Taking Responsibility for Debt While Avoiding Bankruptcy
- UpdatedSep 19, 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 August 2024. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit card balances by age group for those seeking debt relief
How do credit card balances vary across different age groups? In August 2024, people seeking debt relief showed the following trends in their open credit card tradelines and average credit card balances:
Ages 18-25: Average balance of $9,300 with a monthly payment of $265
Ages 26-35: Average balance of $12,920 with a monthly payment of $356
Ages 36-50: Average balance of $16,196 with a monthly payment of $453
Ages 51-65: Average balance of $16,345 with a monthly payment of $475
Ages 65+: Average balance of $16,757 with a monthly payment of $446
These figures show that credit card debt can affect anyone, regardless of age. Managing credit card debt can be challenging, whether you're just starting out or nearing retirement.
Home-secured debt – average debt by selected states
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.
In August 2024, 27% of the debt relief seekers had a mortgage. The average mortgage debt was $236,240, and the average monthly payment was $1,890.
Here is a quick look at the top five states by average mortgage balance.
| State | % with a mortgage balance | Average mortgage balance | Average monthly payment | |
|---|---|---|---|---|
| California | 21 | $391,801 | $2,725 | |
| Washington DC | 18 | $336,914 | $2,290 | |
| Utah | 35 | $324,405 | $2,184 | |
| Nevada | 26 | $307,368 | $2,063 | |
| Massachusetts | 29 | $303,507 | $2,366 |
The statistics are based on all debt relief seekers with a mortgage loan balance over $0.
Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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