Consumer financial strain is deepening, and the nonprofit credit counseling sector is responding in ways that could reshape the environment for collectors and debt buyers.
Money Management International, a Texas-based nonprofit, counseled nearly 41,000 clients in the first half of 2026, roughly 10% more than a year earlier, according to a New York Times report. Enrollment in its debt management plans reached its highest level in nearly a decade. GreenPath Financial Wellness reported a 20% jump in people seeking help over the same period.
The drivers are not discretionary spending but everyday costs. Groceries, car repairs and medical bills are outpacing budgets, MMI principal analyst Ted Rossman told the Times. GreenPath Chief Executive Kristen Holt said clients increasingly use credit cards “to balance the budget,” with income failing to cover basics.
The demographics matter for placement forecasting. Borrowers in their 30s to mid-40s make up the largest share, carrying roughly $41,000 in average unsecured debt. But adults in their late teens and 20s are the fastest-growing segment, with average unsecured balances near $20,000, up 12% from 2025. About 40% of those younger clients also juggle student loans averaging $35,000.
The most consequential development for the servicing and collection industry is the migration of nonprofit counselors into settlement-style services. MMI last year launched what it calls “debt resolution,” which functions much like traditional debt settlement: clients pay MMI, which negotiates a reduced payoff with creditors. The group limits the offering to accounts that are already charged off or imminently headed there. Rossman said MMI does not recommend settlement to anyone not already in or near collection status, and does not pressure clients to default to force a settlement.
The economics differ from the for-profit model. MMI charges flat fees, a maximum of $100 to start and no more than $69 monthly, rather than a percentage of enrolled debt. The National Foundation for Credit Counseling confirmed several member nonprofits are weighing settlement options as delinquencies advance. Spokesman Bruce McClary said more flexibility is needed to address advanced delinquencies.
