Debt Settlement Gains Awareness and Approval
Debt.com's research shows debt settlement is becoming a popular solution in today's economy.
FORT LAUDERDALE, Fla., Jan. 27, 2025 /PRNewswire/ -- Debt settlement is now gaining traction as a favored option for debt relief, according to a Debt.com survey.
The survey of 1,144 Americans found that 89% of respondents are aware of debt settlement, with 58% considering it an effective solution—outpacing the 49% who believe bankruptcy is helpful.
"Thanks to new regulations and industry standards, reputable companies have transformed debt settlement into a sought-after solution," says Howard Dvorkin, CPA and Chairman of Debt.com. "It's now both powerful and reputable."
The survey findings reveal a shift in attitudes toward debt settlement. Thirty percent of respondents used debt settlement to resolve debts, compared to 44% who filed bankruptcy leaving 20% who opted for a debt management program. This research highlights that many consumers prefer debt settlement because it allows them to negotiate with creditors to pay back a portion of what they owe, often without an attorney or legal filing.
"These critical findings emphasize that debt resolution is becoming a go-to option for consumers overwhelmed by debt," says Denise Dunckel Morse, CEO of the American Association for Debt Resolution. "As many continue to struggle under the weight of inflation and other pervasive economic factors, our industry has continued to prioritize their well-being, with strong, transparent standards for providers."
Key findings:
- 49% of all respondents know debt settlement can cut their debt by 30-50% including 52% of Millennials and 50% of Gen Z
- 79% think Bankruptcy will do more damage to their credit than debt settlement
- 44% know credit scores don't impact the ability to pursue debt settlement
"Consumers are looking for relief that doesn't involve the complexity and long-term impact of bankruptcy," said Don Silvestri, President of Debt.com. "In regions like the Mid-Atlantic, where high home prices stretch budgets, debt settlement is becoming a go-to option."
Silvestri noted that the Mid-Atlantic states, which have some of the highest living costs in the nation, account for the majority of debt settlement inquiries. "When expenses are high, more people turn to options like debt settlement to keep their financial situation manageable," he said.
Silvestri added that Debt.com has seen a surge in consumer interest in debt settlement over the past decade. "When we started 11 years ago, we had to explain what debt settlement was and why it might be a good fit," he said. "Now, people are coming to us already informed and asking for help."
Morse of the American Association for Debt Resolution says, "Consumers nationwide should have access to the tools that are right for their unique financial position which are proven to be effective solutions."
The expectation is that the popularity of debt settlement will keep growing as more Americans look for alternatives to handle rising personal debt. Debt.com's Debt Settlement White Paper, released this month, further explores the trends and evolving attitudes toward debt settlement as a practical solution in the current economic environment.
About Debt.com
Debt.com is a leading provider of financial education and debt relief solutions, helping Americans find the path to financial stability. Through expert guidance, educational resources, and personalized counseling, Debt.com empowers people to tackle debt challenges and build a brighter future.
SOURCE Debt.com
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