Turbo Takeaways
- Virginia residents carry an average consumer debt of $128,386, ranking among the highest in the country.
- Debt relief programs like settlement, consolidation, and management plans can help reduce debt and simplify payments.
- With the right program, Old Dominion residents can rebuild credit and move toward long-term financial confidence.
Your Options To Get Out of Debt in Virginia
From historic Williamsburg to the busy capital of Richmond, Virginia residents enjoy a vibrant and cultured state. While Virginia may be for lovers, there’s nothing to love about being in debt. Many Virginians find themselves struggling to pay bills and save money when faced with soaring prices for goods and services.
Virginia residents carry some of the highest consumer debt levels in the nation. With such a high debt threshold, many Virginians need solutions to resolve large balances on credit cards, medical debts, and personal loans. Keep reading to learn more about debt relief options in Virginia.
Credit Counseling
Enrolling in a credit counseling program is an effective way to get unbiased financial advice from a trusted source.
How It Works
Virginians who enroll in this type of debt relief program get connected with a certified credit counselor through a private or nonprofit agency. With little out-of-pocket costs and solid advice about your credit history and budgeting strategies, credit counseling can help you start rebuilding your financial situation.
Pros
- Helps improve money management and budgeting skills
- Offers personalized guidance from certified financial counselors
- May qualify you for lower interest rates or fee waivers
Cons
- Doesn’t directly pay off existing debts
- Requires long-term commitment to counseling sessions and financial education
- Results depend on your willingness to follow the advice consistently
Cost
Consumers facing financial hardship with income below a certain level can often access low or no-cost services from nonprofit credit counseling organizations. Others can access credit counseling at very reasonable monthly fees.
Stats
- In the past decade, an overwhelming majority of consumers have chosen to pursue debt settlement options instead of credit counseling to resolve debts.
Resources
The Financial Counseling Association of America offers a searchable database to help consumers in Virginia find qualified credit counselors nearby.
Debt Management
Debt management programs (DMPs) offer Virginia consumers an organized plan for paying off debt.
How It Works
Virginia residents create a debt management plan after enrolling in a DMP through a nonprofit credit counseling agency or a private organization. With this method, you make just one monthly payment to the DMP, and your funds are distributed to each of your lenders on your behalf.
Pros
- Combines multiple debts into a single organized payment
- Helps avoid late fees and missed payments
- Builds positive payment history over time
Cons
- Often requires closing existing credit accounts
- Includes monthly administrative fees per enrolled account
- Can take several years to complete repayment in full
Cost
Nonprofit agencies typically charge a startup fee of about $35-40 and a monthly fee between $25 and $35 for each account you enroll in a debt management plan for administering your payments.
Stats
- With a median income of $90,974, many Virginia residents can dedicate part of their incomes to paying off debts through a DMP.
Resources
Read more about debt management programs and how they work.
Debt Consolidation
Consolidating debt in Virginia is like a DIY version of debt relief, allowing you to decide the best way to reduce interest and pay off your debts efficiently.
How It Works
Virginians have two basic ways to consolidate debt. The first method is to secure a loan from a traditional bank, online organization, or credit union. The second option works best for Virginia residents with lots of credit card debt and involves opening a zero-interest balance transfer card.
Pros
- Debt consolidation loans allow you to “reorganize” debt into a single monthly payment
- For small to moderate credit card debts, a balance transfer card helps you catch up on payments
- May reduce total interest costs and speed repayment
Cons
- Requires good credit scores to secure favorable loan terms
- Balance transfer cards revert to high-interest rates after promo period ends
- Risk of higher costs if payments are missed or delayed
Cost
Your costs for a consolidation loan depend on how much you owe in total debt plus any monthly interest due based on your consolidation loan’s interest rate.
With zero-interest credit cards, you may pay an initial balance transfer fee (usually 3%-5%) plus the principal due on your monthly payment allocated toward reducing your balance.
Stats
- Virginians carry an average credit score of 712. This strong score will likely qualify residents for better interest rates when securing a consolidation loan.
Resources
Read more to determine if a debt consolidation loan is the right choice for your financial situation.
Debt Settlement
Settling debt is an opportunity to reduce your total debt by negotiating a one-time lump-sum payment to your creditors in return for them waiving or forgiving the entire remaining balance.
How It Works
Virginia residents can negotiate with creditors on their own or work with a debt settlement company to lower their total debt amount.
