Disclaimer: **We are currently unable to enroll clients in Minnesota. Please give us a call or check back again soon for updates.**

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In a Nutshell

Whether you call it the North Star State or the Land of 10,000 Lakes, Minnesota holds a special charm for everyone who calls it home. From pristine wilderness to the unique metropolis of the twin cities, Minnesotans have a lot to enjoy in their home state.

However, even this far-northern state hasn’t escaped the relentless march of increasing consumer debt. Unemployment has continued in an upward trend in the North Star State, and fewer job openings make it difficult for Minnesota residents who want better economic opportunities.

The reality is, as Minnesotans struggle to afford goods and services amidst rising debt and inflation, many feel trapped. Debt relief offers a solution to pay down high balances and regain your financial freedom. Read on to learn more about the top debt relief options for Minnesota residents.

Your Options To Get Out of Debt in Minnesota

Credit Counseling

A certified credit counselor can offer sound financial advice to help you make better choices with your money.

How It Works in Minnesota
Minnesotans enrolling in a credit counseling program can get personal advice about getting out of debt, including suggestions about managing your credit score and history.
Pros
Credit counseling is often a great way to start changing your financial habits. It typically doesn’t cost much and allows you to work one-on-one with a professional who can suggest effective ways to overcome debts.
Cons
While credit counseling provides many great solutions, you’ll still have to act on a credit counselor’s advice to overcome debt struggles.
Cost
Credit counseling is a low-cost solution that some Minnesota residents can access free of charge, depending on their income level.
Stats
Although these programs offer cost-effective advice, more Americans have chosen debt settlement over credit counseling in the past decade.
Resources
Discover more ways credit counseling can help you plan to get out of debt.

Debt Management

Enrolling your debts into a debt management program (DMP) helps you manage monthly payments to multiple creditors.

How It Works in Minnesota
North Star State residents can enroll in private or nonprofit debt management programs through a professional organization. Once you get started, the organization collects a monthly payment from you and distributes the funds to creditors on your behalf.
Pros
DMPs streamline the payment process each month to help you avoid late fees.
Cons
You’ll have to pay a monthly fee for each account enrolled in the DMP. Another drawback with a debt management plan is that you’ll have to close out most, if not all, of your credit card accounts to avoid further spending.
Cost
Debt management companies typically charge $30-40 to enroll plus $20-30 monthly for each enrolled account they administer.
Stats
Minnesotans carry an average consumer debt of $106,981, making DMPs a viable solution to pay down multiple monthly balances.
Resources
Here’s an in-depth guide to debt management and how it can help consumers struggling with debt.

Debt Consolidation

Consolidation involves two DIY options to alleviate debts.

How It Works in Minnesota
Minnesotans with unpaid credit card balances and high-interest payments may benefit from moving balances to a zero-interest card. Once the funds are assigned to the new card, you can put more money toward paying off significant balances without the added interest costs.
Another option for Minnesota residents is to take out a debt consolidation loan. You’ll need to secure a large, low-interest loan to cover all current balances. Once you sign for the loan, you’ll pay off your current debts and start making payments on the new loan instead.
Pros
A zero-interest balance transfer credit card eliminates all extra fees so that you can pay more toward the principal, ending your debt faster.
 Debt consolidation loans can also be an effective tool for reorganizing debt payments and reducing interest costs.
Cons
If you fail to pay off your balance before the introductory period, your zero-interest card typically reverts to a regular APR of up to 29%. When this happens, you pay hefty fees on any leftover balance in your account.
Debt consolidation loans may not be worth it if you can’t secure a low enough fixed interest rate.
Cost
Debt consolidation costs vary widely depending on your chosen option, plus the terms of the credit card or loan. It’s essential to read each contract carefully to determine any fees associated with the service.
Stats
At 742, Minnesota residents have the highest average credit score in the country. This indicates that many Minnesotans will likely qualify for better interest rates on a consolidation loan.
Resources
Are debt consolidation loans a good idea? Read more information from TurboDebt’s resource library.

