In a Nutshell

With its proximity to our nation’s capital and bustling urban centers like Annapolis and Baltimore, Maryland offers opportunities for both work and play. Residents enjoy a median household income of $98,461, one of the highest in the country.

However, along with all this wealth, residents of the Old Line State still carry high levels of credit card debt and an elevated debt-to-income ratio. As consumer debt rises across the state, Maryland residents need solutions to overcome financial difficulties.

Read on to learn more about the ways you can find debt relief in Maryland.

Your Options To Get Out of Debt in Maryland

Credit Counseling

For sound advice on how to overcome debt and manage your finances, a credit counseling program is a good place to start.

How It Works in Maryland
Many credit counseling agencies offer services for Maryland residents looking to start the debt-relief process. Once you enroll in a nonprofit or private program, you’ll work one-on-one with a certified credit counselor.
Pros
Credit counselors offer professional insight into your debt situation, discussing your credit scores and history. They can help you make an effective plan to move forward and pay off your debts.
Cons
While these programs offer helpful advice, they don’t directly reduce your balances. It’s still up to you to choose the best program to pay off your debt and implement it through smart and consistent choices. If you lack the motivation to follow their suggestions, you’ll still lack the financial freedom you desire.
Cost
Credit counseling is usually cost-effective and includes a small enrollment fee. Low-income Maryland residents may even qualify for reduced-cost or free services.
Stats
At an average of 2.05 times their annual income, Maryland residents have one of the highest debt-to-income ratios in the country, proving that debt relief options are becoming a necessity throughout the state.
Resources
Learn more about credit counseling and how it can help you plan to overcome debt.
Find a local credit counselor through the Financial Counseling Association of America.

Debt Management

Debt management plans (DMPs) handle the responsibility of making your monthly bill payments.

How It Works in Maryland
After working with a certified credit counselor, some Marylanders opt to enroll their outstanding balances into a debt management program. Under a DMP, consumers send a single monthly payment to the DMP organization, which then distributes the appropriate payments to creditors on their behalf.
Pros
Maryland residents who sign up for a DMP are less likely to make a late payment or miss a payment altogether. They can also organize debts into a single monthly payment, which can be easier to keep track of and budget for each month.
Cons
DMPs typically require you to close most of your current credit card accounts to avoid further spending while you work to pay down your existing debt. You’ll also pay a modest fee for each account the organization manages for you.
Cost
DMPs usually charge a startup fee ranging from $30-40. Monthly fees can cost around $30 for each active account you enroll in the program.
Stats
Maryland residents carry an average consumer debt of $131,948, one of the highest in the country.
Resources
Learn more about debt management and how it can help you.

Debt Consolidation

Consolidating debt is a kind of DIY approach to paying off balances.

How It Works in Maryland
Residents from the Old Line State can choose from two main options to consolidate debt. The first is to open a new credit card account with a no-interest balance transfer promotion available in the first 12-18 months after starting the account. Next, you’ll transfer other outstanding small-to-medium-sized credit card balances to that account to save interest.
Another choice is to take out a debt consolidation loan big enough to pay off your current unsecured debts. This method works best for Maryland consumers with fair to good credit scores because stronger credit makes banks more willing to loan money at lower (and preferably fixed) interest rates.
Pros
Zero-interest balance transfer credit cards give you some breathing space to start paying down small to medium-sized debts without adding interest and other fees to your payments each month.
A debt consolidation loan can be an effective tool for organizing your debts into a single monthly payment, often at a much lower interest rate than you’re paying now. Also, with a fixed interest rate and repayment term (typically 24 to 72 months), you’ll know exactly when you’ll have your balances paid off.
Cons
When you open a zero-interest balance transfer credit card, you’ll only have a small window to pay off your debts until the card reverts to its original APR percentage for purchases and cash advances. If you don’t eliminate your entire transferred balance by then, you could be hit with an interest payment as high as 29% on the remaining amount until it’s fully paid off.
Cost
Costs for a zero-interest credit card typically include a 3%-5% charge for the convenience of transferring your initial balance. However, if you don’t make a plan to pay off your debt within the zero-interest introductory period, you could end up paying substantially higher interest charges on any remaining balance(s).
Your costs for debt consolidation loans depend largely on your original debt balance and the interest rate you lock in on your new loan.
Stats
Maryland residents carry a strong average credit score of 716, making it easier for many to secure loans at a lower interest rate.
Resources
Brad Reichert, the founder and managing director of Reichert Asset Management LLC, offers more insight into using debt consolidation. “The total cost you will pay for your debt consolidation loan will depend almost entirely on your interest rate, your repayment term, and the amount of any loan origination fees or prepayment penalties you may pay (if any) during the course of your loan,” Reichert says.
“Not surprisingly,” he adds, “the amount of interest you pay will be the largest portion of your cost of borrowing. The longer your repayment term, the lower your monthly payment, but you’ll pay more in total dollars of interest because your balances will remain outstanding for a longer period of time.”
“On the other hand, the shorter your repayment term, the higher your monthly payment will be, but you’ll pay interest on your balance(s) for a much shorter period of time and save more in total interest paid,” Reichert says.

