The Association for Consumer Debt Relief (ACDR) today announced the release of a new study by EY, Debt Settlement Program Outcomes, 2016–2025, the largest analysis ever conducted of the debt settlement industry (also known as “debt relief”). The study examines outcomes for approximately 8.1 million clients across 54.1 million accounts enrolled in debt settlement programs between 2016 and 2025, drawing on data from 10 participating debt settlement companies and several of the industry’s largest providers and payment processors.

The study finds that clients typically enter debt settlement programs carrying significant financial strain, with the average client enrolling approximately $24,920 in unsecured debt spread across 7 accounts, with a credit score that put them into the “poor” to “fair” range. Rather than making minimum payments to creditors, clients in these programs make deposits into a dedicated savings account they control, while a debt relief company negotiates with creditors on their behalf to resolve enrolled debts for less than the full balance owed.

Among clients with at least one settled account: the study found that clients realized average net savings of $6,370, or $2.50 in debt reduction for every $1 paid in fees.

“This is the largest and most comprehensive study ever conducted of our industry, and it confirms what we have long known: debt settlement delivers real, measurable savings for consumers who are struggling with unsecured debt,” said ACDR’s President & CEO Jason Mulvihill. “With nearly 8.1 million clients and 54.1 million accounts in the sample, this research gives policymakers and consumers an unprecedented, data-driven look at how debt settlement actually works and quantifies the value it provides to consumers.”

Among the study’s other significant findings:

  • Debt relief delivers value at scale. Through debt relief settlements, consumers have realized $29.3 billion, after fees, in reduced debt since 2016.
  • Relief does not require years of waiting or completion of an entire program. Among clients who reached at least one settlement, the first occurred after an average of about four months and the second after about eights months. Nearly every client who reached a settlement did so within the first eight months.
  • Because settlements are negotiated account-by-account, consumers can realize meaningful savings even if they settle only one account. Average net savings were positive across every client group studied, including clients who completed the program ($7,570), clients still active in the program ($1,370), and clients who exited before completion ($2,280).
  • Debt relief is a way out of the minimum payment debt trap. For example, for a consumer with $3,600 in credit card debt making minimum payments, it would take nearly 12 years and cost $5,900 to be financially free of that debt. With debt relief, the same consumer could resolve that debt in just months for a total cost of $2,590.
  • Federal rules do not allow debt relief providers to charge upfront or monthly fees. These rules ensure that consumers pay fees to the provider only when the provider delivers a settlement that the client approves and makes a payment on. Consumers who exit a program before reaching a settlement do not pay a fee.

“Too often, consumers struggling with debt do not know all of their options, or are steered toward solutions that do not fit their situation,” Mulvihill said. “This research reinforces that debt relief is a proven, effective path to financial stability for millions of Americans carrying unsecured debt. As policymakers consider consumer financial health, we encourage them to look closely at this data and support policies that preserve consumer access to legitimate, well-regulated debt relief options.”

The full study is available here.

About the Association for Consumer Debt Relief

The Association for Consumer Debt Relief (ACDR) is the national trade association representing the consumer debt relief industry. ACDR advocates for policies that expand access to responsible debt relief options, promote strong consumer protections, and help financially distressed Americans regain financial stability. Its member companies operate under the Federal Trade Commission’s Telemarketing Sales Rule, which prohibits the collection of fees before consumers achieve results, in addition to state laws, ACDR standards, and independent audits.

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