Financial Services Innovation Coalition report highlights growing financial strain on American households and the role that debt relief can play for consumers facing high-interest, unsecured debt

SAN MATEO, Calif., Aug. 3, 2026 /PRNewswire/ — Freedom Debt Relief, one of the largest and longest-running providers of debt settlement services in the U.S., supports findings from a new report released by the Financial Services Innovation Coalition that highlight the growing financial pressures facing American households and the important role debt relief can play for consumers struggling with overwhelming unsecured debt.

The FSIC report, The Consumer Financial Health Crisis: Wage Stagnation, Rising Costs, and the American Household Debt Trap, examines the economic forces driving financial stress across the country. It finds that many consumers are increasingly relying on debt to cover essential expenses as wages struggle to keep pace with the cost of living. The report also identifies debt relief as an important pathway for consumers whose unsecured debt has become unsustainable.

Other key findings from the report include:

• The financial challenges facing many Americans stem from broader economic trends rather than isolated consumer behavior
• Rising costs and growing debt burdens are leaving more households vulnerable to long-term financial distress
• Many consumers are relying on credit to bridge gaps between income and essential expenses
• When unsecured debt becomes unmanageable, consumers often face a limited set of options for addressing their debt
• Debt relief serves an important role in helping financially distressed consumers regain financial stability

“The most important finding in this report is that many Americans are not struggling because they made reckless financial decisions. They’re struggling because the cost of everyday life has risen faster than their ability to pay for it,” said Freedom Debt Relief President Sean Fox. “For years, consumers have been using credit cards, buy now, pay later and other forms of short-term debt to cover gaps in their budgets, hoping higher prices were temporary or that they could catch up later. For many, that moment never came. The result is a growing number of hardworking people carrying debt they have no realistic way to repay.”

The report also notes that consumers with significant unsecured debt often face a limited set of options once debt balances become unmanageable and identifies regulated debt relief programs as an important alternative for consumers seeking to avoid bankruptcy while resolving unaffordable debt.

Freedom Debt Relief believes these findings reinforce the importance of ensuring consumers understand the full range of options available to help them manage their debt and that they have access to trusted, regulated programs that can help them recover financially.

“Debt relief exists because there are times when repayment alone is no longer a realistic answer,” Fox said. “When someone owes far more than they can afford to repay, continuing to make minimum payments can keep them trapped for years or even decades. This research reinforces why consumers need access to proven, regulated debt settlement programs that can help them resolve debt and regain financial stability.”

The FSIC report reinforces an important reality: there is no one-size-fits-all approach to debt. Consumers facing financial hardship have different needs, resources and goals, making it critical that they understand the full range of available options. For many consumers struggling with unaffordable unsecured debt, debt settlement can provide a path to financial recovery, while others may be better served by alternatives such as debt consolidation.

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