Gen Z is seeking debt help faster than any other generation
AgenciesMore young Americans are seeking professional help managing their debt, with Generation Z emerging as the fastest-growing group of clients at a major nonprofit credit couns...
More young Americans are turning to professional debt management assistance at a rapid rate, with Generation Z leading the trend according to Money Management International (MMI), a major nonprofit credit counseling agency. MMI reports a 31% surge in Gen Z clients seeking help from January to September 2026, with their average unsecured debt soaring to $20,200, up 10.5% from the same period in 2025.
Despite carrying less debt than other generations, Gen Z clients' balances rose 10.5% year-over-year. The figures, based on aggregated records, do not represent all Gen Z Americans but do show a significant increase in demand for debt assistance across all age groups. MMI's overall counseling volume grew by 9.5% year-over-year, with average unsecured debt rising to $40,200 from $38,300, a 4.8% increase.
The nonprofit also saw its highest monthly enrollment in debt management plans since 2011, with over 2,500 new plans started in September alone. Over 60,000 repayment plans were active at the end of September, the highest since 2017, and the organization managed more than $1 billion in client debt, its largest total since 2013. The rise in younger clients aligns with the growing cost of living and increased reliance on credit to cover expenses such as medical bills, vehicle repairs, home maintenance, groceries, and gasoline, according to Ted Rossman, MMI's principal consumer finance analyst.
Additionally, more Gen Z clients are now using unsecured personal loans, with 46% carrying at least one in Q3 2026, up from 42% in 2025 and 35% in 2020. The average personal loan balance increased by 11.5% to $19,300 over the past year. However, the trend also highlights a concerning increase in more serious repayment difficulties, with one-quarter of clients now having at least one charged-off unsecured debt, up from 20% in 2020.
The average balance held in collections rose 38% to $11,200. These findings underscore the growing reliance on credit and the potential risks associated with personal loans for younger Americans.
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