Debt Settlement

Minnesota residents with thousands of dollars in unsecured debt can typically reduce their debts by up to 50% using a debt settlement program.

How It Works in Minnesota
Minnesotans can contact creditors on their own or leverage the expertise of a debt settlement organization to negotiate for a reduction in their total debt. To complete a settlement, creditors agree to reduce your debt for a lump-sum payoff to end your outstanding balance. When you work with a debt settlement company, you’ll send monthly payments to the organization until you collect enough to make one payment to the creditor.
Pros
Debt settlement helps you save money by paying less to end your debt. Minnesotans often pay off debt faster using this method.
Cons
Your credit score will drop because you’ll stop paying toward your balance for the time it takes to collect enough for the lump sum payment.
Cost
Debt settlement companies typically charge between 15 and 25% of your total enrolled debt to administer your account and negotiate a settlement.
Stats
Debt settlement effectively allows North Star State residents to end large credit card balances. In Minnesota, the average credit card debt is $6,765 per resident.
Resources
Learn more about the ways debt settlement helps you overcome unsecured debts.

Bankruptcy

Bankruptcy offers one last option to clear most debts at the expense of your credit history.

How It Works in Minnesota
Bankruptcy is a process that involves restructuring and discharging your debts with the help of Minnesota’s bankruptcy court system. Most individuals in the Land of 10,000 Lakes file either Chapter 7 or Chapter 13 bankruptcy to overcome debts.
Pros
Bankruptcy is a way to clean your financial slate and start over without the burden of heavy debts. It also organizes your debt repayments while canceling others the court deems you cannot pay.
Cons
The bankruptcy process is long and involved, often requiring you to sell assets and follow a court-ordered repayment plan to satisfy your debts.
Bankruptcy also impacts your credit scores and history for up to 10 years, making it difficult to open new lines of credit or take on loans for purchases like a home or a car.
Cost
Lawyer fees can soar upwards of $5,000 depending on your attorney and the complexity of your case. You’ll also pay filing fees to the court.
Stats
In Minnesota, 6,884 residents filed for some type of bankruptcy in 2023.
Resources
Read about life after bankruptcy and how Minnesotans can rebuild financially.

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

Statute of Limitations on Debt Collections in Minnesota

Minnesota’s Statute of Limitations on Debt Collections establishes time limits to protect consumers from being sued by creditors for not paying a debt. Creditors can only pursue legal action against a debtor within the statute's time.

While this doesn’t mean debts can go unpaid or disappear after the statute expires, it does help consumers struggling to overcome tough financial situations. Here’s a look at the Minnesota’s statutes:

Type of Debt Agreement Length of Time Collectible
Written Contracts6 years
Promissory Notes6 years
Open-Ended Accounts6 years
Oral Agreements6 years
Medical Debt6 years

Student Loan Forgiveness in Minnesota

Minnesota offers student loan forgiveness through the Public Service Loan Forgiveness Program (PSLF), a federal program that assists qualifying residents who work in public service roles throughout the state.

Resources for Financial Assistance in Minnesota

Minnesota offers financial assistance for families and individuals through various state and federal programs, including the following:

Although no new Minnesota stimulus checks are being issued, residents may still qualify for tax credits to offset some costs. 

Get Professional Help Paying Off Your Debt

Even state assistance programs may not be enough to offset heavy debt burdens. That’s why seeking professional help for debt relief may be the best option to reset your finances and regain your financial freedom.

TurboDebt works with Minnesota consumers to save an average of 54% of their total debt before fees. With no upfront costs and personalized debt relief plans, we think you’ll benefit from working with us. Check out 15,000+ 5-star TurboDebt reviews from Google and Trustpilot to learn more about us from our clients.

How TurboDebt Helped Minnesota Residents With Debt Relief Last Year

Contact TurboDebt today to learn how to pay off debts faster and start your journey toward financial freedom.