Credit debt counseling hits 13-year high as living costs bite

Americans are borrowing more, paying less off, and increasingly showing up at the door of nonprofit credit counselors for help.

Money Management International (MMI), a Stafford, Texas-based nonprofit credit counseling agency, says that it is now managing more than $1 billion in client debt through September 2026 - the highest volume since 2013.

Enrollment in its debt management plans surpassed 2,500 new plans in September alone, the most in a single month since March 2011, while total active repayment plans exceeded 60,000 - a level not seen since 2017.

The data, drawn from aggregated MMI client records for the first nine months of 2026, does not reflect the broader population but signals where financial stress is accumulating and, crucially, who is feeling it most.

"The story behind the numbers is all about the rising cost of living," said Ted Rossman, Principal Consumer Finance Analyst at MMI. "On average, the price of everything we buy has risen 30% since the pandemic. All too often, wage growth hasn't kept pace. As a result, millions of Americans are relying on credit to make ends meet."

Read next: Credit card users are showing increased financial stress

What the numbers mean for advisors

Average unsecured debt among MMI clients reached $40,200 year-to-date through September 2026, a 4.8 percent increase from $38,300 over the same period in 2025. Counseling volume rose 9.5 percent year-over-year.

Delinquency is also worsening. According to MMI's data, 25 percent of clients carried at least one charged-off unsecured debt in 2026, up from 20 percent in 2020. The average collection balance climbed 38 percent over that same six-year period, to $11,200.

For advisors working with middle-income clients, those figures track with a broader pattern that InvestmentNews has been following: younger clients carrying unsecured debt are reshaping advisor practice management conversations, particularly as buy-now-pay-later credit and personal loans become a standard part of household cash flow.

Personal loan exposure among MMI's new clients climbed to 46 percent in 2026, up from 42 percent in 2025 and 13 points above the 35 percent recorded in 2020. The average personal loan balance among those clients rose 11.5 percent year-over-year to $19,300.

"Many clients have used personal loans for debt consolidation, but paying off debt with more debt is risky," Rossman said. "You can end up with more debt than before if you accumulate new credit card debt before the old debt, now in the form of a personal loan, is paid off."

Gen Z is the fastest-growing client group

The generational shift in MMI's data carries particular weight for wealth management professionals trying to build relationships with younger clients.

Gen Z now represents the agency's fastest-growing client segment, up 31 percent year-over-year. Their average unsecured debt of $20,200 is the lowest of any generation in MMI's client base, but it is rising - up 10.5 percent from 2025.

Those clients are also finding their way to credit counselors through a new channel. The share of MMI clients who arrived via AI-generated search - primarily ChatGPT - rose 48.8 percent year-over-year. As InvestmentNews has reported, the growing use of AI tools for personal financial guidance is prompting advisors to consider how they position themselves relative to automated alternatives.

Geography and opportunity

State-level data from MMI points to pockets of accelerating stress.

Among the ten highest-volume states, client growth through September 2026 was fastest in Pennsylvania, up 24 percent; Georgia, up 17 percent; and Texas, up 15 percent. Average unsecured debt in Virginia reached approximately $45,900, a 15 percent year-over-year increase, while North Carolina averaged $41,600, up 10 percent.

Americans are becoming more reliant on credit and the advisors best positioned to capture the next generation of clients may be those willing to engage with debt, not just wealth.