Taking Responsibility for Debt While Avoiding Bankruptcy
UpdatedJun 5, 2025
- 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."
A look into the world of debt relief seekers
We looked at a sample of data from Freedom Debt Relief of people seeking the best debt relief company for them during April 2025. This data highlights the wide range of individuals turning to debt relief.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In April 2025, people seeking debt relief had an average of 74% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Personal loan balances – average debt by selected states
Personal loans are one type of installment loans. Generally you borrow at a fixed rate with a fixed monthly payment.
In April 2025, 44% of the debt relief seekers had a personal loan. The average personal loan was $10,718, and the average monthly payment was $362.
Here's a quick look at the top five states by average personal loan balance.
| State | % with personal loan | Avg personal loan balance | Average personal loan original amount | Avg personal loan monthly payment |
|---|---|---|---|---|
| Massachusetts | 42% | $14,653 | $21,431 | $474 |
| Connecticut | 44% | $13,546 | $21,163 | $475 |
| New York | 37% | $13,499 | $20,464 | $447 |
| New Hampshire | 49% | $13,206 | $18,625 | $410 |
| Minnesota | 44% | $12,944 | $18,836 | $470 |
Personal loans are an important financial tool. You can use them for debt consolidation. You can also use them to make large purchases, do home improvements, or for other purposes.
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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Author Information
Written by
Aimee Bennett
Aimee Bennett is a communications consultant for Freedom Debt Relief. She’s passionate about marrying business with communications, making often-complex personal finance topics easy to understand through clear, concise and accurate language. When she’s not at her desk working with words and grammar, you’ll find her on her bike, in the pool, on a ballroom dance floor or teaching English as a Second Language.