Debt Settlement

Settling debt offers a way to pay off large unsecured balances from items like credit cards and medical bills in a reasonable amount of time.

How It Works in Maryland
Maryland residents who enroll in a debt settlement program connect with experts who negotiate a reduced lump-sum payment with creditors in return for waiving or forgiving the remaining balance.
Pros
Settling your unsecured debts allows you to pay them off faster and typically at a greatly reduced amount, sometimes up to 50% of your total debt before fees.
Cons
Completing a debt settlement means you stop paying on your debts to put money into a savings account for the lump-sum payoff instead. This makes your credit score drop significantly for a little while until you start building up your credit profile and FICO scores once your debts are settled.
Also, debt settlement does not allow you to receive relief for secured debts such as automobile and mortgage loans. Only unsecured debts, like credit cards, personal loans, medical bills (and similar debts), and private student loans are eligible for settlement.
Cost
While you won’t pay anything upfront, debt settlement companies charge fees ranging from 15-25% of your total enrolled debt.
Stats
Maryland is third in the nation for the highest average credit card debt per person. Residents of the Old Line State owe an average of $8,626 in outstanding credit card balances.
Resources
Read more about debt settlement and how it can help you overcome large debt balances.

Bankruptcy

Baltimore residents should consider bankruptcy a last resort after exhausting other ways to relieve and reduce their debts.

How It Works in Maryland
Declaring bankruptcy is a long and involved process that uses the court system to direct and discharge debt payments. Maryland consumers usually file Chapter 7 or Chapter 13 bankruptcy, depending on how they want to manage their finances.
It’s a good idea to speak with a bankruptcy attorney before starting the process with a regional bankruptcy court to ensure your case goes as smoothly as possible and you get the best debt relief results.
Pros
After going through the bankruptcy process, your debts will be absolved or paid off, and you’ll have a clean financial slate.
Cons
Although it does give you a fresh start, bankruptcy negatively impacts your credit score and history for up to 10 years, making it harder to secure new loans, sign a lease to rent a home, or make big purchases on credit.
Cost
Attorney fees can soar up to nearly $5,000 over the course of your bankruptcy proceedings, depending on the attorney you choose to help you through the process. You’ll also owe court fees for filing documents with the state.
Stats
A total of 9,610 Maryland residents filed for some type of bankruptcy in 2023.
Resources
Read the answer to the question many Marylanders ask: “What is life like after bankruptcy?”

What You Need To Know About Debt in the State of Maryland

Statute of Limitations on Debt Collections in Maryland

Maryland’s Statute of Limitations on Debt Collections offers time limits that mostly favor consumers. This means creditors can only legally pursue consumers for a brief period of time if they don’t pay their debts. While debts don’t ever disappear, the statute of limitations allows consumers more time to pay them off without the fear of legal consequences and court costs.

Here’s a look at Maryland’s Statutes of Limitations by type of debt:

Type of Debt Agreement Length of Time Collectible
Written Contracts3 years
Promissory Notes (mortgages)12 years
Open-Ended Accounts (credit cards)3 years
Oral Agreements3 years
Medical Debt3 years

Student Loan Forgiveness in Maryland

Maryland offers loan repayment assistance to medical professionals who meet program qualifications based on credentials and length of service. These programs offer help to doctors, nurses, and other medical staff.

Resources for Financial Assistance in Maryland

During the COVID-19 pandemic, Maryland stimulus checks helped residents get back on their feet. Now that those have ended, there are still other programs to aid financially struggling residents.

  • Cash Assistance: Maryland offers Temporary Cash Assistance (TCA) to qualifying individuals and Temporary Assistance for Needy Families (TANF) to help struggling residents provide for their children. 
  • Emergency Assistance: The Emergency Assistance to Families with Children (EAFC) program offers cash help in emergency situations. This includes an inability to pay utilities or rent. 
  • Food Assistance: Maryland administers the Supplemental Nutrition Assistance Program (SNAP) to help low-income families buy nutritious food. 
  • Child Care Assistance: Maryland helps low-income families pay for high-quality child care.

Get Professional Help Paying Off Your Debt

Debt relief can be the tool that helps you finally escape overwhelming debt. TurboDebt offers high-rated service and customized debt relief plans so you can regain your financial freedom.

TurboDebt clients also benefit from:

TurboDebt Debt Relief Program Statistics in Maryland

We’ve already helped over 1,200 Maryland clients save 56% of their total debt before fees. Contact TurboDebt today to start your free consultation and find out if you qualify for our top-rated debt relief programs.