Debt Counseling Finds More New US Clients as Nationwide Financial Distress Increases
Debt distress of new clients of 21-30 age group increases 48 percent
A nonprofit financial counseling and education organization has found that financial counseling in the U.S. dramatically increased in 2024 over the previous year.
Money Management International (MMI) said the surge reflects growing financial hardships nationwide, with record-high unsecured debt, surging delinquency rates, and soaring living costs placing unprecedented pressure on households —especially younger generations, a Global Newswire press release said.
Young adults of the 21-30 age group experienced the most significant growth in debt distress at 48 percent year-over-year (YoY). They carry lower unsecured debt but their debt is increasing at a faster rate than MMI’s overall client base. This demographic saw a 12 percent rise in average unsecured debt, from $16,318 in 2023 to $18,254 in 2024, the report said.
Meanwhile, the overall debt across all age groups rose by 8 percent, reaching $29,364 in 2024.
Housing expenses increased by 11 percent yearly, with homeowners suffering a 12 percent surge ($1,900/month) and renters seeing a 9 percent jump ($1,300/month).
New York among states of high debt distress
States of New York, Maryland, Massachusetts, and Tennessee witnessed above-average increases in new clients and unsecured debt levels.
The highest unsecured debt loads averaging over $37,000 were held by clients from Hawaii.
Growth among new clients of the 21-30 age group was the highest at 48 percent, while the 51-60 age group showed a 43 percent rise in new clients. New borrowers of the 41-50 and 61-70 age group showed a 34 percent year-over-year increase. The new clients increased the least in the 31-40 age group at 30 percent and in the above-71 age group at 16 percent, the report says.
In the unsecured debt segment, the 21-30 age group showed the highest growth of 12 percent year over year while the 31-40 age group saw the next highest growth of 11 percent. Next highest growth in unsecured debt was exhibited by the 41-50 and 51-60 age groups at 7 percent each while the 61-70 and 71 plus age groups experienced the lowest growth rate in unsecured debt at 6 percent and 3 percent respectively.
The average new debt was the highest among the 41-50 age group at $32,155 followed by the next age band of 51-60 at $31,149. The 61-70 age group and the 31-40 age group respectively were bearing $26,860 and $26,383 average new debt. The lowest average new debts of $25,305 and $16,318 were held by the 71 plus and 21-30 age group respectively.
The average unsecured debt level was the highest in 2024 among the 41-50 age group of $34,472 while the next highest average debt level of $33,475 was held by the 51-60 age group. The age groups of 31-40 and 61-70 held the next highest average unsecured debt of $29,392 and $28,502. The 71 plus age group held $25,305 unsecured debt and the youngest 21-30 age group held average unsecured debt of $18,254.
