More Americans are turning to debt counseling: 'Don't be afraid to ask for help'

(TNND) — One of the nation’s largest nonprofit credit counseling organizations says it is now handling more than $1 billion in debt for its clients.

That marks the most client debt Money Management International has overseen in 13 years.

MMI also has more than 60,000 active debt management plans, its highest total since 2017.

The group posted its strongest monthly enrollment in more than 15 years last month.

“It shows that there's a lot of financial strain out there,” said Ted Rossman, MMI’s principal consumer finance analyst.

Rossman said MMI was busiest during the 2007 to 2009 financial crisis.

“Those are some of the numbers that we're challenging right now,” he said.

Even with the difficult debt picture for many households, Rossman said the broader economy remains fairly solid.

He noted that the economy has been growing, the U.S. has avoided a recession for some time, and unemployment has stayed relatively low.

Still, Rossman pointed to the so-called K-shaped economy, in which some people are doing well while others are falling behind.

He said there are “divergences in the economy,” adding that MMI’s clients often have lower incomes, weaker credit scores and larger debt burdens.

The average unsecured debt among MMI clients is now above $40,000, nearly 5% higher than a year earlier.

MMI’s counseling volume increased 9.5% year over year through September.

Gen Z is also the organization’s fastest-growing client group, rising 31% from 2025.

Rossman said debt still carries stigma, but he argued that most people fall behind because of practical pressures rather than luxury spending.

“It tends to be medical debt, car repairs, home repairs, also just everyday expenses like gas and groceries outpacing your paycheck,” he said. “This is really the common theme that we hear from clients is, ‘My income used to be enough, and now it's not.’ I heard that directly from a client just a week or two ago, that she was saying, ‘I make $75,000 a year. That used to be enough. Now it's not.’ The cost of everything is up.”

Rossman said many families are feeling the combined pressure of inflation, with overall living costs up 30% over the past seven years.

“Don't be afraid to ask for help,” Rossman said.

He said monthly budget shortfalls are a warning sign for families.

MMI can help with budgeting advice as well as “the practical interest rate side” of debt, he said.

“On average, our clients come to us with 28% credit card rates,” Rossman said. “We can lower that to just under 8% on average on one of these debt management plans. And we work with you and your creditors to pay it back, usually in about four or five years.”

Not everyone needs MMI’s services, but anyone can receive “free, no commitment, no judgment initial consultations.”

Rossman said paying only the minimum on credit cards can keep people in debt for years and lead to thousands of dollars in interest.

He said people are often in the best position to handle their debt on their own if they have about $5,000 or $6,000 in credit card balances, a solid income and good enough credit to qualify for a 0% balance-transfer card.

“You can get these 0% offers that last almost two years,” he said.

If the balance is somewhat higher, a personal loan may be an option for debt consolidation, Rossman said.

“Sometimes that works if you have $10,000 in debt and you trade your 25% credit card rates for 7 (percent) on a personal loan if you have good credit, and you pay that back over four or five years,” Rossman said. “About half of our clients have personal loans. The downside is if you run the credit cards back up. And this sometimes happens. ... And that's often a time that people reach out to us.”