Debt consolidation in Michigan - Save money with affordable payments

Debt consolidation programs in Michigan ensure easy repayment schemes for the debtors, grumbling over multiple payments. They allow you to merge your multiple debts into a single affordable monthly payment. You may either get your debts consolidated by yourself or seek professional support from a BBB accredited debt consolidation company.

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How does Michigan debt consolidation program help to save money?

If you are a Michigan resident behind on your bills and debt repayments, choosing a debt consolidation program can lessen your worries!

Selecting the best debt consolidation programs in Michigan

Selecting the best Michigan debt consolidation programs is important for a speedy recovery from financial problems.

Here are a few tips to select the best programs in Michigan.

  • Find out if the counselors are certified and experienced in dealing with creditors.
  • Calculate and figure out if the fees are affordable.
  • Know what type of debts you can consolidate in Michigan.
  • Inquire about the success rate of the debt consolidation programs in Michigan.
  • Know how long the company is working in this industry.
  • Ask various questions to counselors and know when you can expect to be debt-free.
  • Find out if you'll get a written agreement before making payments.
  • Ask questions about the minimum and maximum amount that can be consolidated.
  • Read online reviews from various websites to get an overall idea.
  • Ask counselors what can happen if creditors don't accept their proposals.

How does Michigan debt consolidation programs affect your credit score?

They are likely to pull up your FICO score if you follow the repayment plan and repay your bills one by one. Initially, there might be a slight dip in your credit score. But, that is just a temporary phase. Gradually, as you pay off debts, your credit score starts increasing due to lower credit utilization ratio and improved payment history. Both constitute a major portion of the FICO score.

There is yet another factor that helps to improve credit. For instance, the FICO score model 9 stops penalizing consumers after they have paid off collection accounts. So, once you have included collection accounts in the consolidation program and paid them off, there will be steady progress in your credit score.

Michigan debt statute of limitations - How long is this period?

The statute of limitations period for secured and unsecured debts in Michigan is 6 years. Creditors and debt collectors can sue you for unpaid debts within this period. Thereafter, they can't sue you anymore. Even if they sue you, you can claim that the debt is time-barred.

However, there is one important point that should be kept in mind. The unpaid bill will be there on your credit report for 7 years and 180 days.

If you don't like to see the negative listing on your credit report, then you can consolidate debts in Michigan with a program or a loan. Once you pay off your debts, creditors will intimate credit bureaus to update your account status as "paid in full." This will help to make a good impact on your credit report.

What are the 3 Michigan debt consolidation laws you have to follow?

Even when you're consolidating laws in Michigan, there are a few state and federal laws you need to follow. Some of them are given below:

  1. You shouldn't pay upfront fees to the debt consolidation companies in Michigan.
  2. You should ask collection agencies to validate debt before consolidating it.
  3. You should not pay a penny without getting a written agreement.

Role of Debt Consolidation Companies in Michigan

Michigan Debt Consolidation companies accredited by the Better Business Bureau (BBB) offer many consolidation options to suit your needs. You may consolidate your debts by applying for a consolidation loan or by choosing a consolidation program. There are debt consolidation lawyers associated with these firms, who take care of the legality of the entire procedure and offer the required advice to their clients.

Once you are registered with a consolidation company, their representatives would review your financial situation, talk to your creditors, and devise a suitable repayment plan to simplify your repayments.

These companies create a long term consolidation strategy that combines and lowers the client’s monthly payment into one payment to the consolidation company.Thereafter, the company will disburse the payment among your individual creditors.

Efficient negotiation by the debt consolidation companies also help get rid of penalty charges such as over-limit costs and late-fees, that have accrued due to your defaults.

In addition, the debt consolidation companies in Michigan ensure their clients do not receive harassing collection calls, while in a consolidation plan.

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Getting a Debt Consolidation loan in Michigan

In order to get a Debt Consolidation loan, you should have a good credit rating. However, some lenders offer debt consolidation loans with a bad credit rating if you have collateral. The higher the value of your collateral, the lower your interest rate will be. Having collateral also gives you more of a choice when finding a reputable lender for ap; debt consolidation loan.

Types of consolidation loans available in Michigan

Michigan offers a wide range of loans to consolidate debt. The following are the three most popular kinds of consolidation loans available:

  • Simple Signature Loans: These are ideally available to debtors with a fairly good credit score. No collateral is required.
  • Collateral Loans: These are typically for those with a credit score too low for a signature loan. As the name suggests, this type of loan requires collateral to protect the lender in case you default.
  • Second Mortgage Loan: These types of loans are offered by mortgage lenders, who offer you another mortgage on your home in exchange for the money you need to repay your debts. If your first mortgage payments have been timely, you are eligible for a second mortgage.

How does debt consolidation loans in Michigan affect your credit score?

Debt consolidation has a direct effect on your credit score. Therefore you should be aware of the possible effects on your credit score before you embark on a consolidation loan.

A consolidation loan will affect your credit record in the following ways:

  • As you use the consolidation loan to pay off previous debts, your previous accounts are reported as paid off. And this in turn, boosts your credit score.
  • It is advisable not to close your credit card accounts soon after you have paid them off, as it hurts your credit score adversely. If you are badly tempted to close your accounts, you may close most of your accounts, but take care to keep your oldest one intact. Closing accounts can add negative impact on your credit score initially, but it eventually bounces back with time.
  • Debt consolidation causes you to take out another loan. This loan will affect your credit score accordingly. When you take it out, your score initially dips, but it rises as you keep on making your payments timely. However, it is advised not to take out any new loans, while you're on a consolidation loan, as it may lower your score.
  • A debt consolidation loan usually makes room for on-time payments by simplifying your debts. And on-time payments are excellent when it comes to giving a hike to your credit score.

Aim of Debt Consolidation Programs in Michigan

Debt consolidation programs in Michigan primarily focus on simplifying your debts through an easy and affordable repayment plan. They also have some clear cut aims that essentially help the Michigan debtors take the right step towards a debt free life:

  • Ensuring lower monthly payments: By consolidating your high-interest bills, you actually make arrangements for a monthly payment that is within your means. Since the interest rate is low, it doesn't cause a problem in making payments.
  • You have to pay less towards the interest: Consolidation programs cause you to reduce your interest rates and save money.
  • Assures a boost in your credit rating: Debt consolidation plans ensure that your debts get paid on time. And this in turn, actually improves your credit rating.

Certain things that you should avoid while on a consolidation program

  • Taking up new credit cards after enrolling in the Michigan debt consolidation programs.
  • Closing your oldest accounts
  • Using balance transfers to encourage debt negotiation
  • Spending beyond your means

Alternatives to consolidation in Michigan

If you think that consolidation programs are not for you, then you may want to consider a debt negotiation plan. Debt negotiation plans reduce the amount of money you owe by getting your creditors to agree to a settlement.

If you think your finances do not look bright for carrying out a negotiation, filing for bankruptcy may be able to give you the fresh start you are looking for!

Related information


State Attorney General Phone Number: (517) 373-1140; Toll Free: (877) 765-8388
Public Service Commission Phone Number: (517) 334-6445, (517) 241-6180

FTC Address:
East Central Region Federal Trade Commission 1111 Superior Avenue, Suite 200 Cleveland, OH 44114-2507
FTC Toll Free:
877-FTC-HELP (382-4357)
FTC Website Url:
CFPB Toll Free:
1-855-411-2372
CFPB E-mail:
info@consumerfinance.gov
whistleblower@consumerfinance.gov
CFPB Website Url:

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