A record number of Americans turned to debt consolidation during the first half of 2026, signaling a growing financial strain across the country. According to Money Management International (MMI), one of the nation’s largest debt-management nonprofits, nearly 15,000 new clients initiated debt-management plans between January and June.
This figure represents the highest year-to-date total in the organization's dataset since 2017. The nonprofit also delivered financial counseling sessions to more than 40,000 households during those months, a tally that has increased for five consecutive years and is up 143% since 2021.
By several economic measures, the nation is falling deeper into debt. Household debt nationwide now totals $18.8 trillion, the highest number on record according to the Federal Reserve Bank of New York. Meanwhile, debt-collection lawsuits have spiked in recent years, according to The Pew Charitable Trusts.
Compounding these issues, the personal saving rate stands at just 2.7%, the lowest rate since the 2022 inflation crisis. Americans are struggling with several consecutive years of rising prices, with the Consumer Price Index showing consumer prices are up by roughly 27% since the start of 2021.
Ted Rossman, principal consumer finance analyst at MMI, attributes much of this trend to the lingering impact of inflation. He noted that the post-pandemic surge in prices for almost everything is the primary factor stressing household budgets. For individuals like 59-year-old Miriam Perez of Syracuse, New York, these price hikes hit essential goods hard.
Perez recalled that a large bag of salmon at her local Costco, which cost $23.99 for years, rose to between $40.99 and $42.99 in a span of just a year or a year and a half.
Perez entered debt consolidation with MMI in late 2022 after her real estate business stalled during the COVID-19 pandemic, leaving her with more than $100,000 in debt across several credit cards. At the pandemic’s peak, she was losing $10,000 to $15,000 a month and had exhausted her savings. She described the experience as feeling like she was drowning financially, forcing her to choose between bankruptcy or debt management.
Debt consolidation allowed her to bundle her debts into a single monthly payment while counselors negotiated lower interest rates on her credit cards and loans.
While the process required a steep monthly payment of more than $2,000 and the surrender of her credit cards, Perez successfully cleared her six-figure debt in about 3 ½ years, making her final payment this year. She has since gotten her real estate business back on track and recently purchased a new car.
Runaway debt is hitting young Americans especially hard. Gen Z adults, ages 18 to 29, are the fastest-growing segment of MMI clients, with a 35% increase over the past year. When consumers fall behind on debt, the culprit is often credit cards, which carried an average interest rate of about 21% as of May.
American consumers are falling behind on their credit cards at levels not seen since the Great Recession era. Roughly 13% of the nation’s card balance was at least 90 days delinquent in the first quarter of 2026, a figure that has not been this high since 2011.
Many Americans attempt to consolidate credit card debt on their own using personal loans, which are installment loans with fixed interest rates that can start around 7%. However, MMI reports that this approach often fails, as nearly half of new MMI clients already hold personal loans with an average balance of nearly $19,000. Rossman noted that many of these do-it-yourselfers end up needing additional help because they run their credit cards back up while just moving money around.
For those with relatively good credit and no more than $5,000 or $6,000 in debt, Rossman suggests zero-APR credit cards as a powerful tool. For those with weaker credit or higher balances, he recommends seeking professional credit counseling through the National Foundation for Credit Counseling, which serves as a clearinghouse of trusted agencies.
