Borrowers are cutting back but still struggling to escape debt, Freedom Debt Relief and Money.com study finds

Nearly half can make only minimum payments or are behind, while 79% would accept a credit-score decline to become debt free faster

SAN MATEO, Calif., Oct. 1, 2026 /PRNewswire/ -- Americans carrying substantial unsecured debt are cutting everyday expenses, drawing from retirement savings and trying multiple repayment strategies, yet many still cannot make meaningful progress, according to a new study from Freedom Debt Relief and Money.com.

The study, "Deep in debt, borrowers are cutting back but still struggling," is available on FreedomDebtRelief.com and as a PDF download.

Freedom Debt Relief, one of the largest and longest-running providers of debt settlement services in the U.S., together with Money.com surveyed 1,800 adults with at least $10,000 in unsecured debt, excluding student loans. The study found that 28% can afford to make only the minimum-required payments, while 21% are behind on at least one account.

The findings challenge the assumption that people remain in debt because they are unwilling to change their habits. Borrowers reported cutting dining, shopping and travel while pursuing a range of repayment strategies. Nearly one-third have withdrawn from retirement savings to pay down debt in the past 12 months, while 24% have borrowed against home equity to consolidate debt.

"There's a tendency to assume that people get into, and stay in, debt because they aren't willing to change their habits," said Freedom Debt Relief President Sean Fox. "This research paints a much more complicated picture. Many people are already making difficult tradeoffs and actively looking for a way to improve their financial situation. Yet they're still struggling because they don't know where to start or which strategies are best for their specific situation."

Borrowers make sacrifices, but still need a path forward

The study found that borrowers are highly motivated to reduce debt. Their goals extend beyond paying down balances or lowering interest: They want to regain control, reduce stress and create greater financial stability.

Key findings include:

• Many borrowers are struggling to get ahead: 28% can make only the minimum-required payments, while 21% are behind on at least one account.
• Debt reduction is both a financial and emotional priority: 48% want to regain control and feel financially stable, while 48% want to reduce money-related stress and anxiety.
• Cutbacks are part of borrowers' daily routines: 41% have stopped dining out or ordering delivery and 40% have stopped nonessential online shopping.
• Borrowers want immediate breathing room: 60% prioritize reducing stress, 57% reducing monthly payments and 56% improving cash flow.
• Speed can outweigh protecting credit: 79% would accept a credit-score decline to become debt-free faster, including 37% who would accept a drop of 100 points or more.
• Extra cash would go toward financial security: About 41% would prioritize faster debt repayment, while only 5% would prioritize discretionary spending.

Borrowers also see negotiation as a viable path but may struggle to follow through. While 69% consider negotiating directly with a credit card issuer safe, 14% started contacting creditors directly but did not complete the process. Only about half feel somewhat or very confident speaking with creditors.

That gap highlights how professional debt settlement may provide structure and experienced support for eligible consumers who do not feel equipped to navigate creditor negotiations on their own. Overall, 52% consider debt settlement safe, with past-due borrowers more likely to view it as a safe option.

Freedom Debt Relief launches consumer research initiative

The report is the first study from Freedom Debt Relief Insights, a new research initiative that will draw on original surveys, proprietary data and more than 20 years of experience helping consumers in financial hardship. The initiative will publish research and commentary on the experiences, behaviors and financial challenges of consumers carrying significant unsecured debt.

Freedom Debt Relief Insights aims to provide consumers with clear, practical information while contributing to a deeper understanding of financial hardship among financial services professionals, consumer advocates, researchers, policymakers and other stakeholders.

The full study is available online and as a PDF download.

About Money.com 

Money has a 50-plus-year legacy of guiding people to financial victories with up-to-date information, education, and tools. Money, a digital destination, helps create richer lives for everyone—in every sense of the word. Signature franchises include a bevy of Best-In categories such as Best Places to Live,Best Crypto Exchanges, Best Mortgage Lenders, Best Life Insurance,Best Auto Insurance, Best VA Loans, Best Homeowner Insurance, Best High-Yield Savings Accounts, Best Credit Cards, Best Colleges, Best Student Loans, and Best Student Loan Refinance Companies, with an aim to improve your finances and promote your well-being. For more information, visit Money.com.

About Freedom Debt Relief

Freedom Debt Relief is one of the largest and longest-running providers of debt settlement services in the United States. We help consumers take control of their finances by giving them a proven plan to relieve their debt burden — and in the process, help them make better financial decisions in the future. Working on behalf of its consumer clients, Freedom Debt Relief negotiates with creditors to reduce the amount of debt they owe. Freedom Debt Relief is an accredited debt settlement company based in San Mateo, Calif., and has served more than 2 million consumers, helping to resolve over $22 billion in debt since 2002.

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SOURCE Freedom Debt Relief