 Woodward Avenue at 11 Mile Royal Oak MI 48067
South-East MichiganNeighborhood House Food Pantry(248) 656-49041720 South Livernois Road
Rochester Hills, MI, 48307
United States
West-Central MichiganFeeding America West Michigan(616) 784-3250864 West River Center Drive NE, Comstock Park, MI 49321

Veterans

As of 2019, Michigan was home to 549,526 Veterans. These resources are available to help veterans facing unemployment, homelessness, and other hardships.

Veteran Resources:
National crisis hotline: (800) 273-8255

Department of Veterans Services
Michigan Veterans Affairs Agency
3423 N. Martin Luther King Jr. Blvd.
Bldg 32
Lansing, MI 48906
800-MICH-VET (800-642-4838)
[email protected]

Find a Veteran service office in your area »

Helpful employment resources for Veterans:

How Consolidated Credit helps Michigan residents find debt relief

In 2021, Consolidated Credit provided free credit counseling to 4,539 Michigan residents. Of those, 197 went on to consolidate their debt with our help through a debt management program (the average amount of debt enrolled was $9,211). The others received a free debt analysis and complementary budget evaluation, and they were directed to the right solution for their situation to get out of debt as quickly as possible.

We’d also like to congratulate the 255 Michigan residents that got debt-free last year with the help of Consolidated Credit!

Relief options to consider if you’re in debt in Michigan

A debt consolidation loan is an unsecured personal loan that you get to pay off credit cards and other existing debts. You need good credit to qualify for the lowest interest rate possible. That low rate helps lower your total payments so you can get out of debt faster, even though you may pay less each month. So, this is a good solution for Michigan residents with a high credit score.

A home equity loan or home equity loan of credit (HELOC) is a debt solution that’s only available to Michigan homeowners. If you have equity available in your home, you can borrow against that equity and use the funds to pay off your debt. However, this can be a risky option for paying off credit card debt if you are living paycheck-to-paycheck. Home equity lending products put consumers at risk of foreclosure if they can’t make the payments. If you are considering borrowing against your home, call 1-800-435-2261 to speak with a HUD-certified housing counselor to make sure this is a safe option for you.

Nonprofit credit counseling services like those provided by Consolidated Credit help consumers identify the best solution for getting out of debt. This is a free service. Michigan residents can get a confidential debt and budget evaluation from a certified credit counselor. Then the counselor will explain options that are available to each person and recommend the best course of action based on an individual’s needs and goals.

If a Michigan consumer cannot get out of debt effectively on their own but has the ability to repay everything they owe to avoid bankruptcy, a debt management program is often the best solution. You enroll in the program through a credit counseling organization. They help you find a monthly payment you can afford and then work with your creditors to reduce or eliminate interest. Qualifying residents can get out of debt in 36-60 payments.

Debt settlement allows Michigan residents to get out of debt for a percentage of what they owe. You can settle debt on your own and negotiate with individual creditors and collectors or enroll in a debt settlement program to get professional help. This does cause credit damage. Each debt settled will be noted on your credit report for seven years from the date the account first became delinquent. However, it can be a viable debt relief option for avoiding bankruptcy when you are completely overwhelmed with debt.

If you’re curious how we can help you, below you will find a few case studies from clients that we’ve helped in Michigan residents. If you’re facing challenges with debt, call us at  (844) 276-1544  to receive a free debt and budget evaluation from a certified credit counselor.

Ready to see if Consolidated Credit can help you, too? Talk to a certified credit counselor for a free debt and budget evaluation.

Case Study

Angel from Mount Temperance, MI

“This has been such a great help. I’m rebuilding my life without debt. ”

Where she started:
  • Total unsecured debt: $13,248.00
  • Estimated interest charges: $7,822.43
  • Time to payoff: 14 years, 5 months
  • Total monthly payments: $529.92
After DMP enrollment:
  • Average negotiated interest rate: 0.00%
  • Total interest charges: $0.00
  • Time to payoff: 5 years, 5 months
  • Total monthly payment: $204.00
Time Saved

9 years

Monthly Savings

$325.92

Interest Saved

$7,822.43

Case Study

Jorge from Taylor, Mi

“The monthly interest amount was reduced to a small fraction of what I was paying before. Thanks! ”

Where he started:
  • Total unsecured debt: $53,937.00
  • Estimated interest charges: $31,477.00
  • Time to payoff: 15 years, 3 months
  • Total monthly payments: $2,157.48
After DMP enrollment:
  • Average negotiated interest rate: 2.46%
  • Total interest charges: $2,640.90
  • Time to payoff: 4 years, 10 months
  • Total monthly payment: $985.00
Time Saved

10 years, 5 months

Monthly Savings

$1,172.48

Interest Saved

$28,836.10

Case Study

Kenneth from Belleville, MI

“My experience with Consolidated Credit has been exceptional. All of my expectations have been met and I am so thankful! ”

Where he started:
  • Total unsecured debt: $64,722.00
  • Estimated interest charges: $37,947.00
  • Time to payoff: 16 years, 5 months
  • Total monthly payments: $2,588.88
After DMP enrollment:
  • Average negotiated interest rate: 6.50%
  • Total interest charges: $10,373.46
  • Time to payoff: 4 years, 8 months
  • Total monthly payment: $1,336.00
Time Saved

11 years, 9 months

Monthly Savings

$1,252.88

Interest Saved

$27,573.54

Want to know if Consolidated Credit can help you, too? Get a free, confidential debt and budget analysis now.