Pros
- Can reduce total unsecured debt by about 50% before fees
- Ends collection calls once settlements are finalized
- Helps avoid bankruptcy while resolving overdue accounts
Cons
- Temporarily lowers credit scores during the process
- Requires saving for lump-sum payments before settling
- Settlement outcomes vary depending on creditor cooperation
Cost
Debt settlement companies charge fees that range from 15% to 25% of your total enrolled debt. However, companies can’t charge fees until your debt settlement offer is accepted by both you and your lender(s).
Stats
- Virginia saw 33,999 enrolled debt settlements in 2023.
Resources
Learn more about the debt settlement process and how it can reduce your total debt.
Bankruptcy
Virginians who exhaust all other debt relief options can try bankruptcy as a last resort to eliminate and pay off debts.
How It Works
Virginia’s bankruptcy courts are divided into an Eastern division and a Western division. Residents file a petition for relief under Chapter 7 or Chapter 13 through the bankruptcy court within their residential jurisdiction.
Pros
- Eliminates most unsecured debts and offers a financial reset
- Stops collection efforts and wage garnishments
- Provides structured court-supervised debt resolution
Cons
- Impacts credit history for up to 10 years after case is discharged
- May require selling assets to satisfy outstanding balances
- Involves attorney and court filing fees that add to costs
Cost
Attorney fees can range from $750 to nearly $5,000, while filing fees typically cost about $300.
Stats
A total of 14,245 Virginia residents filed for some type of bankruptcy (PDF) in 2024.
Resources
Read a guide about whether Chapter 7 or Chapter 13 bankruptcy is the best option for you.
What You Need To Know About Debt in Virginia
Statute of Limitations on Debt Collections in Virginia
Virginia’s Statute of Limitations protects consumers from creditors who wish to pursue legal action for an unpaid debt. While this doesn’t absolve consumers from paying a debt, it does mean that creditors can’t sue them after a certain time period has passed.
The state of Virginia sets different timeframes for various types of debt. Read below for the Statute of Limitations for the primary types of debt:
| Type of Debt Agreement | Length of Time Collectible |
|---|---|
| Written Contracts | 5 years |
| Promissory Notes | 6 years |
| Open-Ended Agreements | 3 years |
| Oral Agreements | 3 years |
Statute of Limitations on Medical Debt in Virginia
In Virginia, the Statute of Limitations on medical debt lasts five years. This means that creditors can’t pursue legal action against a consumer for unpaid medical bills after five years have passed.
Student Loan Forgiveness in Virginia
While the state of Virginia doesn’t offer any specific student loan forgiveness programs, it does offer various financial aid programs.
Resources for Financial Assistance in Virginia
Virginia residents facing hardship can apply for support programs and resources offered through the state. Here are the key programs for Virginians needing financial assistance:
- TANF: Virginia administers the federal program that provides cash assistance to qualifying residents.
- SNAP: The state offers food assistance through the federal Supplemental Nutrition Assistance Program.
- SUN Bucks: This new program supports qualifying Virginia families in purchasing fresh fruits and vegetables, whole grains, dairy products, and meat.
- Medical Assistance: Virginia offers several medical assistance programs to help residents facing financial hardship cover medical costs.
Although Virginia stimulus checks are no longer being issued, the state provides other opportunities for those needing help. And if you're still waiting on your Virginia state income tax refund, there are a few ways to check the status and get updates on its progress.
Did You Know?
Virginians can access financial resources within their local area by dialing 2-1-1, texting ‘Connect’ to 247211, or visiting 211virginia.org.
Brad Reichert, founder and managing director of Reichert Asset Management LLC, offers another resource for Virginians in need of financial assistance. “2-1-1 Virginia is the Commonwealth’s all-in-one 24-hour information and referral service that provides access to free and confidential emergency counseling, disaster assistance, food, health care, insurance assistance, stable housing and utility payment assistance, employment services, Veteran services, and childcare and family services,” Reichert says.
Get Professional Help Paying Off Your Debt
For many Virginians, a debt relief program is the path toward financial freedom. TurboDebt® offers services to help consumers escape the debt cycle and reset their finances, providing guidance and unparalleled customer service throughout the process.
Here’s why we believe Virginia residents benefit from working with TurboDebt:
- No upfront fees to get started
- Customized debt relief plans
- Faster debt repayment through our program
- Excellent customer service evidenced by over 20,000 five-star TurboDebt reviews
It only takes a few minutes to get started with a free consultation. Contact TurboDebt today to find out if you qualify for debt relief services in Virginia that give you a fresh financial start.