News about household debt

Nonprofit credit counselor Money Management International (MMI) said it managed more than $1 billion in client debt through September, its highest level since 2013. September also saw more than 2,500 new debt-management plans, the most since March 2011, and over 60,000 active plans. The Federal Reserve's 2025 Survey of Consumer Finances found 19.6% of borrowing families fell behind on payments in the prior year, up from 12.2% in 2022. Clients referred by generative-AI search, mainly ChatGPT, rose 48.8% year over year, and 60% of them held at least one unsecured personal loan at initial counseling. The article warns that debt consolidation can backfire if borrowers rebuild credit-card balances before repaying the consolidation loan.