Minnesota Debt Relief Programs & Resources

InCharge provides free, nonprofit credit counseling and debt management programs to Minnesota residents. If you live in Minnesota and need help paying off your credit card debt, InCharge can help you

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Minnesota Credit & Debt Consolidation Information

The state of Minnesota went against the financial grain as a difficult and painful 2020 came to an end.

In December, the state announced it would generate a $641 million budget surplus by mid-2021. The surplus followed a year when shutdown and an economic downturn were direct results of the COVID-19 pandemic, and when the state lost 184,000 jobs from February to December.

Early in 2020, the state officials had estimated a $1.5 billion surplus, but then the state and the country felt the impacts of the pandemic. What it projected in December showed lost revenues of $859 million, but still left the state on the plus side. The main reason: In five of the last six months of the year the state took in more in tax money than expected, and state spending dropped by about $1.1 billion, largely because most schools operated virtually.

Projections from the Department of Minnesota Management and Budget for the two-year budget that must be approved in 2021 forecast a $1.273 billion deficit. That number could be reduced, though, by federal relief. The uncertainty of when that relief might arrive and how much the state would receive makes the state a poster child for the challenges of financial planning during a pandemic.

In the interim, lawmakers pledged to use the surplus to help those in need in Minnesota. Lawmakers had been discussing helping small- and medium-business owners, especially restaurants and bars that saw shutdowns.

“We’re laser-focused on speeding relief to Minnesota businesses and our economy as a whole,” Minnesota chamber of Commerce president Doug Loon said in a December statement.

Lawmakers though, also stressed the need to help front-line workers like medical professionals and families suffering financial hardship. The state made clear that unemployment had disproportionately affected lower-income workers.

Debt Relief Options for Minnesota Residents

For those hurt by the pandemic or those simply in need of help because of debt, InCharge Debt Solutions, a nonprofit credit counseling agency, can offer solutions.

InCharge can reduce or eliminate credit card debt with a debt management program. Certified credit counselors will work with credit card companies to reduce the interest on card charges, and help structure a monthly payment that will wipe out the debt in 3-to-5 years.

The program is run by InCharge, which takes a monthly payment and distributes money in agreed-on amounts to creditors. Individuals in financial need can apply online or over the phone.

If debt management is not the right answer, InCharge also can offer these other options to help:

  • Debt settlement – In this plan, creditors agree to accept less than what is owed. Typically a company will agree to one lump-sum payment that is less than the total debt. This solution is good for those struggling to make the minimum monthly payment, those who are behind on payments, or those forced to use credit cards to take care of stifling expense. Those interested should be aware that this option can damage the credit score for seven years.
  • Debt consolidation loans – Those with a good credit score (usually higher than 670) can use this option. Good credit allows individuals to acquire a loan with lower interest rates than the credit card charges. Don’t pretend this is free money, though. The loan must be paid off in regular installments. And the lower the credit score, the more the interest rate could increase.
  • Bankruptcy – This is a last-resort option, but one that in that last-resort scenario should be considered because it could wipe out the debt. Bankruptcy will significantly drop the credit score for 7-to-10 years, which might make getting a home or car loan in that timeframe extremely difficult.
  • Do it yourself plans – InCharge can set up a plan tailored just for your needs. A counselor savvy in debt management will help you pick the plan that best suits your situation in terms of debt and income.

Minnesota Debt Resources

The state of Minnesota offers several programs to its residents in financial need, and to those whose debt has become burdensome.

The state’s Foreclosure Prevention Assistance Program (FPAP) helps those facing a foreclosure due to temporary hardship. Help is offered through case management services. A mortgage payment or other help is available on a one-time basis to those who qualify. For information call 1-800-710-8871. Numerous HUD approved counseling agencies also offer free advice and counseling.

The Minnesota Home Ownership Center in St. Paul offers foreclosure counseling and prevention programs. Counselors will work with borrowers to keep them in their home. Help can come in the form of loan modifications, information on government assistance programs or negotiating with the lender. Help also is available to those who cannot avoid the pain of foreclosure. Grants can be used for relocation help, though those who take money in this program must agree to move within the lenders’ time frame. The maximum grant of $2,500 comes from the lenders. The “bridge money” can be used for security deposits, utility bills, first month of rent or moving expenses.

MinnesotaCare is a government program for state residents who do not have the money for health insurance. The General Assistance Medical Care provides health insurance for residents between 21 and 64 and who have no dependent children. The program is available to those who do not qualify for federal health care programs. Information is available at county offices. The General Assistance Program provides for childless couples and single couple with monthly grants for those in financial need.

The Minnesota Family Homelessness Prevention and Assistance Program provides money to non-profits to reduce or eliminate homelessness. Programs range from housing and rent assistance to free food and information on paying medical bills. The state’s free child care assistance helps find affordable child care for needy families. Smiles Across Minnesota provides preventive dental care for children, and is one of a few dental assistance programs in the state.

The Diversionary Work Program is a four-month program to help those out of work find a job. Finally, many attorneys and non-profit firms provide free legal aid to those in need.

Minnesota Debt Statistics

Minnesota is the 10th richest state in the nation, according to the national Chamber of Commerce. The Minneapolis-St. Paul metropolitan area is the 20th richest in the country.

The state prides itself on its affordability and opportunities; the per capita income of $53,384 ranks 10th in the country, and the poverty rate of 8.7% is  the second lowest among the 10 wealthiest states.

The average mortgage in the state is for $175,075, and the median sales price of a home is $235,750.  Average mortgage debt increased by just 1.8% from 2018 to 2019, the last year figures were available. In terms of credit card debt, Minnesota ranked 36th in the country in 2018, with an average debt of $6,761.

About The Author

Pat McManamon

Pat McManamon has been a journalist for more than 25 years. His experience has mainly been in sports, but the world of athletics requires knowledge of business and economics. He also can balance a checkbook and keep track of investments with Quicken quite adeptly. McManamon’s experience includes covering the NFL for ESPN, LeBron James for the Akron Beacon Journal and AOL Fanhouse, and the Florida Gators and Miami Hurricanes for the Palm Beach Post.


  1. Bakst, B. (2020, December 1) Minnesota short-term budget picture brightens; long-term deficit remains. Retrieved from https://www.mprnews.org/story/2020/12/01/budget-forecast-to-set-tone-for-covid19-relief-talks
  2. Van Berkel, J. (2020, December 2) Minnesota’s economic forecast shows $641 million surplus for current budget. Retrieved from https://www.startribune.com/state-economic-forecast-shows-641m-budget-surplus-for-20-21/573247871/
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