Taking Responsibility for Debt While Avoiding Bankruptcy
- UpdatedAug 22, 2024
- Melissa N. relays how her spending habits resulted in debt she couldn’t get out of
- Efforts to remedy her situation on her own – including a home equity loan and balance transfers – did not work
- Melissa explains why FDR’s debt resolution program was a better option than bankruptcy for her
Melissa N. was a homeowner and a mother with what she calls a "great job" that paid very well. The now-retired Fayetteville, North Carolina, resident explains that she got into bad spending habits with an "I want it now" mentality, as opposed to a "Do I need it now?" one. For many years, she found herself turning to credit cards to purchase items she wanted, without considering the consequences. "It wasn't something that happened overnight," she says of her mounting debt. "It was progressive."
She tried to remedy the situation on her own, by making bigger monthly payments, taking out a home equity loan and doing balance transfers. "I thought, being an educated woman with a bachelor's degree in engineering, that…I should be able to get out of this." But none of the steps she took changed her spending habits.
When she made the first call to Freedom Debt Relief, she talked with a representative who was "someone like me," says Melissa. "I felt stupid because of the situation I had gotten myself into."
However, the Freedom Debt Relief representative, "made me feel very comfortable," Melissa says.
The representative explained the program to her in detail, Melissa explains. "I felt very…confident that the program was what I needed." In looking at alternatives, Melissa says she was "embarrassed" to go through bankruptcy, and "did not want to have a bad credit rating haunting me for years." She also felt responsible for her debt, and wanted an option that helped her repay her creditors.
"You feel like you're drowning," says Melissa of her spiraling debt. "FDR was that life jacket."
"It was the best decision I ever made," she adds. "My only regret is…I didn't do it sooner."
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during July 2024. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Debt relief seekers: A quick look at credit cards and FICO scores
Credit card usage varies significantly across different age groups, reflecting diverse financial needs and habits.
In July 2024, the average FICO score for people seeking debt relief programs was 579.
Here's a snapshot by age group among debt relief seekers:
| Age group | Average FICO 9 credit score | Average Credit Utilization |
|---|---|---|
| 18-25 | 567 | 83% |
| 26-35 | 575 | 80% |
| 35-50 | 576 | 78% |
| 51-65 | 579 | 76% |
| Over 65 | 592 | 71% |
| All | 579 | 77% |
Use this data to evaluate your own credit habits, set financial goals, and ensure a balanced approach to managing credit throughout your life.
Collection accounts balances – average debt by selected states.
Collection debt is one example of consumers struggling to pay their bills. According to 2023, data from the Urban Institute, 26% of people had a debt in collection.
In July 2024, 28% of debt relief seekers had a collection balance. The average amount of open collection account debt was $3,198.
Here is a quick look at the top five states by average collection debt balance.
| State | % with collection balance | Avg. collection balance |
|---|---|---|
| Washington DC | 21 | $6,090 |
| Arkansas | 23 | $4,654 |
| Nevada | 31 | $4,563 |
| Kansas | 30 | $4,553 |
| Maine | 28 | $4,280 |
The statistics are based on all debt relief seekers with a collection account balance over $0.
If you’re facing similar challenges, remember you’re not alone. Seeking help is a good first step to managing your debt.
Regain Financial Freedom
Seeking debt relief can be the first step toward financial freedom. Are you struggling with debt? Explore options for debt relief to regain control of your finances. It doesn't matter how old you are or what your FICO score or credit utilization is. Take the first step towards a brighter financial future today.
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